16 part 3: The Impact of Global Logistics on the Subscriber Experience
In the third and final part of this series, co-hosts Nick Agnetti and Jason Rowland talk with John Roman from BattlBox and John Haji from SubSummit about the most pressing issues facing subscription box businesses today—tariffs and their wide-reaching impact on sourcing, pricing, and sustainability.
Touching on the recent announcements on reciprocal tariffs, including how brands are reacting, the long-term implications for eCommerce, and why many are taking a "wait and see" approach before passing costs onto consumers.
You'll hear firsthand insights on:
- How pricing strategies are shifting in response to new trade dynamics
- The risk of knee-jerk reactions vs. the power of long-term supplier relationships
-The real numbers behind cost of goods sold (COGS) and how tariffs could make or break thin-margin businesses
- The international ripple effects, including new duties on U.S.-made goods bound for Canada
John Haji | LinkedIn
John is a subscription guru and a serial entrepreneur with a decade's worth of experience in the subscription space. He co-founded SubSummit in 2016, the first and only conference devoted exclusively to those who work in or alongside the subscription commerce industry. SubSummit connects today's industry leaders, innovators, and partners who are driving the rapid evolution of how consumers discover, buy, and experience new products.
His background in think tanks paired with his entrepreneurial spirit has positioned him for success within the subscription industry. John has a passion for creative thinking, strategy, design, eCommerce, and more. Prior to starting SubSummit, he also co-founded and served as COO of Gentleman's Box, the first premier subscription service for men which was acquired by Rove Companies in 2020.
As a father of three, John balances his professional and personal life with grace and humor. He has been recognized by Crain's Detroit as one of the "40 Under 40" award recipients in 2019 for his outstanding achievements and contributions.
John Roman | LinkedIn
After leading several successful sales organizations in the telecommunications and software space for almost a decade, John began investing in companies predominately in the eCommerce arena. A college friend was launching BattlBox in early 2015 and John knew he had to be involved, so he invested in it, offering advisement in a limited capacity.
BattlBox started to see exponential growth and the demand for John’s time increased. In early 2016, John made the decision to step away from his then sales leadership role with a software company to join the BattlBox team in a full-time capacity. In July 2019, The BattlBox Group acquired Carnivore Club, an artisanal meat subscription box.
BattlBox continued to see exponential growth with the strategy of leading with content and community. This eventually lead to their Netflix original series ‘Southern Survival’ in July 2020.
In October of 2021, BattlBox and Carnivore Club were acquired by Emerge Brands for$18.95M. In April 2023, John lead a group that purchased back BattlBox from Emerge for $7.17M.
John currently serves as Chief Executive Officer for BattlBox.
Transcript
This is Outside the Box with Asendia USA, a podcast educating US Based brands, marketplaces and e tailors on international shipping topics and how they can expand their global e commerce footprint.
Jason Rowland:Welcome back to the third and final part of this episode of the Outside the Box with Asendia USA podcast. We are wrapping up our discussion on subscription boxes with industry leaders John Hadji and John Roman.
Nick Agnetti:All right, we're going to talk a little bit about, we're going to get towards wrapping it up here, but we are going to talk a little bit about tariffs, Chinese imports, sourcing. And I want to get your guys's perspective on the sourcing space and what you've gotten so far. I mean, everything's so fresh, but I want to hear it.
And so, Jason, if you want to kick it off, that'd be great.
Jason Rowland:Yeah, I know obviously tariffs right now are a huge topic for everybody, right? Today, yesterday alone, I'm not sure when this is going to go out, but Trump yesterday announced reciprocal tariffs. Right.
So this is something that's coming out. There's been this new wave of American kind of instituting these tariffs internationally and they have already had an impact on the markets.
What are you seeing in terms of when you procure items, Are you procuring them from places that are currently dealing with tariff issues? When you're sending these things, are we dealing with additional tariffs? How do you see it affecting the subscription space for physical items?
Not necessarily for know, you know, electronic items, but what are you seeing in terms of your sourcing and what are you seeing in terms of your delivery experience being impacted by those tariffs?
John Roman:So I'll, I'll, I'll jump in first here. You know, so it's a little twofold for us.
, but we also, you know, have:So on that side, we saw about 20% of them put their sales caps on sent texts and emails immediately. We're raising prices tomorrow. You must put your orders in by midnight. That's a little aggressive in my, in my humble opinion.
And the vendors that did that, I don't know if I want to do business with, in general.
I, I think it's, I hate to say it's a, a C in weight, but I think if we look at the experience so far, you know, unfortunately, you can ask five smart people and you're gonna with certainty not get all the same aligned answer on what the administration's exact strategy is. I will say having a name blank on on the gentleman that is actually in charge of of the tariffs.
But but he seems like a very very very intelligent person but again we don't know is the plan actually all these tariffs are in place because we're trying to bring manufacturing back to the states which which is not like we just flip the switch right. That's like a five year, five year plan in five years of no solution going keep going. Right.
So so we've seen some tariffs in earlier this year that were put out there that were then taken back. There's that there's a strong possibility this is all part of negotiation in general.
There's also some chatter right now in Congress where there's some actions in place where they were trying to just force a removal of this tariffs on Canada limiting the executive administration from having the full ability to do. There's a lot going on. There's a lot of moving pieces. I say all that to say regardless of your opinion of any of them.
The reality is I think it's a little aggressive to say we're raising our prices today. I saw people brands raising their prices in November in preparation for it. Right now it's a see and wait for us. Right.
I think we need to know what this is actually going to look like before we make those decisions.
