The state of small business

Visa and Mastercard have agreed to end their longstanding “honor all cards” rule and temporarily lower interchange fees as part of a settlement agreement that could conclude 20 years of litigation over how much merchants pay the card networks and banks.

Under the proposed settlement, merchants will have the right to decline some higher-cost Visa and Mastercard-branded credit cards and will gain new rights to add surcharges for accepting some cards.

The agreement would temporarily cap posted credit interchange rates for five years, including keeping rates for standard consumer cards at 1.25% through the pact's eight-year term, starting with the court's approval. Visa and Mastercard said the settlement also would lower the “combined average effective credit interchange rate by ten basis points” for five years.

A scuttled agreement from 2024 would have reduced fee rates by seven basis points for five years.

The new settlement also calls for a $21 million “merchant education program” to inform the merchants about payment acceptance and cost management. 

“After more than 20 years of litigation, Visa and Mastercard have reached a proposed settlement with U.S. merchants of all sizes that would provide meaningful relief, more flexibility and options to control how they accept payments from their customers,” Visa said in an emailed statement.

Mastercard said the proposal will benefit smaller merchants, highlighting a critical reason that a federal judge rejected a prior settlement in June 2024. U.S. District Judge Margo Brodie ruled that that deal did not treat all merchants within the class equitably in terms of their rights to impose surcharges.

The agreement “is the best resolution for all parties, delivering the clarity, flexibility and consumer protections that were sought in this effort,” Mastercard said in a statement. “Smaller merchants will gain in this settlement – more acceptance choices, reduced costs and simplified rules.”

The National Association of Convenience Stores criticized the deal as “more smoke and mirrors” in a statement Sunday.

“This proposed settlement endorses business as usual, including by letting Visa and Mastercard increase their own fees without any restraints,” said Lyle Beckwith, the association’s senior vice president of government relations. “That could erase the benefits that this settlement pretends to provide.”

The settlement is subject to approval by Brian Cogan, a federal judge in the Eastern District of New York. Any approval would “occur most likely in late 2026 or early 2027,” Mastercard said in a securities filing.

The marathon class action began in 2005 when merchants sued Visa and Mastercard over alleged antitrust violations with respect to the interchange rates that retailers, restaurateurs and other merchants pay when they accept Visa or Mastercard credit card payments from consumers.

Retailers, including the mega chain Walmart, have been seeking alternatives for years to what they say are the high interchange cost of accepting credit cards.

Under the networks’ “honor all cards” rule, any merchant who chooses to accept a card tied to the Visa or Mastercard network must accept all cards tied to that network, regardless of which bank issued the card or how much interchange fee a card carries.

The rule has meant that a merchant couldn’t refuse a card with a pricier interchange, such as the numerous higher-fee cards that offer consumers travel or hotel loyalty program rewards. Nor could they usually add surcharges for payments with a card that carries a higher interchange cost.

The ability to impose surcharges for higher-fee cards and to decline some costly Visa and Mastercard-branded cards were two key objectives for merchants, Lloyd Constantine, a New York attorney who represents about 40 of the plaintiffs, said in a June interview.

About 30 merchants across three plaintiff groups had previously reached independent settlements, including tech giant Amazon, as well as retailers Costco Wholesale and Lowe’s. 

The Electronic Payments Coalition, which counts card networks as well as banks and credit unions among its members, supports the latest legal accord. The coalition’s CEO, Richard Hunt, noted that some financial institutions may not be happy with the agreement, given the merchants’ new leeway on which cards they can accept.

“Not everyone in the financial services industry is happy with this agreement which means it’s a good agreement,” he said in an interview.

Still, he noted that the agreement is preferable to any solution from the federal government, which has been threatened in the form of a bill known as the Credit Card Competition Act that was introduced in prior congressional sessions.

Hunt contended that a key benefit of the pact for merchants is allowing more flexibility with respect to surcharging.

Big merchant trade groups, including the National Retail Federation and the Merchant Payments Coalition, criticized the settlement as unsatisfactory.

“This is a bad deal,” said Doug Kantor, who is general counsel for the National Association of Convenience Stores as well as an executive committee member for the Merchants Payments Coalition. “It’s not much different than the deal last year that the judge threw out,” he said in an interview.

Kantor contended that many standard, non-premium cards already have interchange rates lower than the 1.25% cap. Generally, the card networks will still be able to revise their fees to offset any reductions dictated by the agreement, he said.

Overall, he argued that the banks still won’t have sufficient incentive to compete in the credit card marketplace under the new settlement. 

Visa and Mastercard faced two trials next year that would have pit the networks against three groups of merchants that had sued over the card swipe fees. The first was scheduled for April 2026 in New York, with a second trial that was set for September in Chicago by a second group, led by delivery service GrubHub.

