#284: What the End of De Minimis Means for Toy Creators
For years, international toy sellers had a semi-secret shortcut to ship goods under $800 tariff free. That shortcut? Gone. And if you’re not prepared, your business could feel it fast. As of August 29th, the De Minimis Exemption was officially eliminated for many international shipments to the U.S. The change, quietly confirmed by U.S. Customs and Border Protection, caused immediate disruption. Over 25 countries (including the UK, Germany, and Japan) paused shipments to reassess compliance. Platforms like Temu and Wish began overhauling logistics, while DTC creators abroad faced surprise duties, delays, and frustrated customers.
In this episode of Making It in the Toy Industry, I’m breaking down what the end of the De Minimis Exemption actually means for creators like you. This change isn’t just about shipping fees and forms, it’s about who wins, who loses, and how you can thrive in a newly leveled playing field.
Using a mind map, I’ll guide you through the four big areas impacted by this shift: the immediate chaos it’s caused, what strategies and tools are suddenly more valuable, what old tricks are now holding brands back, and who’s rising to the top as this new landscape takes shape.
This episode is a wake-up call and a strategic roadmap, all in one.
Listen For These Important Moments
[00:09:12] - Avoid tariffs and delays. Warehousing in the U.S. now gives you speed, savings, and a serious competitive edge.
[00:11:53] - New customs rules are hitting Temu and Shein hard, giving legit brands room to shine and reclaim their sales.
[00:21:00] - Stable SKUs and digital add-ons help offset costs and keep products flowing under new import rules.
[00:25:50] - Solo sellers outside the U.S. now face bigger delays and thinner margins. Without a warehouse, you’re stuck.
[00:29:54] - U.S.-based creators, brands with warehousing, and fulfillment partners are leading the pack.
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This episode is brought to you by www.thetoycoach.com
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[00:00:00] Azhelle Wade: You are listening to Making It in The Toy Industry, episode number 284.
[00:00:10] Azhelle Wade: Welcome to Making It in The Toy Industry, a podcast for inventors, entrepreneurs, and makers like you. And now your. Azhelle Wade. Hey there, toy people. Azhelle Wade here and welcome back to another episode of Making It In The Toy Industry, a weekly podcast brought to you by the toy coach.com. I'm so happy to be back in action today.
[00:00:34] Azhelle Wade: The end of June, I suddenly ended up in the hospital unexpectedly bringing my son into the world a month and a half early via emergency C-section. It was a traumatic and really tough time, but I'm glad to be here. And while I was away on my mat leave, I couldn't help but hear all of the changes coming to tariffs with tariffs being placed on some of the countries that we were looking to shift our production to as an industry like India.
[00:01:06] Azhelle Wade: And then seeing our 30% deal with China tariffs being held till potentially November. There was a lot to talk about. And now we're back just a few days after the end of the de minimis exemption, and I want to do a mind map breakdown of the. Biggest tariff shift in toy E-commerce. We are gonna be diving into just this huge regulatory change to hit the toy industry in years, specifically going to be affecting the direct to consumer e-commerce sales in the toy industry.
[00:01:39] Azhelle Wade: And instead of just reading headlines and thinking about, like, talking about what's going on. I thought it'd be more useful to break it down using a mind map. We've done this before when AI was first introduced into the industry. We'd done this with, uh, the COVID pandemic, and we're gonna do this again.
[00:01:54] Azhelle Wade: And the goal here is to identify future opportunities and threats so that you can make strategic changes in your business. Now. Now the four branches that we're gonna be exploring are, one, the immediate effects. Two, what increases in value. Three, what decreases in value? And four, who are the heroes? These are the four branches of this elimination of the de minimis rule.
[00:02:20] Azhelle Wade: By the end of this episode, you're gonna know exactly how this change impacts or could impact your business. Whether you're a small maker, maybe you're just aspiring to create a toy brand. You'll have some ideas on how you can turn this disruption into an opportunity depending on where you're based. Now, let's just dive right in.
[00:02:39] Azhelle Wade: Get started on that mind map branch one, the immediate effects. Oh, by the way, if you are able to do this exercise with me, pull out a sheet of paper, ideally just a blank sheet in the center right de minimus exemption. Circle that. Then create four spokes coming off of it. At the end of each spoke, write one of the branches, one, the immediate effects.
