Tariffs are quietly eating into margins for a lot of brands right now, and most don't realize how much until they see the full landed cost. A product quoted at $5 from factory can easily land at $8-9 once tariffs, shipping, and customs costs are factored in. This is especially true for Chinese-origin goods affected by stacked duties.
If you're producing at scale, this is probably already impacting your margins. If you're running at smaller volumes, this might not feel relevant yet, but understanding how tariffs compound is still worth keeping in your back pocket before scaling into larger orders.
The brands handling this best aren't just absorbing the cost. They're restructuring how and where they produce. A few things we're seeing from brands managing this well:
- Looking beyond the cheapest factory quote
- Restructuring final assembly locations
- Splitting production across multiple countries
- Using trade agreements more strategically
- Matching products to the right manufacturing regions
We put together a breakdown on how brands are reducing US tariff exposure and protecting margins in 2026 here: 5 Ways to Reduce US Import Tariffs
If you want a second opinion on whether your current setup is costing more than it should, just reply to this email. Happy to take a look.
Cheers,
David
