Tariffs, landed cost and pricing when the rules keep changing

For years, many consumer brands treated import costs as a fairly stable number in the spreadsheet. This spring changed that. A series of tariff announcements, revisions and pauses, along with changes to the exemption for low-value imports, meant the cost of landing a product could shift significantly within weeks.

There’s no way to predict trade policy with confidence. What brands can do is understand their costs properly, plan for a range of outcomes and keep enough flexibility to adjust. Here’s the framework we use. It isn’t legal or customs advice, and specifics should always be checked with a licensed customs broker.

Know your real landed cost

The unit price on a supplier’s quote is only the start. Landed cost is what a product actually costs by the time it’s ready to ship to a customer:

• Product cost from the supplier.
• Freight and insurance.
• Duties and tariffs, based on the product’s classification and country of origin.
• Customs brokerage and port fees.
• Inbound handling and warehousing.

Many brands discover their true margins only when they break this down carefully. When tariffs change, it’s the full landed cost that matters, not just the headline rate.

Get classification right

Duty rates depend on how a product is classified under the tariff schedule and where it’s considered to have been made. Classification can be genuinely complex. Similar products can fall under different codes with very different rates. This is an area to get right with professional help, not to optimise aggressively. Misclassification can lead to penalties that far outweigh any savings.

Plan in scenarios

Rather than betting on one outcome, we model several. Current rates, a higher-cost case and a lower-cost case. For each, we ask:

• What happens to contribution margin per order?
• How much can we afford to spend to acquire a customer?
• At what point does the product stop being viable at its current price?

This turns an anxious, open-ended question into a set of clear decision points.

Pricing options

When costs rise, raising the price is the obvious lever, but not the only one.

• Test before committing. Price sensitivity varies a lot by product. Testing a new price with a portion of traffic shows what customers will actually accept.
• Rethink the offer. Bundles, multi-packs and subscriptions can protect margins by raising order value and spreading fixed costs.
• Revisit the product. Packaging, materials and pack sizes can sometimes be adjusted without customers noticing a difference in quality.
• Be straightforward. If prices need to change, customers generally respond better to honesty than to silent increases or shrinking products.

Build supply chain flexibility

The longer-term lesson is resilience. Brands that rely on a single supplier in a single country have the least room to respond to sudden changes. Over time, we work towards:

• Qualifying suppliers in more than one country where the category allows.
• Understanding which products are most exposed, and prioritising those.
• Timing inventory purchases thoughtfully, without over-committing cash to speculative stockpiles.
• Keeping a close relationship with a customs broker who can flag changes early.

The bigger point

Tariffs are one example of a broader reality: the costs underneath an eCommerce business can move quickly. Brands that know their numbers in detail, plan in scenarios and keep options open can adapt. Brands that only watch top-line revenue tend to find out about margin problems last. Good operations aren’t glamorous, but in a year like this one they decide who keeps growing.