[00:03:03] Azhelle Wade: Two, what increases in value? Three, what decreases in value? And four, who are the heroes? Write those on. All four spokes. Circle those as well. One of those on each spoke. From each of those four points, you're gonna make additional branches and that is where you're gonna put your predictions or your analysis of what's already happened, or both.
[00:03:25] Azhelle Wade: So that's what we're gonna dive into today. So feel free to write what I share, but add your own thing. Something I say might inspire something else for you. Write that down. Alright, let's get started with mind map branch one. Immediate effects. Okay. What is or was the de minimis exemption? That's the first thing we've gotta understand before we can move forward.
[00:03:44] Azhelle Wade: So the de minimis exemption allowed any goods, any packages shipped under the $800 amount to the US was tariff free. As of August 29th, 2025. Small packages under the $800 shipped to the US now actually faces tariffs. Previously. Those shipments enter tariff free because of that exemption. This essentially impacts international sellers and factory direct businesses.
[00:04:11] Azhelle Wade: So for example, if a company is currently located in the UK and they're shipping to a customer in the us, they could ship a $25 toy from the UK to the US without having to pay tariffs into the US, and tariffs could amount to 20%, 10%, now 31%. Right. But with the de minimis. Rule being ended. Now that company is going to have to pay a tariff on every item that they import, and they're passing that tariff cost onto the consumer.
[00:04:43] Azhelle Wade: So there's, what we're seeing, what companies are reporting is actually sending an additional bill or adding an additional line item for the consumer to pay the tariff fee. Now, another immediate effect, make another branch off of the immediate effect circle. So according to the guardian. In 20 24, 1 0.36 billion shipments entered the US under de minimus.
[00:05:05] Azhelle Wade: That is a value of $64 billion, well over $64 billion of goods. We can expect that number of shipments to be affected right now because what is happening? Is even if companies want to send the goods to the us, let's say they have an exorbitant margin of 90% and they're like, you know what? We don't care.
[00:05:30] Azhelle Wade: We will pay the tariff rate. We still wanna sell to our US based customers. Well, they're struggling. They can't because their countries don't have the system set up in place to document all of these items, collect the tariffs. And inspect them as now required. We're getting a bit into this later, but as a result, a lot of countries have paused shipments to the us So the immediate fact we're focusing on here is a loss of revenue.
[00:06:01] Azhelle Wade: So the immediate loss that we're seeing here. Is a loss of revenue, but where is that revenue loss coming from Now, if 1.36 billion shipments were entered under the de minimis rule in 2024, that is clear that those are items that people in the US have paid for that are being shipped from outside of the us.
[00:06:20] Azhelle Wade: So this is essentially kind of placing an embargo on a big chunk of direct to consumer or maybe all of direct to consumer trade, quote unquote. But it does leave opportunity and we will explore that in our further branches. But let's move on now. The third branch we are gonna pull off of the immediate effects bubble is shipping delays and a pause in international order.
[00:06:43] Azhelle Wade: So we're seeing countries like Japan, Germany, and the UK pausing international shipments to the US because they haven't had time to adjust to the new processes yet. Because these major shipment companies can't adjust to the new processes. That's also affecting international creators who use those shippers.
[00:07:04] Azhelle Wade: So we're also seeing international creators completely pause any orders to US customers, which I'm sure is going to be affecting their bottom line greatly, as many of them may have US customers. Big chunk of their customer base, because keep in mind, the US toy market accounts for about 39% of the global toy market.
[00:07:29] Azhelle Wade: So I mean, that is just bound to be a huge percentage of customers for international toy companies. Okay. And the fourth and final branch that we're gonna explore right now for immediate effects is. Additional processes and logistics for importing. Now, we acquired a fact sheet from the US Customs and Border Protection that lists the suspension of duty, free de minimis treatment.
[00:07:53] Azhelle Wade: What that means, and apparently every small package now needs a customs document, a harmonized tariff code, and may be subject to inspection. Delay that is really putting a huge halt on the physical goods that we can transfer back and forth. So that is kind of our immediate effects of the halt of the de minimis rule.
