Tariff Q&A: What Brands Need to Know

We all know that Tariffs are complex. The impact? Even more so. We brought together a panel of industry experts and let brands ask the tough questions. The answers sparked real insights. Here’s what you need to know.

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Q: Are brands shifting manufacturing locations or diversifying sourcing to reduce tariff exposure? If so, how quickly can those changes take effect?

Yes and no, it’s not fast.

Plenty of brands are exploring new sourcing strategies. Moving production outside of China is definitely on the table. But rebuilding that scale somewhere like Vietnam or Cambodia doesn’t happen overnight. Depending on the category, it can take years.

That said, larger brands with diverse portfolios often have a head start. For example, one brand we work with manufactures about 40% of their products in China and has alternative suppliers lined up. They’ve already received samples from those locations and are evaluating how quickly they can ramp up production.

Still, the timeline stretches for companies starting from scratch - finding new suppliers, securing capacity, and reengineering products. One brand we're advising is targeting year-end for first production. And that’s the best-case scenario.

In short: yes, it’s happening. Think runway, not light switch.

Q: With so much uncertainty, making a manufacturing move isn’t easy. Are brands taking action or waiting it out and hoping for clarity?

A lot of brands are in a “wait and see” mode. The tariffs that were paused are expected to return in early July, but what happens after that is anyone’s guess. It’s a tough call.

Looking globally, brands are weighing the worst-case and best-case scenarios for alternative sourcing countries. But shifting to new regions? It’s a competitive, complicated process. And the pressure’s on to make the right call.

For now, many are holding off on big decisions like committing to Prime Day inventory because they’re unsure if they can replenish supplies. With uncertainty around tariffs and supply chains, it’s a delicate balance. In short: brands are trying to delay as long as possible, waiting for some clarity.

This whole situation is fluid. So, many brands are simply staying on the sidelines, waiting to see what comes next. Because right now, what’s true today could change tomorrow.

Q: Are Chinese brands finding ways to bypass these tariffs and still sell on Amazon?

The short answer: not really.

What we’re seeing is a slowdown in imports coming into the U.S. Shipments are taking longer to clear customs, and everything coming in through the “right” channels, especially in bulk, is getting hit with more inspections, verifications, and, of course, tariffs. So, it’s definitely becoming harder for Chinese brands to move products without facing those roadblocks.

What will be interesting in the coming weeks is how the market share data shifts. Are brands dropping off the radar? If you’re competing in a category with heavy Chinese manufacturing, keep an eye on your share. It might change more than you expect.

On the flip side, there’s a bit of an upside to all this. As the competition tightens, we’re starting to see some brands that were never quite a fit for the market start to fall off. It’s a natural culling, and that could open up space for those with more established brands to thrive. Tracking market share data will be key to understanding how much ground you’re gaining(or losing) relative to your competition.

Here’s a real-world example: one brand we work with, priced around $20-$25, saw their main competitor skyrocket to nearly $50. Now, while that opens the door for a potential boost in demand and market share, it also means their stock could move faster. This brand is well-diversified, with only a small portion of their products manufactured in China. For them, the focus is now on driving traffic to their well-stocked items, staying competitive within that price range, and capitalizing on the shifts in the market.

For many categories, this could be a win. As the lower-priced competition on Amazon gets cleared out, more established brands with premium price points could find it easier to compete. Anyone selling in the sub-$20 range knows how tough it can be to stay profitable with Amazon’s fees and the sheer volume of competition. If some of those low-price players start to fade, it might just be the break more premium brands need.

Q: Are there specific product categories of HS Codes currently facing a heavier impact from tariffs?

Yes, there are definitely some categories taking a bigger hit. 

Auto parts are a big one, as they face both country-specific tariffs and additional levies on certain parts. Apparel and footwear are also seeing a significant impact, along with home goods like furniture and décor—largely due to sourcing from high-tariff countries like China and Vietnam.