The proposed settlement speaks to the arms race nature of a new breed of premium, costly cards from banks such as JPMorgan Chase, Capital One Financial and Citigroup that offer an array of enhanced travel and dining perks for affluent customers. Such premium cards carry higher interchange rates, pressuring merchants’ profits.

In September, American Express boosted the annual fee for its Platinum card to $895, months after Chase hiked its Visa-branded Sapphire Reserve card to $795.

Spokespeople for JPMorgan Chase, the biggest U.S. bank, and Wells Fargo declined to comment. Capital One Financial did not respond to an email seeking comment.

Walmart debuted its Grow with US initiative, which provides U.S. small businesses with training, mentorship and resources to grow in collaboration with the retail giant.

With the program, Walmart is offering participating businesses access to mentors, its Supplier Academy curriculum and financial support via its Early Payment Program and Bridge Marketplace. Small businesses will also have a chance to present their businesses at product discovery opportunities like its U.S. Open Call event, RangeMe product discovery tool or the Walmart Marketplace, according to the press release. 

Walmart will soon begin accepting applications for its annual Open Call event in October, during which small and mid-sized businesses can promote their products to Walmart and Sam’s Club merchants.

Walmart’s Grow with US program is part of its broader efforts to reach small businesses, which comprise more than 60% of its American suppliers. Ahead of its Open Call event in Bentonville, Arkansas, Walmart is hosting a series of pop-up events, where businesses can meet with Walmart buyers, receive feedback on their ideas and potentially win a pass to its October Open Call.

The company’s Grow with US is part of its small business development efforts globally, including Crece con Walmart in Mexico and Vriddhi in India. 

“Small businesses are the backbone of our communities and there are countless stories of how businesses … are finding long-term growth and success with Walmart,” John Furner, president and CEO of Walmart U.S., wrote in a blog post. “We’re excited to continue providing support for and championing the achievements of these businesses every step of the way.” 

Unlike Walmart, small businesses lack the power to negotiate with suppliers, nor can they withstand wholesale and manufacturing price increases, according to Greg Stoller, master lecturer at the Boston University Questrom School of Business.

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By Katana

Holiday 2025 is shaping up to be retail’s most unpredictable season yet. As shoppers bounce from TikTok to local stores, retailers face pressure older systems were not built to handle. Inventory is moving faster, across more channels, with less time to react. Leading brands are rebuilding the back end for speed, adopting real-time systems that connect sales, production and fulfillment so teams can act while demand is still there.

Peak Season moves faster than the systems behind it

A single product can sell on TikTok, Shopify and at a neighborhood pop-up in the same hour. That pace turns the back office into a front-line concern. Older rhythms like “plan, promote, replenish” struggle when a post can empty shelves by lunch. Systems built for fewer channels and overnight updates cannot keep inventory accurate minute by minute. Batch jobs and spreadsheets lag and even a short delay between sales and stock updates can cause missed sales or excess production.

Many retailers are moving to flexible, connected platforms instead of rigid, all-in-one tools, so when demand jumps they can respond quickly with fewer errors and faster decisions.

Where old systems slow retailers down

When sales channels and fulfillment partners sit in separate systems, teams cannot say with confidence what is in stock or already committed to orders. That uncertainty grows in peak season, when social commerce, marketplaces and stores all move at once. Small discrepancies create chain reactions: stockouts, overproduction or emergency reorders that eat into already thin margins. Even a single channel showing zero stock for a high-demand item can cost thousands in lost sales within hours during peak season.

Adobe expects U.S. online holiday sales to reach about $253.4B, up 5.3% year over year, with Cyber Week alone driving roughly 17% of the total. Spikes concentrate and reaction time shrinks. Salesforce also points to more varied journeys, with AI and social discovery adding new layers that raise the bar on connected data.

Three areas show where older stacks fall short: inventory accuracy when figures are stale, fulfillment coordination when store, warehouse and 3PL data do not align and production planning when outdated numbers drive shortages on fast movers and surplus on slow SKUs. Each breakdown costs time, margin and customer trust.

In 2025, operational accuracy tracks the speed of data. Companies working from live information adjust sooner and avoid emergency fixes; those on day-old exports spend peak season correcting errors while demand moves on.

Retailers are rebuilding their tech stack

Operations teams are reassessing the systems that carry them through their busiest weeks. The aim is to replace rigid, all-in-one setups with tools that connect easily, update continuously and fit how the business already works. A modern stack centers on live inventory and production data, connecting e-commerce, POS, accounting, shipping and 3PL and wholesale or EDI around one current record of what is on hand, what is committed, what is in production and what is in transit, by location and, when needed, by batch or lot, so every team works from the same information.

