Lyn Nguyen is an eCommerce specialist who helps eCommerce businesses with their operations and logistics. In this piece, she explains how small eCommerce brands may be impacted by a second Trump presidency, and provides some recommendations to navigate the new geopolitical landscape.
With US President-elect Donald Trump returning to the White House today, eCommerce brands can expect significant shifts in trade policies and business operations. Small and medium-sized eCommerce businesses must strategically adapt to navigate tariffs, maintain profitability and ensure sustainable growth. Key considerations for this new geopolitical landscape include:
Trade policies and tariffs
The anticipated increase in tariffs on Chinese imports presents immediate challenges for eCommerce brands.
Companies face a critical decision – absorb higher costs in their operations or pass increases on to customers. Either choice will impact profitability, with customer price sensitivity being a crucial consideration.
Brands must carefully analyse their margins and market position to make informed pricing decisions.
Supply chain diversification strategies
Forward-thinking brands are already exploring alternative manufacturing locations to mitigate tariff risks.
Vietnam, South Korea and Japan have emerged as particularly attractive options, offering:
- Production timelines comparable to China
- Established manufacturing infrastructure
- Geographic proximity to existing supply routes
While India presents as another viable location, longer production cycles must be factored into inventory planning, along with tax and compliance requirements.
For brands with sufficient scale, reshoring production to the United States could eliminate tariff concerns entirely, though higher labour costs require a cost-benefit analysis.
Last mile logistics
Brands utilising drop shipping or direct injection models from China face heightened risks under stricter tax and trade policies, as well as customs regulation.
Some key challenges include:
- Increased shipping costs and extended lead times
- Higher risk of customs delays or seizures
- More complex compliance requirements
To overcome these risks, companies should consider establishing regional fulfillment centres in
strategic locations like Vietnam or other low-tariff countries.
Marketing strategy adjustments
With tariffs now potentially taking up a larger share of operating budgets, marketing efficiency is paramount.
If they haven’t already, brands should:
- Re-calculate their cost of delivery to figure out their margins for each product
- Audit current marketing spend and return on investment – adjust accordingly
- Explore cost-effective digital marketing strategies, like organic social media
- Focus not just on acquiring customers, but retaining them in a bid to increase lifetime
value
My final strategic recommendations
Supply chain optimisations:
- Prioritise Vietnam, South Korea and Japan for manufacturing relocation
- Evaluate production in the United States for high-margin products
- Expand procurement to reduce risk
Restructure your distribution network:
- Relocate drop shipping operations to Vietnam or Japan
- Assess Canadian warehouse options for North American distribution
- Implement robust inventory management systems
Financial planning:
- Re-calculate delivery costs and pricing strategies
- Build tariff impact into cash flow projections
Additional considerations:
- Build and strengthen relationships with alternative suppliers
- Review and update customer communication regarding potential delays
- Explore automation opportunities to offset rising costs
The changing political landscape presents both challenges and opportunities for eCommerce brands. Agility, strategic planning and careful cost management have never been more important. Those who actively optimise their operations while managing customer satisfaction will be best positioned for long-term success.
