We're not, we're not keeping that money. It's
going directly to the government. Hello. Welcome
to another episode. Today we have a guest. Tara
is the founder of Beauty Cold. Hi Tara. Thanks
so much for joining us. That doesn't sound exciting
at all. Yeah, come on Tara. So yesterday you
called me, right. And you wanted me to send out
an email to your clients. And I want you to.
Tell us like what led you to that point and painted
a picture for us. So everything, all the braces
keep increasing. They've been increasing steadily
for the last, well always, they always increase
steadily, but in the last few years they've increased
at a steeper level. And sometimes I, well, I
guess I was under the understanding that maybe
some of it was just kind of a yo -yo. you know,
media, drawing attention because of politics,
political rage. And I kind of thought that they
might flip flop a little bit. I thought that
maybe just like our dollar gets a little better
and then summer goes in, it going down, all that
travel and the petroleum prices. But I don't
think some of these increases are going to yo
-yo. I think they're sticking around. And our
Canadian versus US or euros is a little better
right now, but they're predicting that it's not
going to stay. So we had to bite the bullet and
increase our prices. So we try not to do that.
We know that there's a lot of livelihoods dependent
on what we do. And there's a lot of, you know,
studios and business owners that we don't like
to yo -yo around with. with their livelihoods
or ours, but we had been kind of eating some
of the costs. And yesterday it got to the point
where we could not do that anymore. Yeah. Yeah.
I think I just want to fill in a few blanks and
like just a little bit of context too. So as
a supplier, you bring in products and you bring
products from everywhere. You bring in products
from Europe and you do bring in products from
the United States. And you notice the last shipment
that you brought in from the United States that
your cost on the like taxes or I don't know how
you, I know that word tariffs is going around,
but I mean, there, it was labeled differently
on your invoice, right? So I didn't think that
they had come into full effect yet. So it was
just bringing in small shit rents, kind of waiting
to see, just bringing in enough to get a spy
thinking that maybe they'd pardon or do put another
pause or do away with it. So I just brought in
like a small $2 ,500 order and $2 ,500, 25 %
tariffs on is a thousand dollars. So I got my
bill and I see the SEMA tax, which I really paid
attention. I'd never seen it before. So I guess
it's a special import measures act. It's been
around for a while, but I hadn't seen it on any
of my. brokerage invoices before. And yeah, so
the 25 % tariffs, that's pretty big. And when
I reached out, I'm like, is there some kind of,
is there a way that we can file to get these
back? Is there some kind of, is there certain
products that don't apply? And basically what
I was told is that this was Canada's direct retaliation
to the tariffs. for our products crossing the
border the other way and So it was put on How
much I want to know like just to kind of create
a comparison in a visual if it was like a thousand
dollars now Pre all of this. What would it have
been an estimate? so We on there there's there
it used to be called a NAFTA the North American
free trade agreement and I don't know heard being
talked about in the news as the worst thing ever,
but it got renamed and depending on which border
you live on. So ours, it's called the CUSMA.
So C -U -S -M -A. So basically it's Canada, USA
and Mexico. And so usually our duties are, are
pretty low. Like the taxes that we pay, like
five, 10 % tax when it's coming across the border
because of that. Trade agreement. And then you
have your shipping trees and that on top of that.
So usually we kind of account for, you know,
about 20 % to get it landed here between our
freight and the taxes. But then with this new...
But that's it, like included everything at that
point, right? Yeah. Now it's more than the building
in taxes. Plus the extra, yeah. Sorry, wasn't
there something about a low value packaging that
they wouldn't tax on if it was low enough, bringing
it across the border? There was like a little
loophole in it. Yeah, I think there was something
about, what was that on? I think I saw something
about $800 US, but I think that that could be
going the other way. So the products that are
coming from here and going. South to the US,
not the products that are coming from the US
to Canada. Yeah. Now it doesn't matter the amount.
It's a set tax of extra 25%. And it's certain.
So when anything crosses the border, they get
a code. Like that's your import code. So skincare
has its own court code, probably soaps and things
have their own code. We bring in like, for example,
we have our facial bed covers that we bring in.
