If you’re like a lot of eCommerce store owners, you built your business when trade was predictable.

You could manufacture in China, import to the US, and keep costs low by doing so.

That was the playbook and it worked for years. Decades, even.

Then 2025 happened.

Tariff rates have changed 20 times this year alone.

The $800 de minimis exemption that let small packages slide through customs was eliminated on August 29. 

For many store owners, that means higher landed costs and thinner margins. What’s more complicated is that for many, you’re not starting a new business where you can include tariff costs in your pricing from the beginning. You’ve likely got existing customers, established price points, and relationships to defend. The question isn’t whether tariffs will impact you—it’s how much and what you can do about it.

The good news is that you do have some control, and there are actions you can take. Some are immediate, while others are more long-term. But none of these require dismantling your entire operation or starting over. Let’s discuss how to protect what you’ve built.

Audit Your Current Tariff Exposure

Tariffs are expensive, but if you want to reduce costs, you need to be able to measure just how expensive they are. Since most eCommerce store owners are not used to dealing with tariffs, it can be hard to know how to go about that.

Here’s what we recommend.

1. Start with your biggest pain points.

Pull your import data from the last 12 months. If you’re working with a customs broker, they should be able to get you this information quickly. If you’re handling customs yourself, check your records from CBP.

Now calculate the tariff cost per SKU using this formula: Import value × Tariff rate × Annual volume = Annual tariff expense.

As is often the case, it’s likely that 20% of your SKUs are generating 80% of your tariff costs. Figure out what’s causing a disproportionate amount of the expense for you and focus on fixing that first.

A skincare brand we work with discovered that three products—representing only 15% of their catalog—were responsible for 60% of their tariff expenses. That’s where they focused first.

2. Calculate margin impact.

Here’s what most businesses get wrong: they look at tariff rates as percentages and think “15% isn’t that bad.” But tariffs don’t come out of your revenue. They come out of your profit.

If you’re running on 25% gross margins and face a 15% tariff increase, you’re not losing 15% of your profit. You’re losing 60% of it.

This is why it’s a really good idea to run this calculation for your top products. 

Current gross margin might be $25 on a $100 product. But the addition of a tariff adds $15. Your remaining margin drops to $10. That’s a 60% margin reduction.

The point is: take the time to do the math and make sure that nothing subtle—but extremely expensive—like this is slipping by unnoticed.

3. See if any of your products are classified incorrectly.

Here’s something that might surprise you: your products might be classified wrong. Or more accurately, they might be classified conservatively when a more specific HS code could save you money.

Long story short, every product has an HS code. And HS code and country of origin play a big role in which tariff rate gets applied.

What’s notable here is that HS code classifications can change when you’ve modified materials or components, added or removed features since initial import, updated software or firmware that changed functionality, or when your initial classification was broad where specific options exist.

Check the CBP CROSS database for products similar to yours. You might find precedent for a lower-rate classification. (This is also a place where a great customs broker can really help.)

Tips to Save Money on Tariffs with Sourcing

Quick fixes help, but if you really want relief from tariffs, you’ll need to make strategic changes to where and how you source products. The key is making these transitions without disrupting your existing business.

Here’s how you can go about that:

1. Plan your supplier migration.

Moving production isn’t like flipping a switch. It’s more like steering a large ship.

So start by mapping your products into three categories. High-volume, standardized products are good candidates for near-shoring to places like Mexico or Eastern Europe. Complex or specialized items may need to stay with current suppliers initially. New product launches make the perfect testing ground for alternative suppliers.

Begin with new products. Use them to test supplier capabilities, quality standards, and logistics. Once you’ve proven a new supplier can deliver, gradually transition existing products. It’s far more risk-averse this way.

2. Build dual-source capabilities.

Don’t put all your eggs in one geographic basket. Smart businesses are diversifying their supplier base specifically to manage tariff volatility.

The goal isn’t to split every product 50/50 between suppliers. It’s to have proven alternatives ready when you need them.

The ideal state is to have a primary supplier in China for lowest unit costs, a secondary supplier in Mexico or Vietnam for tariff optimization, and an allocation strategy based on current tariff rates and volume commitments.

When tariffs are low, you then order from your lowest-cost supplier. When they spike, you shift volume to your tariff-optimized alternative.

