If you import products from Asia, tariffs are not a one-time event. They are a permanent feature of your business. The rates change, the categories shift, the exemptions come and go — but the underlying reality is constant: at some point, the cost of bringing your product into the country will change in a way you didn't budget for.
I've been importing for over 15 years, and in that time I've watched tariff policy swing dramatically in both directions. I've seen duties increase overnight on product categories I was actively shipping. I've seen exemptions expire with minimal notice. I've watched competitors scramble to rework their pricing because they built their margins on the assumption that the current tariff rate was permanent.
The brands that survive tariff changes aren't the ones that predict them. Nobody predicts them reliably. The brands that survive are the ones that build their supply chains to absorb the impact — and that starts with a mindset shift long before any specific policy changes.
The mindset: tariffs are a variable, not a constant
Most DTC brand founders build their cost models with a fixed tariff rate. They calculate their landed cost once, set their retail price based on that cost, and move on. The tariff line item in their spreadsheet doesn't change unless someone manually updates it.
This is understandable. You have a hundred other things to worry about — product development, marketing, customer acquisition, cash flow. The tariff rate is a number you looked up once, and as long as it doesn't change, it doesn't require attention.
The problem is that it will change. Maybe not this quarter, maybe not this year, but eventually the rate will move. And when it does, every decision you've made based on the old rate — your pricing, your margins, your order quantities — is suddenly wrong.
The mindset shift is simple but important: treat your tariff rate as a variable in your cost model, not a fixed number. This means understanding what your margins look like at the current rate, at a rate 10% higher, and at a rate 25% higher. It means knowing at what tariff rate your product becomes unprofitable at your current retail price. It means having a plan — not a detailed plan, but at least a general direction — for what you would do if duties increased significantly.
Most founders who do this exercise for the first time are surprised by how thin their margins are at higher tariff rates. That surprise is valuable — it's much better to feel it during a planning exercise than during an actual tariff increase.
Know your HTS codes cold
Your Harmonized Tariff Schedule code determines what duty rate you pay. It's a 10-digit number that classifies your product into a specific category, and the difference between getting it right and getting it wrong can be thousands of dollars per shipment.
Most DTC brands rely on their customs broker to classify their products, and most customs brokers do a competent job. But HTS classification isn't always straightforward. Many consumer products could plausibly fall into multiple categories, and the duty rates between categories can vary significantly.
Take the time to understand your HTS codes — not at the level of a customs attorney, but well enough to have an informed conversation with your broker. Know what category your product is classified under, what the current duty rate is, and whether there are alternative classifications that might apply. If tariffs increase on your current HTS code, knowing the landscape of adjacent codes could save you a meaningful amount of money.
This isn't about gaming the system. It's about ensuring your products are accurately classified, because an inaccurate classification in either direction is a problem — you're either overpaying duties or risking a customs audit.
Supplier diversification: the strategy everyone talks about and nobody does
Every article about tariff strategy mentions supplier diversification. Fewer explain why most DTC brands don't actually do it, even when they know they should.
The reason is straightforward: finding a new supplier is expensive and risky. You've spent months or years building a relationship with your current factory. They know your specs, your quality standards, your packaging requirements. Switching to a new factory — or even adding a second one — means going through the development process again. New samples, new quality calibration, new communication rhythms. It takes time, money, and attention away from everything else you're doing.
So brands don't diversify until they're forced to — by a tariff increase, a quality failure, or a capacity constraint. And by then, they're diversifying under pressure, which means they make compromises they wouldn't otherwise make.
The better approach is to diversify proactively, even if slowly. You don't need to move your entire production to a new country overnight. Start by identifying one or two alternative factories — whether in a different region of China, in Vietnam, India, or another manufacturing hub — and run a small trial order. Get samples, evaluate quality, understand the cost structure and lead times.
The goal isn't to move production immediately. The goal is to have a validated alternative ready so that if tariffs change or your primary factory has a problem, you can shift volume without starting from scratch. Think of it as supply chain insurance.
Landed cost tracking: the number most brands don't calculate
Your product cost isn't what you pay the factory. It's what the product costs when it's sitting in your warehouse, ready to sell. That's your landed cost, and it includes the factory price, freight, duties, insurance, customs brokerage fees, and any warehousing or handling charges.