Many retailers are adopting stackable, real-time inventory platforms such as Katana to make this possible. Katana connects with the systems retailers already use and keeps data aligned through native apps, partner integrations or API. It shows what is in stock, what is being made and what is already sold across channels and locations, while working with partner tools for deeper workflows like EDI or 3PL updates. With current information in one place, planners and fulfillment teams can act as orders build or trends change.

Peak Season 2025 is retail’s biggest systems test yet

Peak season has always tested how well retail operations hold together under pressure. In 2025, that pressure takes new forms. The mix of hyper-personalized campaigns, rapid demand changes and the unpredictability of emerging platforms has turned this year’s rush into a direct test of how well systems work together.

Social commerce, including live shopping and short-form video sales, creates a real standardization challenge. New marketplaces and brand-owned channels keep order volume climbing but make operational oversight harder and fragment inventory data. Combined with shorter delivery expectations and tighter margins, even small gaps now carry clear financial impact. For many teams, the core challenge is supporting demand with connected, reliable infrastructure.

Companies managing this season well treat the rush as an operational audit with stability as the goal. They have linked sales, inventory and production so information moves at the same pace as orders. When demand jumps, they see the effect across the business and act before problems spread. Making pressure visible early keeps operations in control.

For every other business, the lesson will be clear once the rush ends. This season is showing exactly where processes falter and how much visibility the future will require. Retailers that apply those learnings, by linking systems, unifying data and aligning teams, will enter 2026 with a stronger operating base and fewer surprises.

After Lisa Lane pitched her slip-on connector product, Rinseroo, on Shark Tank this January and received the show’s “golden ticket,” she was raring to go, ready to scale and enthused about ordering her products.

Then came heightened tariffs — in February, a 10% increase on imports from China, eventually escalating to a 145% duty rate, but soon dropping to 30%. Lane imports her finished products from China, and the hiked tariffs brought her plans to a halt.

“Just to get it off the boat was like paying for a mortgage,” Lane said.

She quickly worked with her manufacturer to find ways to lower costs. One solution: a change in packaging dimensions that ended up saving 70 cents per unit for every item shipped via Amazon.

Lane’s story is emblematic of a broader trend: Business owners are taking a closer look at packaging to keep costs in check. In fact, many brands and retailers have been auditing their packaging, more so than they did during the first Trump administration. This is because today’s sweeping tariffs impact more countries, according to Michael Nass, executive vice president at Creative Retail Packaging, a packaging distributor.

In addition, packaging costs have risen, with the producer price index for paperboard boxes reaching a record high in July. Altering packaging to cut costs is often easier than changing the product manufacturing itself, Nass added.

How exactly businesses reduce their packaging costs, however, depends on the company.

Shark Tank startup: Shrinking packaging dimensions

Lane’s company makes slip-on hose connectors for showerheads and faucets, so consumers can wash their dog or clean the shower. The hose was packaged in a cardboard box measuring around 8x8x3.3 inches. Because Lane sells through Amazon, where costs are based partly on dimensional weight, the product’s packaging was in the “large standard” tier.

As tariffs were announced, Lane reached out to her vendor to see what was possible in terms of packaging size. The manufacturer sent a sample of the box with the same material and artwork, but shrunken down by an inch on the longer sides — still enough space to accommodate the product. The change qualified the box under Amazon’s “small standard” category, saving shipping costs. In addition, the smaller package used less material, which further lowered costs.

Lane described the process as collaborative, and she touted a strong relationship with her packaging supplier.

“A good manufacturer that wants your business is always willing to work with you,” Lane said. “That's the goal, to grow together.”

Beauty brand: Frontloading packaging ahead of tariff hikes

Time was a blessing and a curse for Naomi Hung, co-founder of Mochidream, a skincare brand for tweens. The company manufactures and fills in the U.S. but imports packaging from overseas, including boxes from Canada.

Hung placed an order for boxes, the order got delayed, and at that same time, the Trump administration announced tariffs on Canadian imports. She asked her supplier to further delay the shipment while the business figured out what to do.

Within days, the administration paused the tariffs on Canada, and the founders called their box supplier “the second we heard the announcement,” Hung said. “We said, ‘ship everything.’” 

Now, Mochidream has packaging inventory to last through the year. But once this year’s inventory runs out, Hung isn’t sure yet what she’ll do going forward. “We are kind of in wait-and-see mode in terms of what to do for the next batch order.”

Negotiating with suppliers is one possibility, but Hung noted it’s difficult for small businesses and emerging brands that can’t always meet minimum order quantities.