I will tell you for and this isn't just subscription I would argue subscription might even be a a worst case scenario because a lot of them are trying to bring dollar value to the box but E comm in general the average across the board they typically only have about or they have about 45% in COGS and do some quick math increasing those with these new tariffs knowing good and well the vast majority whether anybody wants to admit or not is stuff does come from China. Right. China is the major power there. So you're talking about a number that really changes the impact of the whole economics of that business.
There's a lot of businesses that at the end of the day are making sub 10% this calculates them out of a business. So I think this is a very big deal but I think jumping early is I mean people that are jumping early changing the price they might be right.
I'd rather not do to expense my customers and see and wait.
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John Haji:Okay, Yeah, I have to agree with John on the CUA thing. It's definitely very important and I think you have to plan for this in the subscription box space.
Subscription box companies specifically are already working on razor thin margins.
So of course, when you think of a 25% tariff fee imposed on your products now coming in, when you've been operating for a number of years, the math doesn't add up for your business model. It's going to go upside down.
However, I think of some of these brands out there that have relationships with manufacturers overseas for four, five, six years. Right. And these manufacturers are relying heavily on your business.
The wait and see game for me, I agree with, because you'll be, you'll be surprised.
A lot of those manufacturers will absorb those costs or maybe take on half of those costs, you know, so I think everyone sees, okay, 25, whatever, 30% tariff imposed, boom, that's going to affect me right away, my business. No, I don't, I disagree. I don't think that's going to be the case, actually.
I actually think every part of every party involved is going to work together actually to figure out how this can make sense for every party involved. And I think that a lot of brands might be acting a little too quickly and maybe they're acting quickly and they are going to be right. We don't know.
Right. But I, but I do think that we do need to kind of let this pan out. I think the relationships and kind of like the conversations still need to be.
Jason Rowland:Happen.
John Haji:You know, if, if, if it was black and white and you know, like I was running gentleman's box till this day where 95% of everything that we curated came from China and my manufacturer is like 25%, we'd be out of business. Right. Black and white. That's the case. So when you think of it like that, that's obviously very scary. Right.
But I think you'll be surprised on the leverage a lot of these companies will have in having these conversations with their manufacturers overseas to come to a solution that makes sense for both parties. And that's why I think it's a wait and see game.
Nick Agnetti:Interesting. Thank you both very much for that. And I agree. John Roman, going back to you said you talked to five smart people.
You get Five different, a little bit of variance from five different people as to what's really going on. Right.
If I close my tab from this recording, I think the first tab I'll see is because I was just reading it before we got on was just the executive order directly from whitehouse.gov just trying to dig in even further to absorb it more because this is the business know that we're in. And one of the things that again for, for listeners and viewers to talk about too and us at Asendia, our focus is primarily it's us outbound.
So it's ex. Us. Right. So if we look at, you know, our, our, our biggest trading partner in the direct consumer space being Canada.
From, from a US based perspective, Canada was right, was, was upset about the March 4, you know, the, the tariff changes and, and so they implemented a Surtex on a specific number of HS codes or a specific set of HS codes.
Unfortunately for a company that's in the subscriptions box space that's in northern Michigan, they were highly impacted because they have US made goods. And then there's some that are down south that I have that and there's many others throughout the country.
But I'm using these as example where all of a sudden they were paying zero duty and let's say January and February.
Then all of a sudden we recalculated and they look at, okay, if we look at another 30 day period post March, post March 4th, we're looking at, then they're going to be paying another, you know, $9,000 a month in duty. That's significant. You know, so, so there's a lot of things going on there with that. A lot to shake out. Okay. We're, we're closing in on time here.
I just want to. John Roman. Where can, where can people that are listening and watching find information about John Roman and what you want to put out there?
John Roman:LinkedIn is probably the, the best place, the place I'm most active also online. Queso. It's a blog. It's 80% me, it's 20% other people in the industry. And yeah.
Have some newsletters, have the awesome pod asom, it's a weekly pod every Thursday. You can find it on YouTube. I think it might be the, I mean in my opinion it's the best direct to consumer podcast. But.
Nick Agnetti:Okay, all right.
John Roman:Number wise is in the top. It is in the top though.
Nick Agnetti:Very good. All right, thank you. And John Haji, what about yourself?
John Haji:LinkedIn and then our, our, our sub summit. LinkedIn. Okay.
Nick Agnetti:And sub.
John Roman:And coming to sub in Dallas.
Nick Agnetti:Yeah. There you go. That's a thank you, gentlemen. Thank you.
John Roman:Thank you.
John Haji:Yes.
Nick Agnetti:What are the dates for sub summit?
John Haji:May 28th through 30th, Dallas, Texas.
It's going to be filled with tons of merchants across many different verticals of subscription, subscription box membership, loyalty rewards, digital streaming, all of them. Talk in every aspect of the business that you need to kind of grow and scale your business. There'll be about 2,000 attendees there, so be part of it.
And I won't reveal who the headliner act is, but if you check out Sub Summit's LinkedIn pages and follow us on social, you'll get a sneak peek on who's headlining our after parties on day two. Beautiful.
Nick Agnetti:Thank you so much. Jason, do you have anything you want to add before you wrap up?
Jason Rowland:Great.
John Haji:Just.
Jason Rowland:Yeah. Thanks guys for joining us today. Good luck at Sub Summit and thanks for the great discussion on this stuff.
John Roman:Yeah, thanks.
Nick Agnetti:Thanks so much, guys.
John Roman:Thanks, guys.
John Haji:Yep. Thanks, guys.
Voiceover:Share subscribe and download our podcast to learn more about today's topic or for a free consultation, email us at ecommerce.usa@asendia.com. Come back for more insightful discussions on E commerce, shipping to Canada, Mexico and worldwide.
