Larry Gaynor’s Post

The Pay To Play Big Squeeze What a year 2025 has turned out to be and it's only March. $4 trillion of stock market vanished. Dollar Tree selling Family Dollar for pennies on the dollar. And the latest: 25% tariffs on all autos and parts exported into the U.S. However, while all that is significant, 2025 has become the do or die year for small businesses. We thought 2020 was tough, 2025 could turn out to be tougher. I have already had to endure two 10% tariff increases from goods made in China, on top of the tariffs Trump put into place in his first presidency. We have the best-selling nitrile gloves on Amazon and already paid a 25% tariff. Now the tariff is 45% and you can't even make nitrile gloves in the U.S. Trump has announced April 2 as Liberation Day. This is the day all reciprocal tariffs will go into effect. Expect to pay more for everything imported into the U.S. from French wine to Italian olive oil to Mexican raspberries. But for small businesses like TNG, we will be watching to see if Chinese tariffs go up another 10% which would be even more crushing. (Note: Trump has hinted that if China sells the U.S. portion of TikTok, he would limit tariffs so that at least is promising if it happens.) While all this is going on, soon the biggest retailer in the world, Amazon.com, is flexing its muscle and increasing fees to do business with them. On top of the added fees, they are looking to grow their ad business even more (now about $70B a year or 10% of their revenue) and want its best customers to up their budgets. And mind you, you cannot increase your costs to Amazon if you sell direct to them. So the Pay to Play model has never been more in force for small business: Increased tariffs, increased fees, increased advertising costs, and let's not forget the increased costs of running a company with higher employment costs, rent and overhead. Bottom line: Businesses of any size have no choice but to pay to play in 2025 and the next three years ahead. CEOs have to make some of their most difficult decisions to stay in the game. To win, your value statement, competitive edge and consumer love of your products or services has to be at an all-time high. Yesterday I deleted my Starbucks app after being a loyal customer for more than 30 years. Walmart stock is down more than 20% from its high as low income consumers cut back so this affects everyone. One thing is for certain: There will be winners and losers like never before. As always, TNG will be a winner and this is going to be my ultimate challenge, more so than any of the 101 Life Lessons I wrote about in my book. Stay tuned as I am writing a new Life Lesson chapter!