[00:08:19] Azhelle Wade: We have four branches off of our core bubble. The $800 loophole is gone. 1.3 billion shipments affect. Did delays and pause in international orders from shippers and toy companies, and then now a new customs process that is causing additional delays. So essentially delayed shipments. Now let's look at branch two of our mind map.
[00:08:46] Azhelle Wade: What is going to increase in value? So for this branch, we look at the centerpiece, the end of the de minimus exemption rule, and we say, what is going to increase in value with this rule in place or with this rule now being put at an end? So what will increase in value? One of the obvious pieces is US warehousing and three pls.
[00:09:12] Azhelle Wade: For companies that can afford to make the move, that have the room in their margin and that have the additional revenue sitting to invest in this. Having a strong inventory base in the US and being able to fulfill US orders domestically is going to. Be the only way that a company can truly stay in business with standard margins of anywhere between 50 and 70%, it will avoid per package duties and custom delays as well.
[00:09:42] Azhelle Wade: Because remember that we looked at in our previous branch, it's not only the additional cost to ship goods, but it's also the additional delay. So it's actually more advantageous for an uh, international company to ship more product to the US all at once. Deal with the importing process one time for, let's say 3000 units, and then individually sell those units to one-to-one customers throughout the us and then they can also use that inventory to sell a few pieces to specialty retailers who might only order 10 to 50 pieces at a time anyway.
[00:10:19] Azhelle Wade: Warehousing when you are doing direct to consumer sales or specialty sales used to be kind of an additional luxury. Something you didn't really have to do if you were not based in the us, even if your primary customers were in the us. But now it is a strategic advantage to have that in place. So let's look at one example.
[00:10:39] Azhelle Wade: One of my students has a big percentage. Over 50% of their consumers are from the US market, and they made the decision to actually get a warehouse in the us, put a big chunk of their inventory in the US, and have that warehouse fulfill orders domestically. It will cost them more upfront to set up. And then yes, there is a monthly fee to maintain a warehouse with goods in it, but the customers will be happier, they'll get their product faster.
[00:11:09] Azhelle Wade: And for any competitor of that brand or of that product that, that are not based in the us. This student will have a clear and immediate advantage simply by being able to get their goods to their customers fast and at the initial promise price without having to tack on additional tariffs. That is something that we're already seeing a lot of.
[00:11:31] Azhelle Wade: Now if you are considering doing a three pl, there are some well-known ones you can look up online like ShipBob G 10 Fulfillment, or even Amazon FBA for warehousing options. Now let's look at what else will increase in value with the removal of the stim minimus exemption. I believe that will be your brand's value.
[00:11:53] Azhelle Wade: Your brand can actually benefit from the removal of this de minimus exemption, and here's why. Many people are wary of knockoff toy brands that are available on Sheen. You can even see knockoff products on Amazon. Definitely knockoff products on Temu. The reason that these factories create these knockoffs is because it is so affordable for them.
[00:12:16] Azhelle Wade: To ship the product to the us. Additionally, they are the factory, so if they have the product directly, they can make more of a margin selling it directly to people in the US rather than selling it to you, the toy company who will then resell it to the people in the us. The removal of this exemption means that these small packages are no longer going to be as profitable as they once were.
[00:12:43] Azhelle Wade: So what will have to happen is these companies, and there has been some report that this may be happening, that companies like Temu and Shehan are gonna be looking into getting warehouses in the US to sell product directly before the time being. It can be a bit of a buffer, allowing the original creators of products that were knocked off some room where now the knockoff companies can't compete as easily.
[00:13:10] Azhelle Wade: Another area is these knockoff companies were also moving so quickly. So whereas a creator would spend, you know, six to eight months perfecting a new item, launch it and be really proud and sell a few. The toy. Many factories that would knock off these concepts could throw out different themes and colorways almost weekly, and have it ready to sell directly from their factory and ship it right on over.
[00:13:38] Azhelle Wade: Well, now there's gonna be an extra step in the process where they're gonna have to get a warehouse in the us. Now, remember also the costs are very different here in the us The reason that it's so profitable for these factories to sell directly to the us. Is just the value of the dollar. And now if they have to not only sell to people in the US but buy a service like a warehouse and a fulfillment center in the US, that is also going to eat up into their profits much more than they originally were comfortable with.
