It’s looking like tariffs are a certainty now. It’s not a matter of if, but when. While prices on Amazon haven’t seen a significant increase yet, businesses are struggling to see a way forward without increasing their prices.
One of our clients, a high-volume Amazon seller who built their brand around importing over 500 SKUs of plastic glasses from China, recently saw their entire business model collapse nearly overnight. Years of optimization, product-market fit, and operational efficiency—all undone by one dramatic tariff hike.
What do you do when your unit economics gets shattered by something entirely out of your control?
You adapt. Quickly.
At Trellis, we work with eCommerce brands navigating supply chain shocks, margin pressure, and the complexity of multichannel selling. Here's our playbook for not only surviving tariff volatility—but using it as a strategic advantage.
Adapting to Volatility
1. Diversify Your Supply Chain
The days of relying on one factory—or even one country—are over. Geographic overconcentration is no longer just a risk; it’s a liability. The eCommerce brands to come out of this volatility will be the ones who have found a contingency plan (or four).
Here’s how smart sellers are adapting:
- Map your entire supply chain to the component level. Knowing where your packaging, hardware, and raw materials originate is just as important as your final assembly location.
- Identify and develop alternate suppliers in at least three countries. Vietnam, India, and Mexico continue to rise as strategic manufacturing hubs. Each has unique strengths: Vietnam for textiles and lightweight goods, India for engineered products, and Mexico for just-in-time proximity.
- Monitor tariff exposure by product and region. Your supply chain isn't static—neither are tariff policies. Build in a regular review cycle to reassess vulnerability.
Brands that adapt with flexibility can shift sourcing in weeks—not months. However, proceed with caution and choose a country or supplier who will benefit your business. Don’t just go with the first one you speak to. This shift is helping you stay competitive in the long run.
2. Rethink Your Pricing Strategy
If your landed cost just went up 30% (or 145% as some sellers have brought up in popular Reddit forums), your current pricing model is already outdated.
Simply raising your price to reflect the changes to your cost won’t work either as it’s unproven if the market will continue to purchase at the increased cost. Would you buy plastic cups for $37 when they cost you just $25 last week?
Successful brands and sellers will be those who employ a refreshed eCommerce pricing strategy, like dynamic pricing.
- Run price elasticity tests every week. Use A/B testing on Amazon or your DTC site to gauge where the sales curve breaks. You might be surprised how tolerant certain segments are to slight increases.
- Bundle strategically. Pair high-tariff items with low-tariff or domestically sourced goods to blend margin impact while boosting average order value.
- Use incremental pricing increases. Raise prices in 5% steps instead of making one large jump. This helps you stay under the radar of Amazon’s pricing algorithms and minimizes customer churn.
💡Pro Tip: You can also use Trellis’ Google Chrome Extension to see pricing history and your estimated best price for your product (or your competitor’s).
3. Manage Cash Flow Proactively
Tariffs squeeze gross margins. That means your cash flow gets hit—fast and hard. Don’t panic and take out an eCommerce loan or line of credit that you don’t need.
Be proactive, finding more sustainable ways to manage your cash flow:
- Negotiate extended payment terms with your suppliers. Many will agree to net 60 or net 90, especially if you’ve built a solid relationship and predictable order volume.
- Set up a tariff emergency fund. Start small if you must, but target 15–20% of your COGS as a buffer. It buys you time in a crisis.
If you believe you’ll need additional, external cash flow . . .
- Secure credit lines now—not after you need them. Even if you don’t draw the funds now, find a lending partner you trust and keep them on standby.
4. Get Smart with Data
These economic changes are significant enough (an understatement) that owners and operators cannot stick their heads in the sand. It’s time to get on top of your data and prioritize the metrics that matter most.
Not sure where to start?
- Segment your P&L by country of origin. Know exactly how much margin exposure each region contributes—or drains.
- Track Buy Box performance by product origin. You might find patterns. Are domestic items winning more consistently? Is one region dragging down your conversion rate?
- Test positioning or USP. In some markets, “Made in the USA” or “Assembled in North America” can justify a higher price—especially for consumables, baby products, or health-conscious buyers.
With Trellis, our customers use real-time dashboards to map these insights directly to sales, margin, and ad performance. There’s no guesswork because you have the data you need to make strategic decisions.
5. Remove the Emotion
This is a top tip even outside of market volatility. You’re likely emotionally attached to your catalog (whether you recognize it or not). However, there is no space for emotion when you’re trying to adapt to the market.
You may have heard the “head/torso/tail” analogy when it comes to viewing a product catalog and its success. Your head is the 20% of products driving 80% of your revenue (Pareto Principle, anyone?). Then, your torso is the bulk of your catalog driving relatively consistent sales. Your tail consists of the bottom 20% of your catalog that is not doing you any favors.
- Score each SKU based on tariff impact, margin, and velocity. You can give it a number or letter score, but figure out a way to calculate that removes your feelings from the calculations.
- Cut the bottom 20% with the worst ROI. Yes, even if they’ve been with you since day one. These are your tail products. Put a discount on them or pull them from warehouses.
- Shift focus toward products with domestic sourcing potential or higher pricing elasticity. Your “head” likely is driving consistent sales, so your approach may be figuring out a way to lift some of your “torso” products.
6. Stay Compliant & Alert
Listen, we understand that following the rules isn’t necessarily the most exciting thing. However, compliance could be the differentiator for success with some sellers. At the very least, it could have the needed impact on your margins.
Make these steps part of your monthly checklist:
- Automate tariff alerts for your HTS (Harmonized Tariff Schedule) codes. Policies can shift overnight. You can’t afford to be caught off guard.
- Validate your HTS codes with a customs professional. Misclassification is a costly mistake—both in overpayment and delayed shipments.
- Standardize your customs documentation. That means digitizing invoices, packing slips, certificates of origin, and tariff exemption forms.
Turn rigorous compliance into your strategic advantage. The faster you can react to potential speed bumps, the better.
The Strategic Shift
Marketplace selling has always been dynamic. But we're entering a new era—one defined by geopolitical volatility, rising logistics costs, and rapidly shifting buyer expectations.
If you're still playing by the rules of 2022, you're setting yourself up for a hard landing.
Winning in 2025 requires:
- Operational flexibility
- Data-driven decision-making
- Geographic diversification
- Pricing agility
- Ruthless focus on profitable SKUs
At Trellis, we’re helping eCommerce brands build resilient growth engines that can absorb cost shocks, pivot supply chains quickly, and protect profitability in an unpredictable world.Book a demo today to see the platform in action. Now is the time to work with a partner you can trust.
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