Retailer: Changing packaging type and supplier

It’s not just U.S.-based businesses contending with tariff changes. Katie Jones owns a U.K.-based store that sells homewares, handmade jewelry, stationery and other products. 

Even though Jones wasn’t directly caught in the U.S trade war like her American counterparts, the global nature of supply chains led to higher costs worldwide as materials flowed across borders, and tariffs indirectly raised costs for her suppliers.

Case in point: Jones was importing kraft boxes from China to the U.K. at $1.20 each. Post-tariffs, the cost shot up to $1.75 per box – or $1,100 in packaging costs on a single delivery.

“In the case of a small retail business such as mine, that was too much of a margin to give up,” said Jones, who owns the Squirrel A Store of Buried Treasure shop in Ulverston.

She switched from kraft boxes to plain corrugated boxes from a U.S.-based supplier, bringing costs down to 85 cents per box. For an additional 10 cents, she adds her own branded tissues and “an uncomplicated sticker.”

The changeover, however, wasn’t easy. 

“It seemed like attempting to find a needle in a haystack to find someone locally who would be able to fulfill small and large order quantities,” Jones said.

She spent hours emailing prospective suppliers, reviewing samples, comparing costs, and considering factors like durability and print quality, and it took three months to change suppliers. She also had to change her minimum order quantity and alter storage space, because the new supplier’s cartons were slightly larger than the previous supplier’s.

In the end, Jones said the hassle was worth the savings, and the new packaging highlights what’s important to her business: the product inside.

Tariffs: Just one piece of the packaging puzzle

As companies mull potential packaging changes, tariffs are just “a part of the equation” that also factors in total cost, functionality and sustainability, Nass said. 

“You have to consider your brand image,” Nass said. “Your packaging is part of your clients’ experience.”

The packaging experience was critically important to Mochidream’s Hung, and it’s a big reason she’s not looking to redesign due to tariffs. In the development stage, she and her co-founder spent a lot of time designing packaging that would appeal to their demographic. They created a custom color, selected a heavyweight plastic bottle for a premium feel, and chose plastic droppers, rather than glass ones, to make sure the product packaging was safe for young consumers.

Lane, too, wanted to ensure her smaller boxes didn’t lead to product problems, such as creating a kink in the hose. She also wanted to make sure the smaller packaging didn’t change the perceived quality.

“It still had the same vibe to it, without diminishing the value,” Lane said. “We were happy.”

Tariff mitigation strategies often center on raising prices — but “people will only pay so much for a product,” Lane said — or shifting supply chains to the U.S. to eliminate tariffs, which Nass said can be difficult due to capacity constraints. 

Hung said when searching for a dropper for her serum product, “it was almost impossible to find” a packaging supplier that made them from plastic. She eventually found a supplier in Taiwan.

As long as the tariff situation feels fluid, many companies aren’t willing to commit to resource-intensive shifts if there’s a possibility the duties will change again. Hung sees projection and planning as the hardest aspect. When she initially was developing her product, she assessed costs and suppliers based on the tariffs in place at the time under the Biden administration.

Nass agreed that uncertainty around tariffs makes it challenging for businesses to decide on their next move.

“There's always that concern that you make a shift, and then what's going to happen a year from now?” Nass said.

From the rise and fall of the COVID-19 pandemic to ballooning inflation and interest rates, difficult economic conditions have forced many small convienence store operators to sell to competitors that are seeking more scale. 

Large c-store companies have pricing power and economies of scale that make it easier to weather turbulent economic times, while their juggernaut marketing programs boost brand awareness even outside their main areas of operation. 

These brands are moving into more and more communities, and their strategic initiatives — like expanding foodservice programs or testing retail media networks — dominate the industry conversation. 

All of which can leave small-scale operators wondering how they can stay competitive.

Part of the challenge, said Mike Lawshe, founder of c-store design and consulting firm Paragon Solutions, is being able to look beyond the big chains’ playbooks to define success and set strategy.

“The thing that drives me a little crazy is when we have customers come in and say, ‘I want to build a [QuikTrip], a Buc-ee's,” said Mike Lawshe. “Well, you can't. You're in a different game.”

Even if a retailer doesn’t have the scale of a large regional chain, there are a few things they can do to keep their business standing strong even among the industry giants. 

Solve problems, find niches

Relying on smokes and Cokes is no longer going to be enough, experts pointed out.

“The Coca Cola they're buying is the exact same Coca Cola in every single c-store,” said Kevin Farley, chief client officer for c-store consultancy W. Capra. “You have to change what you offer outside of this traditional c-store offering for them to come into your store.”