[00:14:10] Azhelle Wade: Because of that, they may not be willing to take the risk on developing these knockoff products. Now, another way this may end up helping companies that get knocked off is if the knockoff company has a warehouse and a fulfillment center here. Does that mean they also need to have some form of a US based, and if they have some form of a US base, does that make it easier for toy creators that they are knocking off to go after them?
[00:14:38] Azhelle Wade: And receive some sort of damages for the stolen ip. I don't know that is yet to be seen. That's why we're adding it to our mind map. Now, what else will increase in value? Safety compliant products. Safety compliant products are gonna increase in value if you are developing your toy the right way. This is a huge plus for you.
[00:14:59] Azhelle Wade: Flyby net operations factory selling knockoff non-compliant goods are not gonna be as easy to pass. Why is that? Well under the de minimus exemption, since small value imports could enter the US duty free with minimal oversight, anything under $800. That meant factories could ship directly to consumers without having to go through formal customs clearance.
[00:15:23] Azhelle Wade: That means products would skip safety testing and they could be non-compliant with US consumer laws. So you know, our A s TM F 9 63, which is our main toy safety standard, our age grading requirements, all of that could be ignored because they did not have to go through the formal customs clearance. It created a loophole for unsafe low quality toys, which is why so many toy industry organizations warn against buying toys from Temu.
[00:15:52] Azhelle Wade: It's because they can get away with not being safety tested and still get to your front door. Now that every imported package requires full customs entry. Products are all gonna be under much more scrutiny. I mean, we don't know when you're gonna get your products. Now, it's gonna take a lot longer since there are now 1.3 billion products going through this process.
[00:16:15] Azhelle Wade: But once the product does make it through, you can rest assured that it has had to go through a full customs entry process with HS codes, product descriptions, compliance documentation, some in some cases, packaging, which could be inspected or held just for labeling incorrectly for any. Other safety or regulatory red flags oversee sellers without a US business entity or a warehouse could be held even more accountable.
[00:16:42] Azhelle Wade: So toy companies that already meet us safety standards like you, I'm sure, are now gonna stand out. They're gonna be trustworthy and compliant. They're gonna have an easier time getting their products into the US from China, or they'll just be able to get their products in at all. Because of that, they're just going to be the product that is available to consumers.
[00:17:03] Azhelle Wade: Okay, so the next thing that's gonna improve is customer experience. Because of the fluctuating tariffs, there have been products and packages sent with surprise duties and tariffs. With this removal of this de minimis rule, there is going to be a lot more scrutiny upfront before the product actually gets here into the US so that we won't have the surprise duties.
[00:17:28] Azhelle Wade: We'll know what they are right away. The customer experience could potentially increase because they won't be surprised with costs that they weren't expecting. Now that is if the company is correctly implementing and aware of the removal of the diminished rule and they're aware and they're not gonna try to pass that cost onto the customer, uh, later.
[00:17:51] Azhelle Wade: But additionally, US based fulfillment could make things a bit smoother when product was coming directly from. Factories, at least it could take two to four weeks for the product to arrive. It was impossible to return the product. There were a lot of layers there, but now with requiring factories to get their product to a US-based warehouse to ship out, to make any reasonable amount of profit, they're just become, it becomes a little bit easier for the customer to get their product faster from the.
[00:18:20] Azhelle Wade: The date they place the order to also being able to return their product. Now, that's not so much the case for, let's say a creator based in the UK who is shipping directly to the us. That's, this really isn't gonna change their customer experience. If anything, it might make their customer experience a bit worse unless they hold a US warehouse, they're gonna.
[00:18:43] Azhelle Wade: Face a longer time to get into the US because of the customs, um, and tariff process that now has to happen no matter the size of the package. And the last branch on this is bulk importing is going to increase in value. So. What I see happening is two things. Bulk importing will increase in value, but also so will the, uh, MOQ orders.
[00:19:06] Azhelle Wade: So I think factories will be getting higher MOQ orders than they were in the past, because when companies run the numbers to see, okay, if we manufacture a thousand units and ship a thousand units. But we know we're gonna need 2000, you know, within six months. It might make more sense for us to manufacture all 2000 at once and ship all 2000 at once.