Most DTC brands know their factory price precisely. Fewer know their true landed cost, because the freight and duty components fluctuate and the information lives in different places — the factory invoice is in one email, the freight bill is in another, the customs entry is in a broker's system you don't have access to.
When tariffs change, your landed cost changes. If you don't track your landed cost as a single number that you update regularly, you won't know how much your margins have actually shifted until you run the math weeks or months later.
Build a landed cost model for each of your core products. Include every cost component: factory price (FOB or EXW), freight (ocean, drayage, any inland transport), duty (current rate applied to the declared value), insurance, customs brokerage, and warehousing. Update it whenever any component changes.
When tariffs increase, you can immediately see the impact on your per-unit cost and your margin. That speed of understanding is the difference between a measured response and a panicked reaction.
Dual sourcing: the practical middle ground
Full supplier diversification — where you split production across multiple factories in multiple countries — is the ideal. But for a DTC brand doing $1 million to $10 million, it's often impractical. You don't have the order volume to maintain meaningful relationships with three different factories, and the complexity of managing multiple supply chains can create more problems than it solves.
Dual sourcing is the practical middle ground. Keep your primary factory for the majority of your volume, but develop a relationship with one alternative supplier who can handle a portion of your production. The split doesn't have to be even — 80/20 or 70/30 is fine. The point is that you have a second source that's proven, validated, and ready to take more volume if needed.
Dual sourcing also gives you negotiating leverage. When your primary factory knows you have an alternative, pricing and timeline conversations become more balanced. You're no longer a captive buyer.
The key to making dual sourcing work is treating both suppliers as real partners, not keeping one as a backup you only call when things go wrong. Run regular orders through both factories so both stay current on your specs and quality standards. If you only use your backup factory once a year, they won't prioritize your orders when you need them most.
What to do when tariffs actually change
When a tariff change hits — and it will — your response time matters. Here's the sequence that experienced importers follow:
First, calculate the immediate impact. Pull your landed cost model, update the duty rate, and see what your new per-unit cost is. Compare it to your retail price. Do you still have a viable margin?
Second, assess your in-transit inventory. Orders that are already on the water or cleared customs may be subject to different rates depending on when the tariff change takes effect. Talk to your customs broker immediately to understand which shipments are affected and which aren't.
Third, decide whether to absorb, pass through, or adjust. You have three options: absorb the cost increase into your margins, raise your retail price, or find ways to reduce other cost components. Most brands end up doing some combination of all three.
Fourth, adjust future orders. If the tariff increase is significant and appears permanent, revisit your order quantities, your pricing strategy, and your supplier mix. This is where having a validated alternative supplier pays off — you can shift volume without a six-month lead time to develop a new source.
Building a tariff-resilient supply chain
Tariff resilience isn't about avoiding tariffs. It's about building a supply chain that can absorb tariff changes without throwing your entire business into crisis mode.
That means knowing your landed costs precisely, having at least one alternative supplier validated and ready, understanding your HTS classifications well enough to have an informed conversation with your broker, and treating your tariff rate as a variable that could change at any time.
It also means having visibility into your supply chain. When tariffs change, you need to know immediately which orders are affected, what stage of production they're in, and what your options are. If your order tracking is scattered across email threads and spreadsheets, assembling that picture takes days or weeks — time you don't have.
This is one of the reasons I built Tackr with a structured order lifecycle. When every order has a clear stage — Order, Confirm, Production, QC, Ready, Ship, Deliver — you can instantly see which orders are still in production (and might be rerouted), which are ready to ship (and should be shipped before a tariff deadline), and which are on the water (and may or may not be affected depending on the effective date).
Tariffs will always change. Your ability to respond doesn't have to depend on how fast you can search your email.
About the Author
Richard Stanton is the founder of Tackr, a supply chain collaboration platform for DTC brands that import goods from overseas. Over 20+ years he has founded and scaled multiple companies across e-commerce, consumer goods, technology, and cybersecurity — with seven appearances on the Inc 500 list. His 15+ years of hands-on importing from Asia, including running a dedicated factory in China, is exactly why he built Tackr.