Uncertainty around US President Trump's tariff policies is making it difficult for businesses to plan. Guardian Bikes CEO Brian Riley joins Asking for a Trend with Josh Lipton to discuss how tariffs are affecting small business owners.
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The trading day ending in another significant selloff, our next guest is navigating the market volatility, including President Trump's tariffs, as a small business executive and joining me now is Brian Riley, CEO of Guardian Bikes. Brian, it is great to see you. Um, I want to start here, Brian, my understanding is that your bikes are made here in America, but that many of the parts, Brian, you rely on, that they're still coming in from China and and so my first question of course, with this tariff fight with China, Brian, just walk us through how how that is and could could impact your business.
Yeah, so it's it's impacting our business. We're lucky that we're at least a couple years ahead of the curve. Uh, having decided to build a US factory, one of the only factories that exist for bikes in the United States. We started on that journey a couple years ago, but a lot of the supply chain for bicycle components are still overseas. So, 30-40 years ago there was actually a thriving bicycle component supply chain in the United States and bicycles were made at scale in the United States and when that all went overseas, so did a lot of the component suppliers and all the different components that that go into building a bike. So, you know, early in the year we were still about 75% of the components uh were coming from overseas, primarily from China. Um, we've navigated this by moving a lot of those components um, about half of them out of China at this point, and by the end of the year we think we can get that down to 20%. But certainly, uh, challenging to do that because there's not that many component suppliers that exist uh outside of China, so we're rapidly vertically integrating as fast as we can. The tariffs are, you know, somewhat disruptive, but we're one of the lucky ones just because we we have a factory and we could accelerate a lot of the uh investment into the United States and get up and running with some of these components where many other people in our industry are kind of stuck.
But but given the exposure you still have there, Brian, does that mean um, how do you navigate that? Does that mean you can you can eat that cost or or are you going to you are going to need to pass it along to customers or or is it going to be some combination of the two?
Yeah, so right now we're not planning to change our pricing at all. We're eating some of the costs and again, some of it is just uh a lot of our kind of investment plan into reshoring a lot of these components and standing up partners that can make these components onshore. That was already in the works for a while and I would say these tariffs are are dramatically accelerating uh how fast we're trying to move down that path. Um, so again we, by the end of the year we think about 20% of the components will still be coming from China, but that's a lot better than 100% and in the meantime, you know we'll we'll take smaller margins and and eat some of that cost and try to get to the other side of that uh that transition.
What's demand been like, Brian? You know, we do hear about an American consumer that that seems to be still hanging in there, but I'm curious what you're seeing.
Yeah, we're we're having a great year. Um, I think what we're finding is a lot of consumers really appreciate uh a product that's being built in the United States and they appreciate the reshoring effort that uh that we've been doing. And again we're pretty much the only one in the industry that's doing it. So not sure if that's, you know, an indication of the broader consumer consumer sentiment, but at least for us, um revenue has been great and, you know, our customers have been really appreciative of of what we're doing. And and I think a lot of people that are buying our bikes are knowing that they're helping to accelerate the reshoring of bike manufacturing and they're excited about that. So that helps us.
And I'm curious, Brian. You know, last kind of a bigger question for you. Why why was it so important to you, Brian, to start a business, create a business where the production was here in America?
Yeah, so Guardian Bikes, the whole entire brand promise is making safer bikes for kids. So, you know, part of the way we do that is in the product design itself. We've brought some unique technology to market, uh called SureStop, that's a unique braking system that helps you brake safer, but ultimately, really being able to deliver on a safer product at scale, you need to have some control over the manufacturing. And so a lot of it is just trying to vertically integrate and control more of the manufacturing process. And the only way we could really do that is build a factory onshore. So initially it was all about, you know, making a better, safer product and doing that at scale and being able to have that repeat repeatability and quality control. And now obviously with the tariff environment it's it's um it's even more of an accelerant to to what we're doing, but I think it's it's, you know, really important that more and more people bring products onshore. I think you get um, you know, now it's a new era and and there's actually cost advantages in doing so, but even without the cost advantages you get a lot of advantages in terms of the quality of the product that you can deliver consumers, um the time to market, ability to manage inventory, all kinds of things. So it was a much bigger story than tariffs for us when we started, um and it continues to be that way and and tariffs just help accelerate more and more of that supply chain uh in the United States.
Brian, thanks so much for your time today and best of luck with the business.
Thank you.