In Their Own Words: How Brands Are Navigating the Impact of Tariffs
Corinne D'Andria
·July 30, 2025
This year’s been a whirlwind for ecommerce merchants, thanks to ever-changing tariff rates and the end of the de minimis exemption on shipments valued below $800. In the face of rising costs and uncertainty around foreign trade policy, what are savvy entrepreneurs doing to keep their businesses profitable?
We reached out to a group of ecommerce brands to understand how 2025 ecommerce challenges around tariffs and foreign policy changes had impacted their businesses, and got some great insights. Here’s a look at what they’re seeing, and how they’re responding.
Businesses are paying more for imported goods and materials
Across the board, merchants say their costs have jumped since tariffs went into place earlier this year, most by between 10% to 25%.
“The most noticeable effects have come from tariffs on imported leather and components, which have driven up production costs by approximately 15%,” says Matthew Tran, founder of the footwear brand Birchbury.
Michael Arnone, co-founder of the furniture retailer Two Seventy Nine, sources goods primarily from China, India, Vietnam and Indonesia. “Since the tariffs have taken effect our landed cost of goods sold has increased by around 15% in aggregate,” he says.
For Off Road Tents, a company that sells roof top tents that are manufactured in China, the impact has been even more extreme: “Tariffs have been 35% on roof top tents we imported from China, for a total amount of literally $43,000 from our most recent import,” says Gianluca Boncompagni, the business’ co-owner. “In the past, we used to pay 16.77% in total. It has been a significant increase impacting our costs.”
How they’re responding:
Brands are intensely aware of the challenging balance between controlling their costs and preserving a great experience for their customers. While price increases can help them offset the increased costs of doing business caused by tariff fees, some are focusing on other strategies, such as better inventory management, supply chain diversification, and making updates to their returns policies. By being strategic in managing their approach to increased costs, brands are able to preserve a positive customer experience that drives higher retention rates.
Increasing prices
In response to the increased costs of doing business, many – though not all – of the merchants we spoke to have raised their prices slightly as a way to maintain their margins.
“When the tariffs were announced, we raised prices across the board by 10%,” says Arnone. “This slightly decreased margins, slightly decreased unit sales volume, and slightly decreased revenue. We considered removing free shipping as a standard on some of our products, but ultimately opted to simply raise prices as we believe consumers would prefer to see the full price when they add to cart.”
“The price increase has been unavoidable,” echoes Tran. “To maintain margins, we have had to raise prices in most of our product categories, particularly our core line of shoes which saw a price increase of around $20 per pair.”
Inventory optimization
Others have focused on optimizing their inventory management to control costs: Although material costs have gone up by 12%, “rather than immediately raising prices, we adjusted by reducing the number of seasonal SKUs and streamlining packaging to offset costs,” says Amra Beganovich, founder of Colorful Socks. “It forced us to focus on bestselling designs instead of expanding into riskier inventory.”
“We have tried to play inventory levels in our favor,” adds Boncompagni. “Products where we had more stock have come in handy, as they are what we call ‘cheaper inventory.’ We know other retailers or brands have had to restock at higher costs, and if we still hold the ‘older’ stock, we can invest more in advertising than them for said products, still have a decent margin, and gain more customers along the way.”
Rattan Imports took a creative approach to supply chain optimization. “We started pre-ordering larger quantities during tariff announcement periods, essentially stockpiling inventory when rates were lower,” says Nino Russo Alesi, the company’s Acting CEO. “This required more upfront capital but saved us thousands.”
And Lori Appleman, co-founder of the ecommerce consulting agency Redline Minds, shares a success story from a home goods retailer client. “Instead of scrambling to find new suppliers, they shifted their entire Q4 buying strategy to focus on their top 20 SKUs only,” she says. “They used the tariff disruption as an excuse to finally kill their slow-moving inventory that was eating warehouse space and tying up cash. What separated winners from losers wasn't just absorbing costs - it was using tariff pressure to force better business decisions.”
Supply chain diversification
While nearly all types of imports have been impacted by tariffs, some retailers are finding opportunities to seek out manufacturers from countries with lower import duties.
For Birchbury, “this move has been slow and costly,” says Tran. “We had to find reliable partners in these regions while maintaining the high standards we expect. It also required significant upfront investment in both time and money. As a result, lead times for some products have increased by up to four weeks which has affected our overall product availability.”
Best Online Cabinets, a kitchen cabinet company, has also moved towards sourcing more products made in the US: “We’ve started collaborating with local artisans and manufacturers to develop comparable styles that minimize reliance on imported materials, thereby maintaining quality while controlling costs,” says COO and Co-founder Josh Quan.
Return policy adjustments
With up to 30% of ecommerce sales ending in a return, retailers are also looking hard at their returns processes to identify opportunities to recover revenue there. As a result, some are shifting their policies to protect their margins.
“To offset the additional operational costs, we have implemented a restocking fee on returned products” since tariffs came into place, says Tran. “It is a necessary step in keeping our business viable in a fluctuating market.”
Andres Bernot, founder of WOW! Shirts, says that his brand has implemented a small return shipping fee, and reduced the return window for seasonal products. “This will make it possible to maintain the same level of service delivery without allowing the increase in cost to eat up on our profits,” he says.
And while Off Road Tents hasn’t changed their returns policy, they’re working on reducing their return rate by improving their customer service, ensuring that shoppers have a chance to go over all their questions before making a purchase. “With high-quality customer service, we can help educate our customers so they are as confident as possible with their purchase, and reduce the amount of returns,” says Boncompagni.
Focus on sustainable growth
By making strategic choices to help them improve their margins, businesses are better able to weather the storm of uncertain foreign trade policy.
Choosing the right returns management platform can help: Brands who use Loop are able to optimize for a higher exchange and store credit rate, helping them preserve capital that would otherwise be lost to refunds. Loop’s products also help them mitigate against returns fraud losses, and provide the opportunity to offset return software and shipping costs with Checkout+.
By improving your brand’s focus on revenue retention and recovery, you’ll be able to keep your pricing and customer experience consistent – leading to higher sales and more repeat customers.
Want to learn how Loop can help your brand? Get in touch!
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