Those have a code. And actually that code isn't
being taxed with this term, the SEMA tax. Are
you finding it to be products, mainly products?
Products that are originating, like cosmetics
that are originating in the U .S. Okay. I just
want to just paint a picture just because I think
in terms of dollars and you're talking in percentage.
So I tried to like So if you paid a thousand
dollars in this tax or whatever on 2 ,500, this
is not 25%, it's 40%. I got, I did a calculation.
And so if you were paying 20 % before you've
doubled like this twice as much you're paying.
Yeah. So you've gone up to paying 40 % taxes
on your stuff. Yeah. That originally saves like
us going to a store and you're buying something
for a hundred dollars, but they charge you $40
tax on top of it. Now you're, you're buying something
for $140, just to kind of paint a picture for
the person listening, that how does it, you know,
not that that is being passed on to the, to the
consumer, but just like that is your reality.
Yeah. And it's, I mean, we're not, we're not
keeping that money. It's going directly to the
government. That's right. And to clear that up,
government of Canada. Yeah. And like, I can see.
In a way it's a retaliation or a deterrent to
buying U .S. goods, but being that they are from
U .S. and the shipping prices aren't as much
because we weren't bringing it from overseas.
So the price reflected that. So sometimes those
U .S. goods weren't priced as high as European
or Australian goods or whatever. Even with the
increases now, they could be similarly priced
goods that have come a long way. But I think
the popularity, they are marketed more for North
America. So there was, I guess there was benefits
because they weren't being brought so far. So
environmental footprint, the prices were. more
reasonable because they weren't coming so far.
But now I guess they're going to be on par with
ones that have come longer distances, I guess.
And the other side of that too is that when these
will use skin care, for example, when they're
sourcing their ingredients and having to bring
it from outside of the U .S. into their products,
they are now being taxed as well from the U .S.
that way, which reflects the price of product
being manufactured in the US. So that might go
up still at that point. I did have a supplier
in the States and some of the implements and
tools that we use in the spas and salons we were
getting from the US, but they were getting them
from China. So they were originating in China,
coming through the US to us. So now that doesn't
make sense anymore. We have to try to find a
supplier either here in Canada, Even though those
implements originate in China, not having it
go through the U .S. and then here because the
U .S. is taxing it and then we're getting taxed
again as it crosses the border. And U .S. has
put even higher taxes on China. So we could be
paying as much as 125%. I was going to say they
are being dinged harsh. Let's say, perspective
-wise, as Doreen mentioned, the percent is 25
right now between Canada and the U .S., but China
is at 125%. So your equipment, your tools, all
those things you're trying to bring one into.
I did bring in a small order again. I've been
bringing in small orders because as prices increase,
are we going to have the same demand? So we're
trying to figure out what's happening with our
market right now. But on a shipment that I would
have paid like $200 in taxes, I paid $800 in
taxes. Wow. Unfortunately, you've had to make
the difficult decision of increasing your prices
on the products that you sell to beauty professionals.
And I think this trickle down goes beyond, like
they're going to, then the beauty professionals
are going to have to increase their prices to
offset the increased prices that they're paying.
And so the end user, that person going in for
a facial or nails or whatever it is, they're
the ones that are also going to, so we're all
paying for it basically, while the government
fight with each other. I mean, I'm a consumer
too, like so many times you go to the grocery
store and you're like, oh, I'm pretty sure it
was $2 a glance last time I was here. And then
you go a month later and I'm like, I'm pretty
sure it was $4 more a month ago, or $4 less.
And then we were just talking about this, like,
Confiat, Costco's now $10 increase. And you're
thinking, oh, Costco, they make lots of money
already. Like, why did they keep, but it, nothing
to do with them. It's a direct, they're being
taxed. So we are being taxed. Like, it's not
going to that, the person that you're buying
it from, it's going to the government. And in,
in the news right now, I, I know every shop,
I mean, we've always tried to, you know, because
we're small businesses, we want people to shop,
we want to shop local and on a bigger scale.