Many small and mid-size c-store chains are adding proprietary QSRs or building bigger stores that offer prepared foods in a broader effort to compete with restaurants. Before then, there have been significant changes like the reduction of service centers or the move toward food-focused stores that aim to compete with QSRs.

These changes have left a vacuum in the industry, said Lawshe, creating space for “someone with a little creativity, someone wanting to change the industry” to step in and cater to these needs.

Small operators could test the waters with new, efficient technology, like Family Express has done with its recently launched mobile app and AI-fueled management software. Or maybe small retailers want to address the lack of third spaces with a welcoming new design, like The Rusty Lantern. They could even try opening in nontraditional locations like sports and music arenas, a tactic GoMart and Wally’s have tested. 

Even within areas like fresh foodservice, which is growing more commonplace in convenience retail, there are ways to iterate and stand out. This could mean partnering with local restaurants, the way Gas N Wash has, or developing a proprietary program like Gastro High Octane Eats at Schmitz Sunoco. 

“Who's going to challenge the norm?” Lawshe said. “Who's going to bring technology? Who's going to have the best solution?”

Building the brand

Small retailers also need to improve their brand strategy to connect with customers. 

There are many ways for retailers to tell their story. They can promote their history or their mission and share their values with customers — something that’s especially important for younger shoppers. 

“This generation is very brand aware and very brand loyal,” said Austin Burns, president and CEO of Paragon Solutions. “And there's a really good opportunity out there for these retailers to grab onto.”

This can look like Buc-ee’s, where the company mascot is plastered everywhere and its fans make trips just to visit its stores. Or it can look like Rutter’s, which often promotes its 270-year history in its home state of Pennsylvania and ties its roots as a dairy into the marketing of products like milk and egg nog.

However, if a chain is hoping to get acquired, building a strong identity could work against it.

Art Sebastian pointed to TXB as an example. While the chain is in a good position — well known and well loved — if it did want to sell, it might have a difficult time. 

“The way they've built a brand, it would be hard for a big player to acquire them and just weave them into their system,” said Sebastian, CEO of c-store advisory firm NextChapter. “Casey’s just can't take that chain and slap pizza in there, right?”

Experts emphasized retailers need to figure out what their value is to the shopper and how to connect. Differentiating their offering and experience from the big players to the point where people are talking about it among friends and on social media has become a valuable commodity. 

“You have a real opportunity now,” said Burns. “Your brand is more valuable than the real estate.”

Know when it’s time to cut losses

C-stores should look for ways to update their stores in order to keep them competitive — but they should also know when the extra investment just isn’t worth it, experts say.

If a store is underperforming and the owner can’t or won’t invest back into it, ownership should ask themselves if the site is still worth running. There’s a lot of data out there that can help retailers make the decision, Burns noted. 

With larger companies expanding their reach and some smaller companies innovating to change the game, it could just hasten the decline of aging locations that don’t get updated.

“We see it all the time, whether it's a Buc-ee’s or [QuikTrip] or RaceTrac, going up against legacy stores across the street,” said Lawshe. “And those legacy stores, they just go in the tank.”

Small businesses using AI say the technology hasn’t lived up to expectations, according to an American Express survey of 1,000-plus U.S.-based decision-makers at small businesses.

Among the 56% of businesses using AI, more than two-thirds expected the technology to make a bigger impact on their business than it has. Around 1 in 2 decision-makers said they thought their business used AI prematurely, and nearly all admit to still figuring out how to use the technology effectively.

AI adopters, however, have already seen some benefits. Nearly half of small businesses have experienced reduced error rates, operational efficiencies, employee productivity boosts and increased sales. 

Technical chops are ubiquitous among small businesses, which have had to deal with many of the same challenges as large enterprises, including threats to operations from cybersecurity incidents and the need to unlock efficiencies. 

Most small business executives entered the year with digital transformation on the brain and AI on their radar. Around half of small businesses said they are planning to add more AI applications in 2025, according to a JPMorgan Chase report published in January. 

Technology that can help companies save time, like AI, is alluring, especially for smaller operations. 

Still, small businesses have concerns around AI, tied to data security, tool costs and how time-consuming employee training can be, according to the American Express survey. 

“As these small businesses look to the future, they anticipate that the next five years will be defined by building a strong financial footing and modernizing their technology,” Ro Gutierrez, SVP and head of small business products at American Express, said in a recent blog post.

In an age where digitization dominates almost every aspect of life, selling pens and paper might seem like a thing of the past.

However, physical methods of communicating aren’t entirely obsolete. The world of stationery continues to exist despite some bigger names in the industry — such as Papyrus and Paper Source — closing some stores or filing for bankruptcy. 