[00:19:26] Azhelle Wade: Um, so basically it's gonna be more efficient to ship products in bulk, fulfill from within the us. We're gonna see bulk importing being the primary way to go. Now another spoke we can add to what will increase in value. I would also say wholesale sales to specialty retailers to obviously larger retailers, more small toy creators and larger companies are going to want those wholesale sales because that's where you sell more than one product at once.
[00:19:58] Azhelle Wade: If it's a specialty retailer, it might be 50 to a hundred products at once. If it's a large big box change, we're talking 10,000 units. Because it's going to be more advantageous for companies to ship big orders, keep them in warehouses, and ship them directly to consumers or to their wholesale customers.
[00:20:16] Azhelle Wade: Now again, that's gonna be the case. If a company does both B2B and B2C. If they're only focused on B2B, then this may not be a primary concern of theirs. But if a company is doing both, they're gonna wanna consolidate their shipments and get as much as they can. In, in the Made and then in the US all at once to save on those costs.
[00:20:39] Azhelle Wade: Next for number seven, we are gonna put Evergreen products. What does that mean? Evergreen products are just kind of like you're evergreen. Like let's say you have a friendship bracelet kit, you have an action figure set. You have like a plush bear. The products that never go out of style, they're not dependent on any movie or popular animation or show or, or anything.
[00:21:00] Azhelle Wade: Those evergreen products, I believe, are going to be increasing in value. The slots in stores for those evergreen products are gonna be increasing in value. Why? Because it'll be easier to keep the same skew in stock than it will to filter through different holidays and themes and different skews for different events because we have this need to import everything to the US before we can ship it out.
[00:21:25] Azhelle Wade: So. Products that we can order in more bulk. I mean, it's the same. It's almost similar to number five, back to bulk importing. It's gonna be really important. Now the last piece is gonna be an interesting piece. I want you to think about number eight. What else will increase in value? I dare say digital products.
[00:21:43] Azhelle Wade: Toy companies have kind of toyed with this. We see some exploration into the ROBLOX world. We see some exploration into craft kits that come with digital arms. We see some exploration with augmented reality QR codes that come with cards. I believe digital products are going to be one way that companies can offset any costs that are gonna be incurred by the loss of the de minimis exemption because these digital products can potentially, depending on what your product is, these digital products can supplement the experience with your toy or game without adding any additional tariff costs, without adding much addit, more additional overhead at.
[00:22:28] Azhelle Wade: So I really think this might be an era where toy companies need to think what digital, virtual or downloadable experience can I sell that relates to or works with my product or my toy brand? That is gonna be so key in making sure that you have other products to offset this margin loss caused by, uh, this change.
[00:22:54] Azhelle Wade: Alright, let's move on to mind Map branch three. What decreases in value? Alright, number one, temu. She and wish their old strategy, the old model of undercutting US brands by avoiding tariffs. That's done. The low quality for low price, nobody cares because we're gonna throw it out tomorrow. We don't care if the t-shirt is made of, you know, thread that's gonna disintegrate, that model is out, their cost advantage is disappearing.
[00:23:25] Azhelle Wade: And what is gonna happen when Temu shein, when wish, when they all start offering their same low quality products for the same price or a higher price, a, a price closer to. That of the official high quality product created by whatever company they're knocking off. So what is going to happen? I believe we are going to see customers still buying these products from Te Mu Shein and Wish, but quickly seeing that the prices are a lot higher than they used to be, and that the quality is.
[00:23:56] Azhelle Wade: Same, maybe even lower, to offset the cost of these tariffs and to offset the cost of now safety testing they might have to pass to make this product. So their cost advantage is gone and I believe soon their quality or what was left of it will be two. Now the next thing that will decrease in value. The one-off knockoffs from factories.
[00:24:25] Azhelle Wade: So I'm sure you've seen when a successful product comes out, specifically on a site like Amazon where the data is available for everyone to see, there will quickly be a knockoff from a factory of that product coming out. Now the decrease in value is actually gonna hit. The factory side, because for them, the value of knocking off that item is going to decrease because they can't just quickly knock it off, copy the look, copy the material, get the colors close, and then just ship it out.
[00:24:56] Azhelle Wade: Now they're gonna face custom declarations, tariffs, higher risk safety regulations. There's a whole process they're gonna have to do to. Import it into the US so it just may not be worth it. So it might, um, decrease in value in that way for them. And because it decreases in value, we may see less knockoffs because it may just not be worth it.
