ANNAPOLIS, Md. — A military veteran who founded a dog gear company is facing potential challenges from tariffs while trying to maintain his commitment to supporting small American businesses.
Barton O'Brien launched Bay Dog about seven years ago after experiencing frustration with finding rugged and workable gear for his adventures with his dog Walter.
"At Bay Dog, we make canine adventure gear," O'Brien said.
The company produces super rugged, yet comfortable harnesses, collars, toys and more.
Barton O'Brien, founder of Bay Dog, discusses the challenges that tariffs bring while also supporting small American businesses
"We excel at being great partners to other small businesses," O'Brien said.
That commitment means staying loyal to the small American business model that is the mainstay of our economy.
"We never undercut them in price. We don't sell on Amazon. We don't sell on Chewy. And we make what we call our brick and mortar pledge to support them as best we can," O'Brien said.
Because of that approach, Bay Dog products are now in over 2,000 stores across the US, building a loyal following among mom and pop pet stores. To keep costs low, O'Brien manufactures where there is cheap, highly skilled labor - China and India - before shipping products to the US.
Last year, as O'Brien watched then-candidate Trump talk tariffs on the campaign trail, his background in finance on Wall Street told him it would create problems for his business model.
"So, I sat down my team and we made a plan to borrow as much money as we could, advance all of our factory runs and bring over a years' worth of inventory prior to tariffs," O'Brien said.
That bought O'Brien some time. But as the tariff war continues to evolve, he sees a significant problem. Just consider Trump's stated goal of bringing manufacturing back to the US.
"It would cost me as much to produce this in the United States as a consumer pays for it now," O'Brien said.
That's because the biggest cost of this type of business is skilled labor - skill that, if done in the US, would significantly increase the price consumers pay. O'Brien says that's why manufacturers have gone abroad.
"As Americans wages have gone up over the past several decades, any product in which labor is a large input becomes too expensive to produce in the United States," O'Brien said.
Because this trend has continued for so long, the skills to produce those products have moved to where the labor is cheap. O'Brien says the difference in practice between cost of production is as much as 500%.
"It doesn't matter how expensive you make the tariff, as long as you don't lower the domestic cost of production, which a tariff doesn't do, that job is never coming back to the United States," O'Brien said.
Because of the lead time to receive finished products, O'Brien has already placed his next order. But what that price will be and if it will take a bigger bite out of his margins, he and Walter have to wait and see.
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