But plenty of small retailers are dedicated to selling something that even artificial intelligence can’t quite mimic: the joy of physical stationery.

This specialized space goes beyond the printer paper or standard back-to-school binders customers might purchase at a big-box store. Nowadays, the product category can encompass a variety of items in the office or desk supplies world, from customized greeting cards your grandmother has to high-quality paper types and pens from Japan. Many countries outside the U.S., such as Germany and Japan, have highly sought-after stationery products. 

Colorful washi tapes, customized day planners, quirky sticky note pads and more are sold to customers who seem dedicated to keeping analog forms of communication and writing a thing of the present. Cashing in on this trend are a variety of independent founders across the country who share a passion for the craft.

The big names

Some of the well-known retailers and brands in the specialty stationery space have included Paper Source, Papier and Papyrus, though many have endured challenges in recent years. 

Papyrus shuttered all of its U.S. stores in 2020, with company leadership citing the “current challenges of the retail industry” at the time. The company still maintains an e-commerce site and also lists retailers such as Target, Kroger, and Albertsons Companies on its retail locations webpage.   

Additionally, Paper Source filed for Chapter 11 bankruptcy in 2021. Originally founded by Susan Lindstrom in 1983, Paper Source was acquired by Barnes & Noble owner Elliott Investment Management through bankruptcy. Paper Source still operates its own retail stores, per its store locator webpage, in addition to selling through Barnes & Noble. 

More recently, parent company Barnes & Noble filed a Worker Adjustment and Retraining Notification with the state of Illinois in January for the permanent closure of a distribution center, impacting 107 employees.

In a statement to Retail Dive, Paper Source said they had worked in the space for ten years. 

“Sadly the lease of the building comes to an end at the start of next year,” the stationery brand said via email. “As a retailer whose business is especially concentrated into the Holiday period, we have to make the move in the summer to be able to meet the seasonality of the year-end.”

Reliance on holiday gifting occasions may be a core vulnerability for some of the larger legacy brands in the stationery space, according to emailed commentary from Devadas Pattathil, CEO of inventory management company OnePint.ai.

“In contrast, indie shops have leaned into hyper-personalization, community engagement, and unique curation,” Pattathil said. “They foster direct relationships with customers through workshops, limited-edition collaborations, and locally sourced products."

Meanwhile, the London-based stationery brand Papier in 2023 marked its first U.S. wholesale partnership through a deal with Anthropologie. 

“DTC remains the majority of our sales and traffic but we’ve seen wholesale grow rapidly over the past few years since we launched it, and it is now a meaningful part of our business that we’re excited to grow further,” Papier founder and CEO Taymoor Atighetchi said in emailed responses to Retail Dive.

The brand’s planners and diaries are among its best sellers, per Atighetchi. Papier is also seeing success with recipe journals and photobooks. Despite being founded in the United Kingdom, the brand said the majority of the company’s customers are based in the U.S.

“We have built a brand that resonates with the modern consumer and how they think about analog in an increasingly digital world,” Papier said. “We know that there’s a growing desire to ‘switch off’ from screen time and digital distractions - Papier’s products offer offline experiences that are both beautiful and tactile.”

Despite challenges in the niche market, some smaller stationery brands and retailers in the U.S. are thriving, capitalizing on consumer trends promoting self-expression and wellness. Some are even trying to bring a more positive reputation to American-manufactured products in an industry dominated by international brands.

Small business, big growth

“It just continued to grow and grow,” Amy Rutherford said of the stationery offerings she was selling at her store Red Barn Mercantile in Alexandria, Virginia. That growth led her to open another shop in the area called Penny Post, which is dedicated to this product category and has distinct branding from her other ventures.

Rutherford noted that some customer interest in stationery, like with journaling, seems to be tied to mental health practices — taking time to reflect away from screens — and a form of self-expression, as many of the stationery brands she sells create visually unique, sometimes even political, goods.

California-based stationery brand and retailer Shorthand has also found a way to operate more than one store in the same city without cannibalizing sales. Founder and owner Rosanna Kvernmo in an interview with Retail Dive said she is even exploring opening a third location.

Kvernmo began working in stationery in college by creating a small greeting card line. Shorthand, the company that has since developed, has created a larger product line — its most popular product being a notebook. Now, Shorthand also sells products from other brands that make pens, envelopes and more. 

The store experience seems central to the stationery world, according to Kvernmo, which is filled with customers who care about how a paper type feels and how a pen performs. There is an active print shop within one of Shorthand’s locations allowing customers to see products being made, and Kvernmo even keeps the Shorthand email signup old school — there’s a pen and paper in store for customers to write down their contact information.