[00:25:18] Azhelle Wade: Or maybe we'll see knockoffs of higher priced goods because they need to be able to make a larger margin on the products that they would be knocking off. All right, let's move on. Number three off of this branch, what will decrease in value? Cross-border D two C cross-border, direct to consumer. So unfortunately, solo sellers, solo toy companies, toy entrepreneurs who are outside of the US that do not have a US infrastructure like a warehouse are going to struggle to stay profitable.
[00:25:50] Azhelle Wade: They will not be able to, most of them will not be able to import their goods with a margin that is reasonable for them to stay in business. If they try to continue to import direct to consumer without having a warehouse in the US to be able to ship from here, um, what will, what they're gonna see happen is a huge cut in their profit margin and a huge addition into the.
[00:26:16] Azhelle Wade: Their delays in their delivery. That alone will lead to consumer complaints because unfortunately, Amazon has trained consumers to expect, you know, you order a product and it comes within two, three days, sometimes even the same day. So now if you are selling to someone, if you're based in, let's say Canada, and you're selling to someone in the us.
[00:26:38] Azhelle Wade: And you are shipping direct to consumer still because you do not have a warehouse in the US because of these new inspections required, you are going to face delivery delays, especially right now as things are getting figured out and you're gonna face additional costs. So. There are clearly gonna be consumer complaints waiting for product.
[00:26:57] Azhelle Wade: You do not wanna be sending out product that won't arrive in time for Q4 right now for the holiday season and additional cost. So you don't want your customers surprised with an additional tariff fee after they've already thought they paid the price for the product. Alright, let's move on. Uh, what else will decrease in value?
[00:27:14] Azhelle Wade: Number four. The fourth spoke I have is impulse toys. So impulse imports under $800, may not seem worth it anymore. You know, they used to slide under the customs radar. You don't have to pay a tariff on it. But now they subject to tariff. The margins are gonna be completely eroded. These goods were already a low margin item, but they were all about volume.
[00:27:37] Azhelle Wade: Right? Okay. So let's say it's not really worth it for a company to be developing these impulse toys anymore and importing these impulse toys into us just to sell them directly. It's eroding margins. What is gonna happen? Perhaps there is manufacturing of impulse toys, uh, gonna happen in the States.
[00:27:57] Azhelle Wade: Whether that means someone, uh, company's actually doing an injection molding, or if they're small creators like Salobo Toys who are going to be 3D printing their own impulse toys. Uh, we see a lot of impulse toys 3D printed. That also might mean the rise of the impulse price point. Instead of three and $5, we might be at an impulse price point of 10, 15, even $20.
[00:28:23] Azhelle Wade: Alright, what else will decrease in value number five? What I have on my list is custom or limited addition. Products. Okay. This is a tough one because on one hand I believe this will decrease in value in the sense that it will decrease in value as far as interest for a company to develop. This is not gonna be an area of business that companies say, oh yeah, we need to do like a custom one-off doll, because there will be so many additional costs just to get that one-off doll in that it's not gonna be worth it.
[00:28:54] Azhelle Wade: However. In order to make a product that is going to be a one-off, that might have a limited run, it might just have to be more expensive. So in some ways it could increase the price or value of the actual product for these custom dolls, but in decrease the. Value of adding that to a product assortment for a company.
[00:29:15] Azhelle Wade: Now a larger company has room to offset something like this, but for a smaller company, if you were doing, let's say custom one-off dolls for your consumers, something like that, if it's not being made domestically, is not going to be worth it moving forward. Alright, let's move on to our final mind map branch.
[00:29:32] Azhelle Wade: Who are the heroes? I love the hero section. So the heroes are the people that are gonna come out as winners. The heroes kind of tells you. Who you need to align yourself with, or holes that you can fill to become a hero of this change in itself. So number one, who are the heroes of the end of the de minimus exemption?
[00:29:54] Azhelle Wade: Number one, I have US based toy creators. Okay. Why is that the, we're the winners. Why? Um, because there is a little bit more protection for us to not lose sales over other knockoffs that are underpricing goods and devaluing our product. The US-based toy creators are heroes because our domestic shipping ability is now a major.