Like we want consumers in Canada to buy Canadian
goods. Like it supports our economy and that's
what they're trying to do. So the border right
now, we've sold some of these products for like
17, 18 years and we try not to do the price increases.
So that's what I mean. If you're used to that
product, you know that we haven't done all these
price increases. So in a way, maybe it's, it
is what it is, but it is also what's making Canadian
goods look a lot better right now, or goods coming
from Europe or somewhere else. I mean, you have
a variety though, like you have Canadian stuff,
you have European stuff, you have US products.
And I think at the end of the day, consumers
want that variety as well. Now, maybe not so
much. Yeah. I mean, maybe it'll benefit the country
in the long run, but kind of know what we like
and when we've been using something for a long
time. And the thing is too, is that this isn't
something that is a quick fix. Like as someone
that's importing product in, you're not bringing
in three cleansers and a mask and a, right? Like
your amount of quantity that you need to bring
in, even though it's a little lower than what
you're normally doing right now, trying to watch
that. you're still sitting on that product. So
that 25 % is still on that. So it's not going
to change, you know, down the road until like
that snowball effect, I guess you could say,
when you're hanging onto the product and all
of a sudden the government's, you know, next
week says they stopped fighting over this, as
we like to call it. And it's okay, we'll stop
now, but you still paid that. You can't take
that away because it's still in what it's what
you paid for. going forward in the future, that
might change. But while you sit on the product
and supplies you have, that price stays at that
increase because you can't absorb that. Well,
not anymore, right Tara? That's right. And I
mean, we are consumers too, as well as distributors.
And I don't take it lightly to be... time consuming
to be increasing the prices. We're on multiple
platforms, having to go in and manually change.
And then every one of our accounts has their
own sale platform or whatever, and they're stickers
on their products or whatever. Like it's time
consuming. So we definitely don't, we don't do
an increase every year. We don't take it lightly
when we do have to do it. What are some, have
you thought about like some solutions moving
forward or strategies? Do you think that we could
help the beauty professionals right now? So we
do have bulk discounts. So when you buy in like
multiples, that you get discounts. So, I mean,
if, if If the market's still there and you're
still selling to your customers, that would be
the best way to... It'll go back to where the
price was before. Right. Or the increase if you
do buy in multiples. Yeah. Like right now we're
just waiting to kind of just see what's going
to happen with the market. Like just like we're
checking labels at Costco, are people going to
be... That we're always using US goods. Are they
going to, are they going to change? We're just,
so we're bringing in smaller quantities right
now. We're just wait to see how it balances out.
But it's, you know, a little scary when all of
a sudden it becomes unpredictable. Well, it's
that supply chain, right? Like when they talked
about, to go back a few years ago, when they
were saying how much it was going to cost, because
they were limiting how many a transportation
could cross the borders. I'll bring up COVID
shutdown, right? They're really limiting it,
which drove the cost up in all of our foods to
that time, right? So when there's a cost to the
supply chain, in the end, us the consumer, or
the beauty professional in that matter, and then
the person at the end of that service buying
the cleanser at a retail, it will affect everyone
in that supply chain. I think that's what people
need to understand how this works. It's not because,
you know, beauty cult Canada's just going to
increase their prices and take advantage of the
fight going on between the countries. It's not
a well and then instead of bringing in like a
$25 ,000 order, I'm bringing in $5 ,000 order.
Skin, cosmetic skincare expires and we like to
have it fresh where it's coming over constantly.
So you're bringing in small quantities. Now your
shipping rates go up. So, and then also too on
that note, you could sell out faster and the
people need to wait for the product. Yeah. Which
here's another side. I mean, you're still pretty
good about doing that, but there's still a little
bit of that. So people need to plan ahead. So
they're not out of their product either. And
then Canada has stricter regulations, but U .S.
is becoming stricter with their regulations too.
So there's been some reformulations, changes
to stocking ingredient wise. the ingredients
of the regulations. Interesting. I think for
beauty professionals, they're going to see these
price increases. It's not just going to be from
your district, it's going to be across the board
from distributors wherever they get their product.
And I think it's knowing that this is going to
happen and then having to take the steps to in
turn increase their prices and doing that knowledgeably
and then being able to explain to their clients.
