As global trade tensions escalate and tariff policies shift, ecommerce businesses are facing mounting pressure to safeguard their margins. In what many are calling the early stages of a modern-day trade war, tariffs are driving up the cost of goods for brands that rely on global supply chains.

According to Clearco’s recent study of 97 U.S.-based ecommerce founders and decision-makers, 80% of brands have responded by raising prices. With cross-border sourcing now significantly more expensive, pricing adjustments have become essential for maintaining stability and absorbing operational cost increases.

Ecommerce Margins Under Pressure from Global Tariffs

Tariffs and global economic factors are placing increasing pressures on businesses, from increased supply chain costs from imposed tariffs, cross-border logistics uncertainty, and rising inflation tied to evolving economic shifts. Ecommerce brands who rely on offshore manufacturing and merchandising are among the most affected, with many already feeling the impact through shrinking margins and disrupted operations. Ecommerce businesses are seeing a drop in profits from consumers deciding to forego smaller luxuries, changing their overall consumer behaviour. 

Outside of necessary purchases, such as gas for transportation or groceries, many consumers are feeling the effects of rising prices firsthand and are beginning to pull back on discretionary spending. From this, smaller businesses in particular are feeling the pain, with FedEx’s 2024 Small Business Trade Index reporting that over two thirds of small and medium sized U.S. businesses rely on global imports for their merchandise production and distribution. 

As a result, these business owners are faced with two choices, raise their product and service prices for consumers due to tariffs, or eat the costs and lower their margins. This inflation of pricing, although unattractive to consumers, may be the only solution for a brand’s long-term stability during the trade turbulence that has abruptly shifted the market. 

What the Data Tells Us: Raising Prices Is the New Normal

Clearco’s survey found that the vast majority of high-revenue ecommerce brands are actively adjusting pricing strategies. 80% of businesses surveyed have already raised prices, with increases typically ranging between 5% and 15%.

This widespread price increase is not unusual, as the action comes in reply to the noteworthy disruption many businesses are facing today across all industries, particularly those who deal in supplies for automobiles, homebuilding, consumer electronics, and retailers. Primarily driven by inflation, tariffs, rising material costs, and supply chain disruptions, ecommerce businesses who rely on global imports to sustain their operations are strategically planning to protect their margins and bottom line. Smaller businesses are also particularly feeling the pressures, stating the tariffs will have a devastating impact and costing up to an additional $630,000 in fees over the next year. 

With U.S. consumers largely being burdened by higher prices on everyday items, economists are estimating that tariffs could cost up to $1,700 annually for the typical household. As the majority of brands increase their costs, one could assume consumers would expect and understand this shift. However, many shoppers remain price-sensitive, especially in uncertain economic times, and may respond by delaying purchases, or reducing overall spending. 

While consumers may expect some pricing shifts as brands respond to global pressures, the balance between business sustainability and customer retention remains more delicate than ever.

Funding as a Strategic Tool in a Trade War 

To cope with these costs and avoid eroding margins, many businesses are scaling back expansion plans. However, this does not need to be the case. As a result of the shifting market, 59% of businesses are actively seeking funding to support their brand despite the economic uncertainty. This uncertainty is proving to actually be a driver in funding pursuit, with nearly 60% of business owners searching for funding solutions to support their efforts during these challenging conditions. Despite the market volatility, only 1% of business leaders surveyed were unaware of funding options, signaling financial literate leaders are still poised for operational growth. 

Those looking for scaling opportunities and capital buffers can leverage fast funding partners such as Clearco’s funding to maintain their growth trajectory. Equipped with non-dilutive funding, brands can offset their tariff-related expenses and use additional capital to reinvest in their business for strategically planned long-term solutions. Rather than passing costs onto consumers, brands can consider exploring alternatives such as local sourcing, bulk inventory orders, leveraging industry resources to strategically pivot and protect their margins. 

Clearco’s Support: Book a Free Tariff Assessment 

Rising tariffs are testing the resilience of ecommerce brands across industries. To help ecommerce businesses plan their next move, Clearco now offers free tariff assessments. 

With smart funding strategies, pricing flexibility, and long-term planning, founders can turn this pressure into an opportunity to streamline operations and position their brand for success.

Ready to protect your margins and fund your next move? Let’s take your ecommerce brand into its next chapter — confidently and capital-ready.

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