Frequently Ask Questions:
New Tariffs & Surcharges at Creative Co-Op

Have prices been raised due to new tariffs?

• No.
• Printed prices in our catalogs, on our website and in our showrooms have not increased due to tariffs

What products are affected by the new tariffs requiring a surcharge?

• All imported products are affected including these brands:
  • Creative Co-Op Home Décor
  • Creative Co-Op Seasonal
  • Bloomingville
• New tariffs on these brands range from:
  • 30%-45% new tariffs on products from China
  • 10%-45% new tariffs on products from non-China countries
  • 45% new tariffs apply to products with certain metal components from any country
  • The above %s are all new incremental tariffs to existing tariff rates that existed on 1/1/25

What products are not affected by the new tariffs?

• These brands are produced in the USA and not materially affected by the new tariffs:
  
  • Illume candles
  • Finch + Fennel giftable food
• Both brands import some raw materials which are affected by tariffs
• These raw materials are a small % of the cost of the goods
• No surcharges are being applied to Illume or Finch + Fennel branded products

When did Creative Co-Op start paying new tariffs?

• China tariffs began in February at 10%, increased to 20% in March, then 145% in April and are now at 30% under a 90-day pause        which is scheduled to end on 8/14/25
• Non-China tariffs began in April at various rates by country and are now at 10% under a 90-day pause
• 45% tariffs on certain metal products began 3/12/25
• The above %s are all new incremental tariffs to existing tariff rates that existed on 1/1/25

What happens when the 90-day pause is over?

• No one knows
• We hope for a resolution at best or at least a continuation of the pause
• Even if tariffs revert back to 145% we remain committed to supporting our retailers by importing our Seasonal
  and new products into the country in time for the important holiday season

Beyond the new tariffs are there other reasons for surcharges?

• Yes
• 145% tariffs on products from China created a new supply chain crisis
• When tariffs reached 145% the flow of goods from China stopped for more than 30 days, creating a backlog of
  container volume similar to the supply chain crisis of a few years ago after COVID
• Container pricing has already increased dramatically and will reach COVID supply chain crisis levels
• During the COVID supply chain disruption a 6.5% surcharge was necessary to offset these incremental costs

What tariff surcharges will I see on my invoice and when do they start?

• Starting: June 1, 2025
• All shipments & their invoices will have a 15% tariff surcharge applied to imported brands:
  • Creative Co-Op Home Décor
  • Creative Co-Op Seasonal
  • Bloomingville
• Tariff surcharge applies to product cost only, not freight
• Tariff surcharge will appear on each line item and be totaled at the bottom of the invoice
  • All invoices include shipments from:
  • Open Orders / Future ship date orders
  • Pre-booked Seasonal Orders
  • Backorders
  • New Orders
• Tariff surcharge is not applied to domestically produced brands:
  • Illume candles
  • Finch + Fennel giftable food

Is the tariff surcharge applied to my freight costs?

• No. Tariff surcharge applies to product cost only, not freight

Why are you using tariff surcharges vs. price increases?

• To provide flexibility, transparency and ease of removal when the situation stabilizes
• The new tariff situation has been fluid and rapidly changing
• Using surcharges allows us flexibility to address these changes while ensuring you continue to have:
  • Extensive new product introductions
  • Printed catalogs to shop from
  • Flexibility to stop using surcharges versus artificially inflating prices

Why are there tariff surcharges applied to orders placed prior to 6/1?

• We have exhausted our non-tariffed inventory; the products shipped from our warehouse after 6/1 will have
  arrived under these new tariffs
• New tariff costs started in February and have been increasing since
• Until 6/1 there were no invoice surcharges
• All available backorders have been shipped and invoiced prior to 6/1
• Our warehouses typically hold 3 months of product
  • Inventory levels are timed to our customers’ needs
  • Based on this timing we have:
    • the most inventory in January and August
    • the least inventory in April and May
• Pre-tariff buying at existing pricing dramatically increased sales beyond normal in April and May
• Today, our warehouses have the lowest levels of inventory since COVID
• The vast majority of inventory we will ship for the balance of the year is newly arriving and all subject to the new
  tariffs
• We have held off surcharges as long as possible, allowing customers to take advantage of our pre-tariff inventory
  throughout April and May

Why can’t Creative Co-Op absorb the tariff impact vs. passing it to your customers?