Like you said, the supply chain, I've increased
it because now my cost has gone up because my
distributor's cost has gone up. In a way, I don't
know, but finding a way to just bring that into
the conversation, if possible, just giving a
warning or just, I don't know, letting people
know. It's going to trickle down to the end user
and the esthetician or beauty professional can't
absorb the price. She or he is going to have
to then pass it on to their customers as well,
but with an explanation. I think, too, on this
one, offering some advice to the professionals
out there, it's a little different when Tara's
saying that you have to send an email to everybody,
right? This is a rapport building industry with
your clients, a relationship. So you might want
to have these conversations starting now if you're
planning to raise it, say, June 1st. So all the
clients coming through, your regulars, have that
conversation with them and say, you know what,
unfortunately, prices have already started to
increase. I've been absorbing that increase and
I can't do it anymore. It's just not making this
affordable to me anymore because it's all platforms.
Use those stories like we shared about the Costco
big coffee pods, right? It's gone up by 25%.
Normally, yearly, you're probably looking at
what, an average of two and a half to 5%, maybe.
Is that fair to say? Two in the industry, normally?
Yeah, most distributors, it's like annually every
year it goes up to usually about 2%. Right. But
usually it's been sometimes per month. The last
couple of years, we've had increases of 5 % annually
and we still did not pass that on. We thought,
you know, when our dollar gets better, We try
to leave room for fluctuations and bringing stuff
in larger quantities and with our dollar getting
better. And we always want to pass on the savings
to our customers. So we, as it fluctuates, we
kind of leave room so that throughout the year,
it'll kind of level out. But on your end. Yeah.
Yeah. But the way, the way that it's going, like
we will probably have. have to do an increase
rate across the board and we'll probably have
to follow suit and, and do it more often. Yeah.
Your hands are tied right now with this going
on. But I think too, like if start having the
conversation, people will start reacting a little
bit to it because it's, it's an everything right
now in all of us as a consumer. It doesn't matter
if it's the food that's being imported in or
whatever it may be. I think if you start having
that gentle conversation with your clients, moving
forward, let them know, is you're probably better
off doing a small increase, say, we're in May
right now, so give them warning for June, and
then a small increase, maybe again in the fall.
But you don't want to be going 25 % higher on
everything because you're hearing that the tariff
charge, that's a huge, and you're going to lose
your clients. We didn't do that. We didn't increase
it to 25%. Some things we had to go as much as
10%, but it's also because we annually weren't
increasing like everyone else was. I meant the
professional right now talking to their clients.
I've told this story many times, but when I first
got introduced to professional skincare, I thought,
wow, like why do people pay that much money for
products? But it wasn't until I started using
it that I realized that it lasts a long time
because it's more concentrated. And really I
was only buying it twice a year. So in the spring
I would buy my birthdays around then. So I would
buy it then and then again for Christmas. And
when you break it down over the year or the months,
like we spend way more money on coffee. We spend
way more money on frivolous things, you know,
you buy things, you're like, oh, a dollar store
or whatever it is. Oh, it's only two bucks, it's
only two bucks. And we're kind of that, you know,
that kind of consumer, like on waste, kind of
wasteful things, whereas skincare, I mean, it's
the largest org and the first thing people see
And I realized like it became really important
to me. It was the one thing that I thought, oh,
I can go without that. Like that's all I wanted
for my birthday. That's all I wanted for Christmas.
And you know, if you broke it down over the years
and how long it lasts, and then little tips and
techniques that your, your aesthetician can give
to you, like putting your product on skin that's
daft, it's going to soak in right away. You're
not going to use this much. your skin can absorb
it better and just kind of sticking to your routine,
not being wasteful, you know. That's a good point
that professionals are looking at some creative
ways to help their customers, their clients at
home, helping them with tips so that they continue
that routine. It'll be interesting how it ends
up impacting the beauty industry across Canada.
