Hi everyone, Rennie Araucto here—CEO of Zombie Orpheus Entertainment. I wanted to take a moment to talk candidly about something that’s been affecting not just us, but creators and small publishers across the board: tariffs. With JourneyQuest Season 4 and other projects moving forward, it’s important to pull back the curtain a bit and share how these economic shifts are impacting crowdfunding campaigns like ours.

1. What is a Tariff?

• A tariff is a tax on imports.
• It’s a fee paid for taking possession of an item, defined by the country where the importer resides.
• Tariffs are assessed at a category and sub-category level, much like taxes.

Example:

• In California, if I buy a banana, I don’t pay sales tax.
• If I buy deli meat, I do.
• Tariffs work the same way: if I take possession of the item, I pay the tariff.

Important note: Tariffs are paid by the importer (the person receiving the goods), NOT the foreign entity shipping them.

2. How This Affects Crowdfunding Campaigns (like JourneyQuest Season 4)

Crowdfunding campaigns often offer physical merchandise as rewards. Tariffs can drastically affect how those rewards are priced, produced, and delivered.

3. Planning for Physical Goods in a Campaign

When offering physical products:

• I need to know the wholesale cost of the goods.
• For example, let’s say I’m designing a board game.

Costs Involved:

• I pay hard costs like dies and setup fees for manufacturing.
• Then I pay for the actual merchandise.
• In most cases, the more I order, the cheaper the per-unit cost.

Example Cost Breakdown:

I have a board game and the setup cost: $5,000

• For 100 units:
  • Each unit = $90 → I’d have to charge $180 retail → Not viable.
• For 500 units:
  • Each unit = $40 wholesale → I can charge $80 retail and make some revenue.
  • (Note: This isn’t a keystone margin; I’d need to charge $92.80 for that.)

4. The Impact of Tariffs at Each Phase

Phase 1: Unit Cost Disruption

• I built my campaign around a $40/unit cost.
• Backers pledged $80 per game.
• I paid $20,000 for 500 units.

Now, suppose a 110% tariff is imposed:

• I must pay an additional $22,000.
• My new per-unit cost is $84.
• But I’m only charging $80 per unit, meaning I’m losing money.

Real-world impact:

• Retailers importing millions in goods (e.g., wine importers) face 40% tariffs, which could mean $400,000 in unexpected fees.
• If I don’t have $22,000 available to cover the tariff, I might be forced to file for bankruptcy.
• Tariffs can wipe out all potential revenue from merchandise.

Phase 2: Manufacturing Costs Increase

• U.S. manufacturers rely on imported raw materials like metal, wood, and chemicals.
• Tariffs raise the cost of those materials.
• Even if I manufacture domestically, I may still import components (like wooden meeples).
• Those costs will double, and are passed on to me, and then to you (the consumer).

Phase 3: Shipping Costs Increase

• As fewer people import (due to higher tariffs), the cost to move goods rises.
• These increased costs affect:
  • Wholesale pricing
  • Final consumer shipping costs (UPS/USPS/FedEx)

This creates a double impact:

• I adjust my prices to reflect higher shipping costs.
• You also pay more to get the goods delivered to your door.

5. Why This is a Problem for Crowdfunding

• Crowdfunding campaigns rely on predictable Cost-of-Goods.
• We plan based on conversations with vendors and past market conditions.
• We build in contingency costs based on historical shipping/tariff trends.

BUT — sudden, chaotic tariff hikes disrupt everything: importers, retailers, manufacturers

Conclusion:

All the conversations I’ve had with fellow crowdfunders, manufacturers, and retailers say the same thing:

This isn’t good. It’s BAD. VERY, VERY bad.

All that being said, we at ZOE are hard at work navigating these shifting conditions and doing everything we can to get your crowdfunding rewards into your hands as smoothly and swiftly as possible. We remain committed to transparency with our community—if a major change or delay arises that could affect your rewards, you’ll hear it from us first.

We’re in this together, and with your continued support, we believe we can weather these challenges and come out stronger on the other side. Thank you for standing with us.