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Stephen Pastor, the founder of Kings of Neon, had a moment this week when he pushed back on claims by a US “sales executive” that small companies such as his are capitalising on the new tariff regime to jack up prices.
But Pastor wasn’t taking the criticism lying down, posting on LinkedIn that manufacturing in China was “not shady” but “standard practice” for even the biggest of global brands.
While NSW Central Coast-based Kings of Neon, the producer of customisable LED neon signage, has grown to source about half of its revenue from the US market, Pastor points out that manufacturing in the US is still likely to make some of his products more expensive than tariffed goods produced in China.
That doesn’t mean Pastor is against a production base in the US where he is currently working with a local company to produce Kings of Neon signs.
But with the average production in the US factory sitting at three signs a day per employee compared with 15 in China, the economics are challenging.
“It’s complicated, but its business, so we have to take it on the chin and find a solution,” Pastor, who is currently in Las Vegas, tells Business News Australia.
“But whenever I see chaos, I also see opportunity in these moments by looking where others aren’t.”
Founded in 2020, Kings of Neon has grown rapidly in recent years and in 2024 achieved year-on-year growth of almost 50 per cent through its business model that is shaking up the neon sign market via an e-commerce B2B strategy that prioritises customer service.
The US has played a big role in its growth trajectory, starting with Kings of Neon’s first customer, Twitter (Now 'X'), to the likes of Janet Jackson, Blink 182, Sonic the Hedgehog, Cannes, and Red Bull, as well as a partnership that provides signs for all racing teams for the F1 in Las Vegas.
“We stand out in the signage world based on the speed and execution of service,” says Pastor, who featured in the 2025 Australia's Top 100 Young Entrepreneurs list.
“Our industry as a whole is quite a slow and dated industry. Where timelines of three to eight weeks have been universally accepted, we’ve brought timelines down to between four and 10 days for a full custom turnaround.
“We’ve also brought technology and e-commerce into play into the customer signage game, mixed with customer service – which is quite rare in e-commerce.
“We have an extensive sales pipeline and where we’ve succeeded is by winning a lot of existing clients who haven’t been serviced long term.”
The new US tariff regime looks likely to change that dynamic, but Pastor also sees many positives emerging from the challenge.
“Because we are a global business we have flexibility; we can move working teams into lower tariff countries,” he says.
“We can push a lot of our marketing spend into Canada or in the UK if need be. We can be quite flexible, so we won’t be greatly impacted, especially for our existing customers. We don’t want to hit them with huge price increases.”
Pastor’s confidence is partially due to a belief that the 145 per cent tariff rate on Chinese goods into the US is not sustainable. US President Donald Trump has already indicated that this rate is likely to be lowered substantially.
“It’s pretty dire for a lot of business but for us we are just looking for a way around it,” he says.
With average sales of US$600 to US$800, Kings of Neon is avoiding current tariffs due to the De Minimis Tax Exemption loophole for products worth less than US$800 per person, per day. This is about to change on 2 May 2025, when all goods at any price will be hit by the tariffs in place.
“Typically, for a manufacturer it works on the raw product so that’s where the likes of Temu get hit pretty hard,” says Pastor, noting that the Chinese shopping app halted its Google Shopping ads last week.
“When there’s shifts in industries there’s big opportunity for the ones willing to do the work.
“Temu was one of the largest Google advertising competitors on neon signs against us. Looking at this as an opportunity, we have literally tens of millions of dollars (in advertising) being redirected somewhere else. So, there are going to be opportunities and wins in the dark. It’s just a matter of finding them.”
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Pastor also sees the industry shake-up helping to strip the market of “low-level fraud”.
“My industry as a whole has a lot of sharks and unfortunately that’s how we win some business. It’s also how we lose business because there are a lot of companies that put up fake Google reviews that say they’re from Australia, but they’re not.
“I do believe that in the US and Australia this will kill their market and lead to better quality brands while the industry as a whole is going to come out of the back end of that - so I’m excited for that as well.”
But in the meantime, Pastor has gone to the US to shore up the defences for Kings of Neon as the tariff situation plays out.
“Logistically it’s a nightmare because FedEx and DHL process the custom fees themselves, so if you bring something in at the moment over US$800 they have to go through Customs and processing, and that can require contacting the customer as well, so they have to hold it in a facility until they get clearance or payment for those fees,” he says.
“We are of the opinion that the current tariff is going to drop. But, for now, we are looking at different models, including our US manufacturing to see if they can up their game.
“I’m in the US now partly on the back of this news and also for the business in general, just to shore up those lanes and put a contingency plan in place.”
In his LinkedIn post this week, responding to claims that Kings of Neon was jacking up prices tenfold, a claim that Pastor says is false, the young entrepreneur put the challenges of manufacturing outside of China into perspective.
“We’ve spent years sourcing the highest quality materials and manufacturing partners to ensure our customers get the best product possible every time,” he says.
“We do manufacture in the US, too. We’ve tried to support local and last year we went all in.
“But the reality? The standards often don’t stack up, the quality is inconsistent, the timelines blow out, and the cost is higher, with a worse result.”
Pastor says partnering with efficient manufacturers is essential for the Kings of Neon business model, which has built a reputation on quick turnarounds.
“That’s not about cutting corners. That’s about keeping promises.”
Pastor is also out to crush misconceptions about Chinese manufacturing which he says still carry connotations in Western societies of being driven by forced labour.
“The Chinese workers live really well, the culture is beautiful, they are happy with their leadership and they are not under a thumb,” he says, adding that the Chinese have spent the past 15 to 20 years advancing manufacturing through technological advancement.
“It’s fine to bring manufacturing back to the US in time, but we had competitors in Australia that went into receivership through local manufacturing. It literally bankrupted them.
“Then there are the efficiencies, the additional costs and the red tape – but mainly it was worth ethic.
“Our products are hand-made and I’ve been to the factories. The Chinese have a lot better work ethic than western culture, they have as much time off, they are quite well looked after but it’s just the workmanship and the set-up that is a lot better.
“So here’s what I’m saying no to: no to racing to the bottom just to win on price; no to underpaying staff to protect someone else’s margin; no to staying small just to avoid judgement.
“We’re building a global brand at Kings of Neon with global standards. The same way the big guys did. Just without the PR team and billion-dollar buffer.”
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