“The internet can be so overwhelming for shopping and when you go into a store … it's like three versions of the same thing and they've already been vetted for quality ostensibly,” Kvernmo said of the ability to finely curate selections in-person so customers aren’t paralyzed by choice. 

The presence of stationery in the U.S. may not be new, but several business owners for this story noted that some countries — particularly Japan — have had a long-standing stationery fandom. 

“In both Germany and Japan, there has been a concerted effort to preserve domestic manufacturing,” St. Louis Art Supply Product Director Carson Monetti told Retail Dive via email. “These are historically export economies and there is a broad consensus around building the capacity to make things well. Governments and businesses have worked together for generations to refine industrial processes, train workers, and build out complex supply chains. We have not done that work in the U.S., so we've lost the expertise.”

Many small stores in the U.S. will seek out specific products to retail from these countries, but even still it is sometimes hard to find a wide range of stationery specifications in the U.S. without going abroad. Quality is particularly high with stationery products made in Japan, Monetti added.

“There is a ton of local competition, which keeps prices low,” Monetti said. “Japanese consumers use way more of these products than we do, and they are much more discerning about pens and paper. All of this adds up to an environment where the stationery giants are still rolling out new products every season, setting and following trends, and trying to outdo one another. It's really refreshing for an American merchant because so many of our domestic brands are in suspended animation.”

The introduction of tariffs announced by President Donald Trump on Wednesday could present issues for many stationery companies in the U.S. — and not just for those who import finished products. 

“There are no U.S. alternatives to many of the products we source overseas, so we will have to pass on the price increases to customers,” Monetti said. “We are also a small American manufacturer — we make watercolors and inks here in St. Louis under our Federal Color brand. Even that part of our business will have to raise prices if the tariffs are implemented, because the packaging and raw materials come from all over the world.”

When Suann Song — a graphic designer by trade — created the stationery brand Appointed through a Kickstarter, she set out to create the perfect notebook — one manufactured in the U.S. with the type of quality consumers find abroad. She saw a need in the market for gender-neutral, timeless stationery that seemed harder to get in the U.S.

About a decade later, the company’s top seller is still that notebook, though the brand’s offerings have expanded greatly since. Appointed operated a Washington, D.C., store for many years until just this February, when the brand shuttered the location (which served as an all-in-one design studio, office, retail and manufacturing space) to instead increase its production capacity with a new facility in New York state.

The move has been about a year in the making, Song told Retail Dive, and will allow for more frequent product releases and restocks.

Maintaining Made in America requirements hasn’t always been easy, but Song has been dedicated to meeting its required standards since the Appointed brand was founded.

“It was almost more from a practical standpoint,” Song told Retail Dive. “I could quality control, I could do smaller runs. You could have faster turnaround when you're sourcing stateside.”

However, sometimes this has meant working harder to create certain products. Another popular product from Appointed is the brand’s task planner, which is released annually with tabs for every month. Song said that the company’s employees used to arduously collate the pages all by hand. 

“If you really look at the planner market, there's very few or no planners in the U.S. made with tabs just because the machinery to make them is pretty extensive,” she noted. 

Thankfully, Song was able to find a small company in Oregon that made a limited number of machines each year that could meet the specifications Appointed needed to make this process more efficient. 

“I took a small business loan out for that. It was like a $50,000 purchase,” Song said. “And that changed everything for us … When someone gets a good planner, they habitually will buy it and then they'll tell their friends about it, so that's nice because you just see the organic growth year after year.”

Cookie-cutter manufacturer Ann Clark credits its U.S.-centric supply chain and manufacturing operation for the negligible impact tariffs have had on its business.

The company buys its primary raw material, tin-plated steel, from Maryland-based processor Titan Steel, which gets the metal from U.S. Steel, CEO Ben Clark told sister publication Supply Chain Dive. Ann Clark also uses U.S. suppliers for the raw materials in its secondary product lines, including icing, food coloring, and pancake, waffle and baking mixes.

Nearly everything the company produces is made at its headquarters and manufacturing facility in Rutland, Vermont, Clark said. The only exception is parchment paper, which the company imports from a supplier in France.

At-home cookie bakers account for most of Ann Clark's $10 million to $15 million in annual revenue, said Clark, the son of founders Ann and John Clark. The company employs roughly 35 people and sells from 4 million to 5 million cookie cutters annually.

A long-term bet pays off

The U.S. Chamber of Commerce estimates that small business importers face a $202 billion annual tariff hit from the levies imposed by President Donald Trump on many of the nation's trading partners. Yet, the duties have had such a small impact on Ann Clark that the company doesn't measure it, Clark said. 

He credits the levy avoidance to his decision to transition from third-party production to in-house manufacturing in 1998, which gave him control over production and suppliers.

