The Tariff Tightrope: How E-Commerce Businesses Can Navigate Pricing, Sourcing and Customer Trust

As tariff tensions fluctuate, their consequences are already rippling through global supply chains. For small and midsized e-commerce players, it’s not just a policy issue — it’s a strategic threat to pricing models, sourcing stability and customer trust.

Retailers are grappling with rising landed costs and longer lead times, and many are being forced to revisit their supplier relationships and rethink how they explain price changes to their customers. A recent report from the Budget Lab at Yale found that the average U.S. tariff rate surged to 22.5 percent, the highest since 1909. This increase is showing up in consumer prices too, with households spending an estimated $3,800 more per year as a result.

So what can smaller e-commerce brands do to stay ahead? Here are four key areas to focus on as we navigate what could be a challenging year for international trade:

1. Know your tariff exposure and plan accordingly. 

Many businesses are uncertain about which of their products are affected by current or proposed tariffs. This lack of clarity can be risky, especially in a low-margin environment. It's essential to map your product catalog to the corresponding Harmonized Tariff Schedule (HTS) codes and consult with customs brokers or trade advisors to forecast potential changes in landed costs.

Some e-commerce platforms offer integrations with cross-border tools that can automate this analysis, helping sellers anticipate duty increases or new category impacts.

2. Rethink pricing with transparency and strategy.

In today's market, where consumers are increasingly price-sensitive, raising prices isn't straightforward. E-commerce brands must balance between protecting their margins and preserving customer trust.

Consider strategies such as the following:

• Bundled Pricing: Offer kits or sets that combine higher-duty items with lower-cost products to mitigate perceived price hikes.
• Flat-Rate Shipping With Duties Included: Implement Delivered Duty Paid (DDP) pricing to eliminate surprise fees at checkout, fostering trust even if base prices are slightly higher.
• Transparent Communication: If price increases are necessary, explain the reasons behind them. Sharing short videos or blog posts detailing how global changes affect costs can help customers feel informed and valued.

3. Diversify sourcing without sacrificing speed.

The trade tensions between 2018 and 2020 highlighted the importance of supplier redundancy. While shifting production can be time consuming and costly, it's not always necessary to move all manufacturing out of a particular country. Instead, explore alternative vendors in regions like Mexico, Southeast Asia or even domestic markets. Collaborating with sourcing networks and third-party logistics (3PL) providers can facilitate this transition.

The goal isn't solely to avoid tariffs but to enhance resilience. If future duties impact your top-selling category, having flexible sourcing options can help you adapt quickly.

4. Leverage technology for resilience.

E-commerce tools and logistics integrations can assist merchants in:

• accessing real-time landed cost data;
• simplifying international checkout and tax compliance; and
• gaining logistics flexibility through integrations with 3PLs and supply chain visibility tools.

For small business owners, every percentage point matters. A 10 percent tariff can significantly erode already-thin profit margins. Therefore, education, transparency and preparedness should be integral components of any e-commerce strategy.

While tariffs can pose challenges, they also offer opportunities. Brands that adapt swiftly with improved sourcing, strategic pricing and clear communication can gain a competitive edge. Some successful merchants view global disruptions as catalysts for innovation.

Austin Comer is general manager of small business commerce at BigCommerce, a leading provider of open, composable commerce solutions for B2C and B2B brands and retailers.