Food and Beverage, especially items like coffee and chocolate, are feeling the pinch as well. These products are subject to tariffs on Brazil and Colombia, though some of those have been paused. Still, the baseline tariffs are still a factor. Medical supplies across various HS codes are also getting affected.

On the flip side, not every category is hit hard. Electronics, for example, have recently received exemptions, including smartphones and laptops. Natural inputs like vitamins (Vitamin C, Vitamin A) have also been exempted, providing some relief for brands relying on those ingredients.

Bottom line: keeping tabs on both what’s getting hit and what’s getting a pass could be the key to staying ahead of the game.

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Q: How are brands managing tariff-driven cost increases while staying competitive with marketplace pricing algorithms?

Amazon’s price suppression is a real thing. If prices jump more than 3 to 5%, Amazon may step in. 

The problem? Amazon doesn’t share the exact line, and it might differ by category. So, it’s all about testing and guessing. Fun, right?

Brands are taking different approaches. Some are going for slow and steady, a 5% increase each month, though for some it might take over a year to get to the desired price. Others? They’re biting the bullet and jumping straight from $50 to $70, hoping for the best.

When things go awry, we’re in it together. If a price gets suppressed, we back it up with funding to keep the Buy Box alive, testing how far we can push those limits. It’s a bit of a dance, since Amazon won’t budge on its pricing rules—they want to stay the most competitive platform out there.

A solid strategy? Don’t just raise prices on Amazon. Try other channels_retailers, DTC, in-store, before touching marketplace prices. Amazon’s algorithm is sensitive to price changes elsewhere, so get those prices right off-platform first, then focus on the marketplace. It’s a smart way to avoid a price suppression headache.

Q: How does de minimis affect businesses right now?

When it comes to de minimis, think of it as a cross-border shipment issue. It typically applies to shipments under $800, allowing products to bypass traditional tariffs and fees if the consumer covers the shipping and extra charges.

We see this often with Amazon FBA agreements where items are shipped and sold by Pattern, especially in North America to Canada and Mexico. However, the price is higher for customers because they’re paying for shipping and fees on top.

In terms of sales volume, it’s a smaller piece of the pie because of those extra costs for the consumer. Now, if you’re thinking about the reverse, shipping into Canada first and then crossing the border into the U.S., you’re still going to face tariffs and demand will likely dip due to those extra costs.

As for changes to the de minimis rule, here’s the kicker: It’s shifting. As of May 3rd (or even as early as May 2nd), parcels under $800 from China and Hong Kong will no longer be exempt. This will definitely hit platforms like Shein and Timu, which thrive on those small, low-cost shipments from those regions. So, expect some turbulence there.

Q: What advice do you have for brands when it comes to modeling or forecasting, especially with so many uncertainties ahead?

It really comes down to understanding your risks. 

This moment is a great exercise in evaluating the risk profile of your business. Think about the 80/20 rule. Does most of your revenue come from a product line that’s tough to diversify? If so, it might be time to re-evaluate. But yes, it’s a tricky question.

What we’ve found useful is modeling that connects inputs to revenue outputs. Rather than diving into bottom-up or item-level forecasting(which can be a real headache for brands), we look at broader scenarios. For example, we can run a scenario to see what happens if conversion drops by X%. How will that affect total demand? If your average selling price (ASP) goes up and demand stays steady, that’s great for revenue. But the reality is, if your ASP jumps too much, you’re likely to see a dip in conversion and velocity.

If you’re working with Pattern, I’d suggest reaching out. Let’s build some scenarios to see how changes in inputs affect your bottom line, and track how things actually play out. Is your ad strategy still working? Are you spending more or less? What happens if you cut ad spend? These are the questions worth exploring now.

Q: What are your thoughts on passing tariff costs onto consumers or marketplaces, like Amazon or Walmart, especially considering the tariff cost notifications and transparency we’re seeing?

When it comes to passing tariff costs to consumers, it’s a balancing act. 

Shoppers on Amazon and Walmart are already price-sensitive, so it’s crucial to be strategic about price increases. Price elasticity testing is key here. Some products will tolerate a price hike, but others may not.

