Navigating Tarrif While Keeping Your Business Strong

Welcome to the 53st edition of The Perspective.

Author

Ihtishaam Choudhary
April 16, 2025

Let's face it, waking up to headlines about 125% tariffs on Chinese imports isn't exactly how any of us wanted to start our summer.

The panic is real. Your margins are under threat. Your carefully calibrated supply chain is in chaos.

But here's the thing, this isn't the end of your business.

In fact, if you play your cards right, this could be the moment you pull ahead of competitors who are frozen in fear or making desperate, short-sighted decisions.

Tariffs Are Challenging, But Not Fatal

First, let's take a collective deep breath. Yes, these tariffs are significant. But ecommerce has weathered storms before - COVID supply chain issues, iOS14, inflation spikes and we're still here.

Volatility isn't the exception anymore, it's the rule. The brands that thrive aren't the ones who avoid chaos but the ones who build systems that anticipate and adapt to it.

As Mike Beckham from Simple Modern puts it: "I think if I look back over the last 5 years, the amount of times that we've talked about sort of an unprecedented change or a devastating XYZ has sort of reframed for me the idea that maybe the volatility is the constant."

Understanding Your Current Position

Before you make any moves, honestly assess your current situation:

Quadrant 1: Strong inventory + High cash + Low debt

  • You're in a position to take market share from competitors

  • Opportunity to undercut competitors and take market share

  • Can aggressively deploy pre-tariff stock

Quadrant 2: High inventory + Low cash + High debt

  • Focus on maximizing margin on every unit

  • Push bundles to increase AOV

  • Optimize for ROAS efficiency over volume

Quadrant 3: Low inventory + High cash + Low debt

  • You're a strategic buyer

  • Look for distressed inventory opportunities

  • Selectively resource manufacturing

Quadrant 4: Low inventory + Low cash + High debt

  • Focus on preserving cash flow and reducing expenses

  • Raise prices, reduce CAC

  • Focus on existing customers over new acquisition

Your position dictates your strategy. There's no one-size-fits-all response here.


7 Tactical Moves To Make Right Now

1. Diversify Your Supply Chain (If You Haven't Already)

Now's the time to seriously explore options beyond China:

  • Vietnam and Thailand have strong manufacturing capabilities

  • Mexico offers proximity advantages for North American brands

  • Look into reshoring options for critical components

Yes, this takes time. No, it's not a quick fix. But you should have started yesterday, so today is your next best option.

2. Negotiate Better Supplier Terms

Your existing suppliers know they're in trouble too. They need to keep your business.

  • Ask suppliers to absorb some tariff costs

  • Negotiate for better payment terms (net 60 or net 90)

  • Explore minimum order quantity reductions

As Taylor Holiday notes: "Suppliers are often willing to work with you on price... there's somebody who needs your business more than others and is probably willing to work with you."

3. Ruthlessly Audit Your COGS

Every cent matters when your margins are under pressure:

  • Do you really need that fancy packaging insert?

  • Can you simplify box design to reduce costs?

  • Are there materials substitutions that won't affect quality?

  • Consider "shrinkflation" - slightly reducing product size while maintaining price

Remember: A dollar saved in COGS can mean $5 preserved at retail.

4. Optimize Your SKU Portfolio

Not all products deserve to survive the rising tariffs:

  • Identify your margin champions and double down

  • Cut underperforming SKUs without mercy

  • Consider bundling low-margin products with high-margin ones

5. Get Surgical with Pricing Strategy

Don't just slap a blanket price increase on everything:

  • Test different price points on your highest-volume items

  • Consider tiered pricing strategies

  • Add value where you need to increase prices (bonus content, upgraded packaging, etc.)

  • Look for psychological pricing thresholds you can work within

6. Lean Out Your Operating Expenses

Time to take a hard look at where your money's going:

  • Audit your SaaS stack for redundancies

  • Implement zero-based budgeting for Q3 (start from $0 and justify every expense rather than building on last quarter's budget)

  • Shift fixed costs to variable where possible

7. Reconsider Your Team Structure

This is where most brands have the biggest opportunity for resilience.

The traditional ecommerce team is bloated with redundant roles and inflexible costs.

Ask yourself:

  • Do you need full-time specialists for tasks that could be handled by flexible talent?

  • Are you paying premium salaries for roles that could be performed remotely?

  • Have you explored the quality of offshore talent available today?

While many costs are rising, access to world-class talent is actually becoming more affordable thanks to remote work and global talent pools.

Brands that build flexible, globally distributed teams are finding they can:

  • Reduce opex by 40-60%

  • Access specialized skills they couldn't afford domestically

  • Scale up and down quickly as needs change

And contrary to outdated perceptions, today's offshore talent includes exceptional designers, developers, marketers, and operators who deliver work on par with (and sometimes exceeding) their U.S. counterparts.

The Silver Lining

It's worth noting that tariffs don't apply to services only physical goods. This creates an interesting opportunity to shift your competitive advantage toward exceptional customer experiences, content, and service delivery powered by global talent.

While your competitors panic about rising COGS, you could be building a more resilient, efficient operating model that's less vulnerable to supply chain disruptions.

A Quick Note From Us

At Oddit, we've built an exceptional design team by developing robust hiring systems that allow us to find remarkable designers at affordable rates. Through countless conversations with clients, we've heard a common frustration, finding great designers at reasonable prices is incredibly challenging.

Many brands have tried various routes, from unreliable freelancers who disappear mid-project, to expensive agencies with bloated processes, to in-house hiring that comes with substantial overhead costs. These approaches often lead to inconsistent quality, missed deadlines, and budget overruns.

We decided to take our learnings from Oddit and start a new venture to solve this problem. That's how Assisted was born – a service that provides great designers (vetted through our rigorous process) at a fraction of what you'd normally pay for local talent. The best part? These designers work directly under your payroll, while we simply take a small success fee for the placement.

For Perspective readers facing tariff pressures and looking to optimize their team structure, we're offering a substantial discount on our standard 25% success fee which is based on the designers annual salary. 

Assisted is currently launching its website, but we want to support early adopters now. Join our waitlist below if you're interested in finding exceptional talent at a fraction of typical costs.

Preparing For Long Term Success

The current tariff situation isn't something any of us wanted. But it's here, and your response will determine whether this becomes a major setback or an opportunity to improve your business fundamentals.

The brands that succeed will be the ones who approach this challenge thoughtfully, build flexibility into their operations, and use this moment to address inefficiencies they may have been ignoring.

Have a specific tariff challenge you're struggling with? Hit reply and let us know, we're collecting insights from across our community and may feature solutions in our next newsletter.

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