[00:30:20] Azhelle Wade: Advantage. We'll add to that and say US-based toy creators that are doing their own manufacturing domestically, whether that means they are sewing pluses, um, they are injection molding somehow at home or they're 3D printing, they are going to be the heroes. They don't have to lose sales and they don't have to make any adjustments.
[00:30:43] Azhelle Wade: They can keep doing business as usual. And not only that now. They don't have to worry so much about knockoffs. Number two, second Hero, international brands with US warehouses. So brands that have invested in smart logistics are now going to just appear more professional and trustworthy because while everyone else is throwing banners on their website saying.
[00:31:06] Azhelle Wade: Shipments to the US have stopped as of September 1st. While their competitors that don't have a US base are doing that, they are able to continue serving business as usual and little by little taking over that market share. So international brands that have US warehouses are able to ship direct to consumer are going to have a major gap to fill in the market as little by little.
[00:31:33] Azhelle Wade: All of these international companies who can no longer ship to the US have to pull out completely, or they have to raise their prices or add tariff fees that are definitely gonna turn off their consumers. These international brands, the brands that have US warehouses that are able to continue to serve their US customers are gonna avoid this customs chaos, and their customers are going to be so satisfied.
[00:31:59] Azhelle Wade: They're going to have such appreciation in a time of chaos, especially coming into Q4 Christmas season. They're gonna think, oh my gosh, this brand is so reliable. I'm so glad that they're here. And it is going to build a strong relationship between that brand and that consumer in this time. Next Hero number three, I have three pls and fulfillment partners.
[00:32:19] Azhelle Wade: So companies like ShipBob, G 10, fulfillment, Amazon FBA. Simply, they are seeing major demand as all businesses, not just inside the toy industry. Need to get warehousing in the US to be able to stay profitable to maintain some of their margin. So these three pls and fulfillment partners are likely gonna be booked and busy.
[00:32:43] Azhelle Wade: If you're thinking about getting one look into it now. You do not wanna wait until they, they've raised their prices or they say they don't have any room to take on new clients. They are definitely going to be the heroes of this, but who else is a hero of a big change like this? If you're based in the US and you've been thinking of starting a toy company, it could be you.
[00:33:08] Azhelle Wade: If you think about the ways that either you can produce domestically, obviously that would give you the most margin. But if you plan to launch a company and ship the product from China to your home, your garage, or a warehouse. You stand to benefit from the de minimis exemption simply because of the amount of competition that is instantly and overnight being cut down simply due to affordability.
[00:33:40] Azhelle Wade: Now, I don't know how long this will last. I, I mean, it seems like this is the new normal now, while this de minimis does. Put a bit of a restraint on toy entrepreneurs, and it does make things more challenging for international entrepreneurs. Shipping to the US specifically, I do believe it will be a net positive for the toy industry simply because it makes.
[00:34:04] Azhelle Wade: It more difficult for knockoffs like Shein and Temu to take revenue from this industry and deliver low quality and unsafe product to consumers. So while this has been a challenge for myself and many of my clients, it's also. I really do believe it's going to be a net positive for us. Okay, a quick recap of what we covered today.
[00:34:27] Azhelle Wade: Use this de minimis shift to reassess your competition. Who is still in the game? Who dropped out? If you haven't launched your product yet, look at who dropped out as a potential opportunity for a gap that you can fill. Protect your products. This is your time to show up on sites like Amazon and other marketplaces where knockoffs were a concern, but now you can have a little bit more confidence that.
[00:34:50] Azhelle Wade: Because of the additional inspections, they won't actually be able to compete in price and quality with you. It's also time to level up your logistics. Warehousing if you're an international brand, is no longer optional. It's a part of your strategy for the links mentioned in this episode and for the sources.
[00:35:09] Azhelle Wade: Excited to make this episode, please visit thetoycoach.com/284 . As always, thank you so much for spending this time with me today. I know your time is valuable and that there are a lot of podcasts out there, so it truly means the world to me that you tune into this one. Until next week, I'll see you later Toy people.
[00:35:29] Azhelle Wade: Thanks for listening to the Making It In The Toy Industry Podcast with Azhelle Wade. Head over to the toy coach.com for more information, tips, and advice.
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