Before raising prices, focus on specific categories and products. Not all items will react the same way, and raising prices too much could result in Amazon suppressing your buy box, which hurts visibility and rankings.

As for Amazon listing tariff costs on product pages, it’s an interesting social experiment from a consumer perspective. From a brand perspective, it’s tricky. Raising prices might push consumers toward lower-priced alternatives, especially if your brand offers a range of price points. It’s all about driving traffic and maintaining brand presence, even if consumers trade down.

We've seen this with consumables like vitamins, where shoppers may opt for a smaller bottle if it helps with costs, even if the per-unit price is higher. The same logic applies to hard goods. If the top-tier product is too expensive, a more affordable option with your brand name may still do the trick. It’s about keeping the customer journey intact, even when budgets are tight.

Q: In a tariff-heavy environment, does it make sense to offer 2- or 3-packs of products at a slight discount, especially if it helps offset shipping costs?

In most cases, multi-packs aren’t a winning move. 

While they might seem like a smart way to manage tariff-related costs, bundling products can push you into higher shipping tiers, which drives up FBA fees and retail prices without delivering much savings.

That said, for bulkier items or categories where demand supports higher volumes, there may be some strategic upside. If you’re already increasing production, offering multi-packs could help move inventory more efficiently. But overall, this isn’t a one-size-fits-all fix. It’s something to test carefully, not apply across the board.

Q: Do you think U.S. buyers on Amazon and Walmart are willing to pay a premium for products made in the U.S.?

The question of whether consumers will pay a premium for products made in the U.S. is certainly intriguing. While we don’t have specific data on hand to directly link U.S. manufacturing to sales lifts or customer loyalty, one noticeable trend is the growing popularity of brand stories on product detail pages. Many brands have started to highlight their U.S. manufacturing origin as part of their identity. This has been a significant shift over the last 6 to 9 months, as brands look to share their story and take pride in their origin.

For brands that manufacture in the U.S. or have shifted their production there, there’s definitely an opportunity to leverage that messaging. In certain categories, U.S.-made products may even rise to the forefront of the market. However, the question of whether consumers will pay more for it is still a bit of a waiting game.

The premium consumers are willing to pay will likely depend on several factors: how much more expensive the product is, and what the quality comparison is like. A 5% price increase might be more palatable than a 25% jump, especially if the quality holds up. But if the product doesn’t live up to expectations, even the most loyal customers might balk at paying more.

Ultimately, it’s about finding the right balance between price, quality, and the story a brand tells. How much of a premium consumers are willing to pay for a U.S.-made product will depend on how well these factors align.

Q: How is Pattern helping brands get ahead of tariff-related challenges before they hit?

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When it comes to navigating tariffs, it’s all about being proactive, understanding the market, and making smart moves.

We help brands dig into their data to figure out where they can increase prices without taking a hit on sales. It’s all about knowing which price points have room to grow and which ones need more careful handling. 

Assortment planning plays a huge role here, too. By understanding which products might be more vulnerable to tariff increases, brands can make smarter decisions about where to focus their energy. And if a brand is heavily reliant on products from regions impacted by tariffs, we help them think through options—whether that’s diversifying suppliers or making the most of their current stock.

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We have a shared inventory pool that lets us compare data across brands, helping us spot trends and adjust quickly. This gives brands an edge in competitive categories. Plus, when it comes to managing multiple marketplaces, we can help brands adjust prices across platforms seamlessly, ensuring consistency without pricing issues.

In the end, it’s about staying ahead of the curve, using the data to guide decisions, and being ready for whatever comes next.

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As you can see, navigating the current landscape of tariffs, pricing, and manufacturing decisions requires a strategic approach. 

The key is staying informed, testing assumptions, and being ready to adjust when needed. 

If you have further questions or want to dive deeper into how these changes could impact your brand, don’t hesitate to reach out. We're here to help you stay ahead of the curve. Connect with us here.

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