3. See if you can near-shore your manufacturing.

Near-shoring means manufacturing closer to your target markets. And while it’s historically been cheaper to manufacture in China, the current tariff-heavy environment has made nearby manufacturers suddenly more attractive when you factor in total landed costs.

Mexico offers significant advantages for US sales through USMCA trade benefits that often result in 0% tariffs, faster shipping times measured in days rather than weeks, lower freight costs, and reduced political risk.

Eastern Europe provides similar benefits for EU sales with market access without external tariffs, a skilled manufacturing base, and strong supplier networks in electronics and textiles.

Run the total landed cost comparison. A Chinese product at $10 plus $3 freight plus $2.50 tariff totals $15.50. A Mexican product at $12.50 plus $1.50 freight plus $0 tariff totals $14.00.

Without the tariff, China would be the cheaper place to manufacture in that example. But factor the tariff in, and you find that the Mexican option is cheaper—and ships faster. That’s the kind of math that’s driving sourcing decisions in 2025 and beyond.

4. Design products for tariff optimization.

Sometimes small design changes can shift you into a lower tariff category. This takes longer to implement, but the savings compound over time.

Consider material substitutions where plastic components often have lower tariff rates than metal. Feature modifications like removing certain electronics might change HS code classification.

Packaging components separately lets you ship high-tariff components apart from low-tariff ones. Assembly location matters too since final assembly in a low-tariff country can qualify for origin benefits.

Use the Harmonized Tariff Schedule to research how different materials or configurations might affect your classification.

Tips to Save Money on Tariffs with Order Fulfillment

Where and how you store and ship products can significantly impact your tariff exposure. The right fulfillment strategy doesn’t just save on shipping—it can reduce or eliminate tariffs on a large portion of your orders.

1. Warehouse products regionally instead of shipping internationally.

Storing inventory in multiple regions isn’t just about faster delivery. It’s about tariff arbitrage.

Here’s how it works: You import products in bulk to one region, paying tariffs once. Then you distribute locally within that market, avoiding cross-border tariffs on individual orders.

Imagine this hypothetical setup: 

You send 50% of inventory to a US fulfillment center and pay US tariffs on the bulk import. Another 35% goes to an EU fulfillment center and pays EU tariffs/VAT on that bulk import. The final 15% goes to other regions as needed.

Your US customers get products from US inventory with no additional tariffs. Your EU customers get products from EU inventory with no additional tariffs. 

And you only pay tariffs on the wholesale value of the goods. This means you will have eliminated cross-border tariff costs on individual shipments. This is exactly the kind of regional fulfillment strategy that helps protect margins while maintaining fast delivery times.

Regional fulfillment isn’t right for everyone. It makes the most sense when you’re shipping 500+ units annually to a region, when average order value is high enough to absorb additional handling costs, when you have predictable demand patterns to forecast inventory splits, and when customer service can handle returns and exchanges in multiple regions.

If you’re shipping 50 units to the EU per year, regional fulfillment will cost more than it saves. But if you’re shipping 2,000 units, the math usually works. Understanding fulfillment pricing models helps you run these calculations accurately.

2. Choose a 3PL with tariff expertise.

Not all fulfillment providers understand international trade requirements. You need partners who can handle customs documentation for international shipments, VAT compliance in relevant markets, free trade zone operations for inventory holding, and duty-free processing when applicable.

Ask potential 3PL partners about their customs clearance capabilities, whether they can handle VAT registration and remittance, their experience with free trade zone operations, and how they handle returns from international customers.

The right 3PL can help you cut down on the worst of your tariff exposure while still providing excellent service. The wrong one will create more problems than they solve. Look for fulfillment providers with proven experience in your product category and international compliance.

3. Look into duty management programs.

Some 3PLs offer duty management programs that can reduce your effective tariff rates through legitimate trade programs.

Foreign Trade Zones (FTZ) let you store inventory in designated zones without paying duties until goods enter US commerce. Benefits include duty deferral until products are sold, the ability to modify products to qualify for lower rates, elimination of duties on exported goods, and reduced inventory carrying costs.

Bonded Warehousing operates similarly to FTZ but with different operational requirements. It’s good for businesses that import large quantities and need flexibility in when duties are paid. The Foreign Trade Zone Board provides information on how to access these programs.

