Tariffs Are Here — We Just Don’t Know How Bad It’ll Get

May 19

Will tariffs go up? Stay the same? Get repealed?

Nobody knows. And that uncertainty makes it tough to plan.

Just recently, we saw talk of a 50% tariff increase on Chinese imports — on top of the hikes already in place. That would bring the total to a 104% increase since the start of the year. 🤯

Whether or not those numbers actually happen, one thing is clear: your margins could be at serious risk.

So the real question is: How do you prepare now — to protect your bottom line and stay flexible, no matter what happens?

Here’s the exact framework we walked through with a client just last week:

1. Start with your P&L

Model the impact of new tariffs as if nothing else changes.

How much of an impact to the bottom line would that be?

How much is that per order?

Once you have that baseline, go line by line through the P&L to identify where you can claw back margin

2. Audit Your 3PL Costs

Are your pick/pack/ship rates competitive?

Are outbound shipping fees higher than they should be?

Are invoices broken down by transaction so you can spot extra charges?

Always ask your 3PL to provide detailed invoice backup. This is the easiest way to identify — and challenge — hidden fees.

3. Negotiate with Suppliers

Tariffs are a serious threat to profitability. Your factories should understand that — and be willing to work with you.

Push not just on price, but also on terms that improve cash flow:

Longer payment windows

Lower minimum order quantities (MOQs)

More flexibility on reordering based on demand

These factors are even more important in a time of uncertain future demand.

4. Re-evaluate Acquisition Strategy

Now is the time to question everything. We’re not saying do anything drastic that you can’t reverse. But seriously question your plan for the year and whether it needs to change. Is now the time to pull back on spend and focus on higher efficiency? Don’t feel married to your budget just because that is what is on paper. You can change given changing circumstances.

5. Strengthen Retention

Improving repeat purchase behavior is always important. But is especially important if you pull back on acquisition as mentioned above. What can you do to increase repeat purchase? Is it email / SMS? Is it a product offering? Loyalty incentives?

Every improvement to LTV gives you more breathing room on the front end.

6. Test Pricing Strategically

Pricing is an obvious lever, but it is hard to predict the impact of changes. Using tools like Intelligems can help A/B test changes safely.

You can also experiment with:

Raising the free shipping threshold

Reducing blanket discounting

Smarter bundling

Tighter return policies

The key is to test, measure, and adjust — not to guess.

The takeaway

Tariffs might spike. They might not. But if you're not preparing for multiple outcomes, you're taking a risk you don't have to.

Need help thinking through scenarios and next steps?

That’s what we do. Reach out.

Until next time, scale on!

Sherilee Maxcy