• These new tariff rates are an enormous increase to our cost structure and strain on our cash flow
• At a 15% tariff surcharge we are only offsetting some of the impact, not all of it
• Uncertainty around the 90-day pause and supply chain costs increases our risks
• We serve our retailers by providing them:
  • thousands of new products each year
  • healthy inventory stock levels (usually)
  • aggressive Advantage / Loyalty discount programs
  • regular and aggressive freight programs
• Without this tariff surcharge our ability to provide these services going forward would be severely limited
  particularly in new products and inventory levels
• We are taking a long-term approach that ensures our ability to continue to service you, our retailers

Are new tariff costs being marked up? Is Creative Co-Op making more money?

• No. A 15% tariff surcharge does not offset all of the new incremental tariff costs
• Creative Co-Op’s margin % and margin $s are being reduced today
• Uncertainty around the 90-day pause and supply chain costs increases our risks
  
  

Why are some other companies not charging a tariff surcharge?

There are a wide variety of reasons. Every company’s situation is unique to them.
Here are a few potential reasons:

• Domestically produced products. We are not charging a surcharge on our domestically produced brands Illume
  and Finch + Fennel
• Price increases. While we believe in the flexibility of surcharges other companies have elected to just increase
  their prices to offset new tariff costs
• On-hand inventory. Until now, we have held prices utilizing our on-hand inventory. Some companies are
  overstocked and have more pre-tariff inventory
• Lack of new products. We always have a wide range of new skus each season. New skus mean new inventory.
  Companies with less new skus and more pre-tariff inventory may have less exposure to tariffs

I pre-booked Seasonal many months ago, couldn’t you have bought my inventory before these tariffs?

• Pre-booked, 12/1 dating, orders placed in December and at the January shows are put into production in
  February and take +90 days to produce: usually starting to ship in May
• The April 2nd “reciprocal” tariff announcement occurred in the middle of production; timing could not have
  been worse for Seasonal production
• +90% of the skus in our Creative Co-Op Seasonal catalog are new every year
• To support all of these new products we aim to finish each year sold out of our Seasonal inventory and have
  very little carryover inventory each year

Since 145% tariffs have been paused why haven’t you reduced your surcharge?

• Although the 145% tariff was paused, there are still tariffs in place that range from 10% to 45%
• A 15% tariff surcharge does not offset all of the new incremental tariff costs, even at today’s rates
• Creative Co-Op’s margin % and margin $s are reduced at today’s rates
• Uncertainty around the 90-day pause and supply chain costs increases our risks

Will I receive my Seasonal (Christmas) order? Will my order be on time or late?

• Seasonal products for Christmas are all expected to arrive in time for the holiday season
• As usual retailers can expect to receive:
  • 1st Seasonal shipment in late July
  • 2nd Seasonal shipment in August
  • Final shipments in September
• Depending on the severity of the supply chain challenges shipments may be delayed by a few weeks, but in time
  for the holiday selling season
  
  

Will I receive my Fall / Halloween order? Will my order be on time or late?

• Most Fall and Halloween goods will arrive as expected and in time
• Some Fall and Halloween goods have been canceled when tariffs reached 145% the flow of goods from China as
  they would have arrived after the selling season for these holidays
• These cancellations are reflected on your orders when viewed at www.creativecoop.com

Why can’t I add to backorders? Why are you canceling backorders?

• On 6/1/25 we resumed accepting backorders
• While pre-tariff prices were held during April & May and our freight programs were extended for in-stock
  products ONLY, we did not accept backorders to ensure accuracy between pre-tariff pricing and go-forward orders
  with tariff surcharges

Is Creative Co-Op looking at alternative sourcing options to China to mitigate tariffs?

• For the past +10 years, we have diversified our supplier base away from China
• We remain committed to diversifying our sourcing and have accelerated these efforts; currently we import from
  over 12 countries worldwide
• Our teams have visited new factories in new countries as recently as this month
• While we have less imported skus from China than most vendors, there are still certain categories that can only be
  purchased from China at reasonable and competitive prices today
• We will continue to try and find replacement sources for those skus types, but this is a multiple year process and
  China will never be zero

Will Creative negotiate on the surcharge based on order size?

• Unfortunately, this is not an option. We are already sharing in over half the cost of the current tariff rate