These programs have setup costs and operational requirements, but if you happen to be a high-volume importer, then these savings can really stack up.

The Bottom Line

Tariff volatility isn’t going away anytime soon. If anything, trade policy is becoming more unpredictable, not less. The businesses that survive and thrive will be the ones that build flexibility into their operations.

You don’t need to perfect every strategy in this guide. Pick the ones that make the most sense for your business and start there.

Most important of all is to start looking for ways to reduce tariff exposure today—before the next round of changes catches you unprepared.

Your competitors are dealing with the same challenges. The ones who adapt fastest will have the advantage. Make sure that’s you.

Frequently Asked Questions

How do I calculate the true cost of tariffs on my Shopify store?

Use this formula from the article: Import value × Tariff rate × Annual volume = Annual tariff expense. Then map it to margin impact at the SKU level. For example, a $100 product with a $25 gross margin can drop to $10 if a $15 tariff hits, which is a 60% margin loss. Run this math on your top SKUs first.

Why do “small” tariff rates crush profit more than I expect?

Tariffs come out of profit, not revenue. If your gross margin is 25% and tariffs add 15%, you can lose 60% of your margin on that SKU. Most teams look at the rate, not the margin delta, and miss the real damage. Always model margin before you set prices or budgets.

What’s the first step to reduce tariff costs without disrupting my business?

Pull the last 12 months of import data and rank SKUs by total tariff expense. Focus on the 20% of SKUs causing 80% of the cost. Check their HS codes, validate country of origin, and test alternatives on low-risk SKUs or new launches before moving high-volume items.

How can incorrect HS codes inflate my duties, and how do I fix them?

A broad or outdated HS code can apply a higher rate than necessary. The article recommends checking the CBP CROSS database for rulings on similar products, then working with your customs broker to reclassify. Reclassification is often possible when materials, components, or functionality have changed since your first filing.

What changed with de minimis and why does it matter?

The $800 de minimis exemption was eliminated on August 29, 2025, which means many small parcels that used to bypass duties now get taxed. If you rely on frequent small shipments, your landed costs just went up. Model the impact by lane and SKU, then adjust pricing, MOQs, or fulfillment plans.

How should I plan supplier migration to lower tariffs?

Plan shifts in phases. Start with new products to test new suppliers, quality, and logistics without risking core revenue. Next, move standardized, high-volume items that are easier to replicate, while keeping complex SKUs with current suppliers until proven. This lowers risk and preserves service levels.

What data should I review monthly to stay ahead of tariff changes?

Track tariff rates by HS code, country of origin, and SKU-level duty spend. Compare your Shopify gross margins against updated landed costs to catch margin compression early. The article notes tariff rates changed 20 times this year, so set a recurring review and update your forecasts.

How do I know if I should change pricing versus cutting tariff costs elsewhere?

Run a margin model by SKU that includes the new tariff, freight, and fulfillment. If a small price change preserves contribution margin with minimal conversion impact, test it; otherwise, pursue HS code reclassification, near-shoring, or adjusting pack sizes to improve landed cost per unit. Always A/B test price changes on low-risk cohorts first.

What role should my customs broker play in reducing tariff exposure?

Ask your broker to pull your import history, validate classifications, and provide alternative HS code options with precedent from CBP CROSS. Have them flag SKUs with unusually high effective rates and document the justification for any reclassification. A strong broker is your best partner for both savings and compliance.

How can Shopify brands turn tariff work into a growth advantage?

Act faster than competitors by auditing tariff exposure at the SKU level, protecting margin on best sellers, and phasing supplier changes with minimal risk. Use the savings to fund ads or retention, then reprice strategically where needed. The brands that do the math and move first keep growth while others absorb the hit.

 

Need help with tariff-optimized fulfillment? Fulfillrite specializes in helping eCommerce businesses deal with US shipping and regulatory requirements. Request a quote to learn how we can help protect your margins while keeping customers happy.

Brandon Rollins, MBA, is the Director of Marketing at Fulfillrite. He typically writes about how eCommerce and crowdfunding brands can manufacture, freight ship, and fulfill products, as well as scale their businesses. You can find his work featured on Kickstarter.com, CrowdCrux, Retailbound, and Launchboom. He has been quoted in CMSWire, Quartz, Whatagraph, and Atlassian.