But yeah, I think if we start looking at that,
as professionals and start thinking out. COVID
taught us that, right? Like we had to start thinking
differently and some people are really creative
with it. There might be a little more educational
side that you can offer your clients that maybe
you weren't offering as much so that they feel
value in that and why they want to stick with
you as a professional, right? I think, you know,
with lots of things you think more is better,
but there's actually only so much that your skin
can absorb. The rest is wasting. So if you're
going through it too fast, like hopefully your
esthetician will say, okay, what are you doing?
You can't eat it. Like slow down. Like it should
be lasting you this long. Like, you know, and
then, and then kind of look at your, your spending.
It's probably not increasing that much overall.
There's so many times we take our crane, we apply
it right here. and then we don't have enough
to get everywhere so it's like we have to gentleize
and spread it out and then oh you're not supposed
to go like this yeah and then over the head right
over here at one yeah i know if anyone knows
her uh this was really difficult for her to do
she held off for a long time this isn't the first
time we had a conversation about this this was
months ago already folks so but we had to bring
it forward and more and more professionals are
noticing increase. It's not just from, you know,
beauty caught Canada as a liar or it's everywhere.
Yeah. And I think we just want to come on here
and really explain why it's trickling down the
way it is. If that's supply chain and it's just
not going to cost the wrong good. It's like wherever
they're coming. Yeah. And I know since COVID,
I know so many companies that it's just been
such a battle and they just couldn't do it anymore.
There's a few lines that eventually decided to
out. And they're like multi -generational companies
that have been doing it a long time and they're
like, we're just so frustrated. We don't want
to do it anymore. If people look at it this way,
so we're in Edmonton, if any of our listeners
are listening right now, there have been some
like 40, 50 year generational restaurants. that
have not recouped since like the whole COVID.
They've shut their doors now. It's so sad to
see it. Because it's not that the families weren't
continuing with their business. They've literally
just seen the costs have continually increased
their supply chain, right? Or sourcing out the
goods, where they're getting it from and all
the extra taxes and stuff that happened. Well,
and then the last quarter, like, skip the dishes
and all that. Like, we'd been in and out of restaurants
before. And they used to take like a low percent
and now sometimes it's 30%. And you can't not
be on those platforms because it's advertising
everyone else's and if you're not a presence
on there, but like then if your food costs are
so high, you're not making any money. It's interesting
because, and this might not sound very nice,
but if it's a, I don't want to say mom and pop
shop kind of style, but a local restaurant. generational,
that type of thing, I'll physically go drive
there to get it, to pick it up. But if it's these
big franchise, like, I don't want to say any,
but you know what they are, they're very wealthy.
Like then you can do it because they can afford
to absorb a little bit of that cost because they're
making a lot of money. But maybe think about
your local little bakeries, your coffee places,
you know, the little restaurants that are around
that are, you know, like you said, generational,
keep their costs lower. I think COVID helped
with that to understand. It helped me anyways
to rethink that value and go, oh yeah, I never
thought about all that. So, you know, maybe that's
a way to, to look at the beauty industry too
and start looking at where are you shopping?
What are you looking at? Not putting in the big,
big importers down or anything, but maybe people
look at it at the little distribution place and
it's been around for 30 years or 20 or whatever
it may be. It might be a different way to look
at it. All right. Well, that was a fun chat.
Thanks for coming on, Tara. Yeah, it was a fun
topic. Yeah, I know. We'll do a lighter one next
time. Yeah, sure. But the other side of that,
just mentioning what I will say on behalf of
Beauty Cult Canada, is if you are struggling
or having any challenges, things like that, reach
out to have conversations because in the end,
we're pretty creative with our accounts helping
them through. especially these types of things,
the best that we can. So we'd make some good
suggestions, work with you. And then you decide
to take the, you know, the feedback or information
with you and figure it out, see if it's actually
something that'll work for you too. Yeah, that's
right. Because we've, I mean, we're, we've been
on both ends. We, we understand, you know, sometimes
time's going by so fast. And sometimes it gets
to the end of the month and you're like, oh,
I don't know what to even do. We're going to
the drive and go, yes. Why are things not making
sense, you know? Perfect. Well, thank you for
listening and Tera for joining us today. See
you guys all next time. Bye. Thanks for listening
to Beauty Babble.