Having worked with hundreds of DTC brands over the years, I’ve seen how external shocks can test even the strongest businesses. But here’s the good news – with the right approach, you can not only survive these tariffs but potentially gain an edge over less-prepared competitors.

1️⃣  Focus on Owned Marketing Channels

Convert paid traffic to owned contacts: When margins shrink from tariffs, expensive paid ads become even less sustainable. Your best move? Turn those paid ad clicks into email and SMS subscribers using interactive tools like Octane AI’s quiz functionality. This strategy:

– Captures valuable zero-party data about customer preferences
– Significantly lowers your effective customer acquisition cost
– Enables personalized follow-ups without additional ad spend
– Improves lifetime value through better targeting

Getting customers into your owned channels means you’re not paying twice to reach the same person – a must-have strategy when tariffs are eating into your margins.

2️⃣  Diversify Your Supply Chain

Implement a “China+1” strategy: If you’re heavily dependent on Chinese manufacturing, now’s the time to spread your risk. Consider:

– Shifting some production to countries with lower tariff exposure
– Splitting your manufacturing across multiple regions (maybe 70/30)
– Exploring nearshoring options in Mexico or Latin America
– Investigating domestic manufacturing possibilities

I’ve seen brands cut their tariff exposure by 40% by thoughtfully redistributing their manufacturing footprint across different countries. Start these conversations with potential new suppliers now – this process takes time.

3️⃣  Negotiate with Your Suppliers

Share the burden: You don’t have to absorb all tariff costs yourself. Your suppliers have a vested interest in keeping you as a customer. Try:

– Requesting price concessions to offset some tariff costs
– Negotiating extended payment terms (Net 60 or 90)
– Phasing in cost increases gradually
– Revisiting minimum order quantities

One of my clients successfully negotiated a 15% price reduction from their Chinese supplier, who recognized that keeping the business at a lower margin was better than losing it entirely.

4️⃣  Adjust Your Pricing Strategy

Get smarter about pricing: Rather than across-the-board increases that might shock customers, consider a more nuanced approach:

– Raise prices strategically on less price-sensitive products
– Bundle products to increase average order value
– Offer subscriptions to lock in recurring revenue
– Consider temporary “import surcharges” instead of permanent price hikes

Testing different pricing strategies across product categories can help you find the sweet spot where you protect margins without driving away customers.

5️⃣  Optimize Your Supply Chain Operations

Minimize tariff impact: Several operational tweaks can reduce your effective duty rates:

– Ensure proper HS classification of your products
– Explore Free Trade Zones for inventory storage
– Review where final assembly happens to potentially claim different origin
– Partner with 3PLs that specialize in tariff mitigation

These technical adjustments might sound small, but they can add up to significant savings when applied across your entire product line.

6️⃣  Cut Costs with Automation and AI

Trim internal expenses: When external costs rise, it’s time to look inward for savings:

– Use AI-driven forecasting to optimize inventory levels
– Automate customer service functions where possible
– Consider hiring international talent at lower costs
– Streamline marketing with AI-powered optimization

Every dollar saved internally helps offset the tariff impact on your margins. Many of the brands I work with have found that this forced efficiency drive actually makes them stronger in the long run.

My Final Thoughts

These tariffs are definitely challenging, but they’re also separating the strategic operators from the reactive ones. The brands that will thrive are those that see this as an opportunity to build more resilient businesses with stronger customer relationships.

Remember that your competitors face these same challenges – the difference is in how quickly and effectively you respond. Start with strengthening your owned marketing channels through tools like Octane AI’s quizzes, then work methodically through your supply chain and pricing strategies.

Want the complete deep-dive on protecting your Shopify store from tariffs?

Check out the full guide from Octane AI here: Protecting Your DTC Brand from Trump’s New Tariffs: A Survival Playbook