"All my friends would say, ‘Why don't you just buy from China?’ And I said, ‘No, we want to make them ourselves,’" Clark said. "I like making things, so over the years, we figured out how to make cookie cutters quickly and efficiently."

In-house manufacturing brings quality control while also eliminating long lead times and large amounts of inventory, Clark said. 

"Cookie cutters are inexpensive enough that we can't put them on an airplane from China, you follow what I mean," Clark said. "If you're out, you've got to wait for the boat to get them here."

Refining production

When it first began producing in-house, Ann Clark's manufacturing gear was crude, so it refined its operations to eventually match the speed and price of importing goods made in countries such as China, Clark said.

While honing the production process, Clark studied lean manufacturing, a systematic approach that focuses on streamlining processes and eliminating non-essential activities. Based on his studies, Clark reduced his inventory by 55%, keeping just enough cookie cutters to meet normal demand, or making lots of 300 for each of the company's 700 shapes. 

At the same time, Clark's operation has the flexibility to fill a sudden big customer order by dedicating the first available machine to the unexpected run. 

"I don't care what the shapes are — we have it down," Clark said. "We can just change that quickly."

For example, one of Ann Clark's largest customers, kitchenware retailer Sur La Table, called one February because it had forgotten to order shamrock cookie cutters for St. Patrick's Day on March 17, Clark said. His company filled the order for 2,600 shamrock shapes that night before shipping after Sur La Table completed the order paperwork. 

"We could actually make the product faster than they could process the order through their system," Clark said, noting that the order was filled in about seven hours and did not require overtime work.

That level of customer service is important to the gift shops, baking supply stores and boutique kitchenware stores that comprise most of Ann Clark's customer base, Clark said. The company also sells its products on its website and through Amazon.

Sticking with steel

Ann Clark's cookie cutters are more expensive than competing products, particularly those imported from overseas, but the company has managed to hold on to an estimated 65% to 70% share of the U.S. market by emphasizing quality, Clark said. 

For example, Ann Clark has stuck with steel cookie cutters rather than the plastic used by some competitors because the metal is sturdier and cuts clean edges, ideal for sharp, detailed shapes, Clark said. 

Making nearly everything yourself is not easy, Clark said. For example, sometimes it requires driving long distances to tour another manufacturer to learn new processes. 

“It's more difficult to make it yourself, but now we have a supply,” Clark said. “If the sales of a particular product take off, we make it. We're controlling our destiny.”

A growing majority of small business owners are concerned about the impact that artificial intelligence regulation could have on their organization.

Nearly two-thirds (65%) of respondents were worried about compliance and litigation costs that could result from being subject to different state laws on privacy, AI and technology, an increase of 14 percentage points compared with a 2024 poll, according to a survey by the U.S. Chamber of Commerce.

“This year we've found the highest level of concern amongst small business with a patchwork of state laws that could inhibit adoption and growth,” Jordan Crenshaw, senior vice president of the Chamber’s Technology Engagement Center, said in a statement. “That’s why policymakers need to establish a single national framework that allows these businesses to thrive, instead of stifling their success.”

Many states are proposing or implementing regulations that would require businesses to disclose their AI use to customers, implement AI risk assessments, explain to customers how AI could affect customer interactions, and provide human oversight of systems that make consequential decisions, according to the report. Fewer than one in three respondents said they were well prepared to comply with such obligations.

Among other recommendations, the report called for a national AI framework that preempts comprehensive state AI laws, “while preserving the ability of state attorneys general to enforce technology neutral laws that ... address specific harms like consumer protection, privacy, and discrimination laws where appropriate.”

The findings come as the Trump administration is threatening to withhold federal AI funding from states with burdensome rules on the technology.

An AI action plan unveiled by the White House calls on the Office of Management and Budget to work with federal agencies that have AI-related discretionary funding programs to ensure they consider a state’s AI regulatory climate when making funding decisions.

“The Federal government should not allow AI-related Federal funding to be directed toward states with burdensome AI regulations that waste these funds, but should also not interfere with states’ rights to pass prudent laws that are not unduly restrictive to innovation,” the document states.

Meanwhile, President Donald Trump has gone further than his own plan, calling for a federal AI standard that “supersedes all states.” 

As of June 27, a total of 260 state measures related to AI were introduced in the 2025 legislative session, of which 22 have been passed, according to an analysis by the Brookings Institution.

A Colorado AI statute passed in 2024 and set to go into effect next year stands out for its breadth and comprehensiveness, analysts say. Other states with AI statutes include New York, Texas and California.

“There is a storm cloud over this progress at the federal level, and it is unclear how this will affect how states are addressing AI,” the Brookings report said.