Viahart President Molson Hart said reshoring will allow his business to save money on shipping costs and avoid possible incoming duties or tariffs on toys in the latest episode of the Bring it Home podcast.
Bring It Home celebrates the North American manufacturing renaissance, reindustrialization and reshoring taking place across the continent. Its co-hosts are Craig Fuller, founder and CEO of Firecrown Media, and JP Hampstead, strategic analyst at Firecrown,
Viahart designs educational toys and stuffed animals, sends them to factories in Asia to be manufactured and brings them back on cargo ships to a warehouse to be stored and eventually shipped to customers.
“If you’ve ever been to a Build-A-Bear workshop, you can take a skin at one of these toy stores that are in malls, you can pick a skin and you can attach it to a machine,” Hart said. “The machine will fill that skin up with plush and then it gets sewn closed. So, we have decided to import machinery from China that will allow us to fill skins from Asia in the United States.”
That will allow his company to do two things: save money on shipping costs and avoid possible incoming duties or tariffs on these toys.
“Some of our plush animals are really big,” Hart said. “… If you can import those items as skins instead of filled plush animals, you save a lot of money on container shipping.”
Hart started his entrepreneurial career with a visit to China to learn how to manufacture and sell toys. It wasn’t easy.
“Unfortunately, that first factory I found was in the wrong part of China,” Hart said. “… I was in like a tier-three city literally a kilometer from North Korea. I knew where I was going, but I didn’t know what was going to find me when I got there. I learned a lot of hard, painful lessons. About three or four years later I ended up getting shaken down by corrupt cops in that town and had to flee the country.”
While his initial experiences in China were difficult, Hart said that they served as great learning opportunities for him.
He spoke to the advantages of manufacturing in China.
“If you ask Asian factory bosses or people who have had factories all over the world, Chinese workers are famous for having the highest labor efficiency of any worker of any country in the world,” Hart said. “[They] work hard, they work fast, and they’ll happily put in 70 [or] 80 hours a week, so that’s important.”
Additionally, Hart said people in China generally have very strong math skills, which is key for manufacturing. He also said Chinese infrastructure is fantastic.
“They run their ports better and faster than we do [and] they have good airports,” Hart said. “I think our freight rail might still be better than theirs. They’ve got a really good barge system, so they’re moving things on the water … . I think that they do their government subsidies in a pretty intelligent way. Those are some of the things they do well.”
On moving manufacturing back to the U.S., Hart said being able to fit more items in containers by shipping stuffed animal skins rather than the filled product is a big motivator. But nothing in business is certain.
“I’m expecting to lose money for a little while because of my overoptimism and because whenever you start something new — we’re effectively building a small factory — you tend to lose money at the beginning and then over time you figure things out,” Hart said. “I don’t really know what it’s going to look like. I wish that we got some incentives from the government in terms of property taxes and stuff like that, but so far the local government hasn’t provided us with any of those.”
While he’s a little concerned about the business move, Hart said that it still sounded exciting and like something he needed to try.
Other headlines discussed in this episode include:
- President Joe Biden’s newly released economic data dubbed the “Investing in America” agenda.
- Electric vehicle manufacturer Rivian’s $6.6 billion loan from the department of energy to fund building a production facility in Georgia.
- The S&P’s Global Manufacturing PMI survey showing manufacturing sentiment is now the highest it’s been in 31 months.
The Bring It Home podcast is currently on YouTube and will soon be available on other podcast platforms.