Tariffs are the new CAC

How savvy DTC brands are pivoting

Author

Aman Dwivedi
April 15, 2025

In partnership with

Welcome to DTC Mafia - your Tuesday breakdown of what's actually working in DTC and ecommerce, minus the fluff and buzzwords. At DistributionXL, we're not just talking about scaling businesses - we're doing it.

Let's skip the fluff and dive straight into what's moving the needle for ecommerce brands right now.

🚪 WHO WE ARE We help ecommerce brands scale through influencer seeding and social distribution. No retainers. No upfront fees. Just results that have helped businesses sell out inventory in months instead of years. Because why should only mega-brands get explosive growth?

. THIS WEEK'S BIG IDEA .

The Real Profit Killer No One Saw Coming

Remember when CAC was your biggest headache? Cute.

With Trump slapping Chinese imports with duties up to 145%, DTC brands are facing a full-blown supply chain apocalypse. But here's the thing – while everyone's freaking out, the savviest players in our network are treating this like the ultimate arbitrage opportunity.

Brands that rely on a single manufacturing source are dead in the water. The winners aren't whining about price hikes – they're completely rewiring their distribution systems overnight. And honestly? They're about to eat everyone's lunch.

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. DTC SIGNALS THAT MATTER .

  • 👑 Meghan Markle's As Ever: Launched a lifestyle brand with U.S.-made jams and teas that sold out instantly. Domestic production = no tariff drama. Genius timing or pure luck? Read more

  • 👞 Vivaia's NYC Takeover: Opened first SoHo store after their pop-up crushed it. DTC-to-retail done right for once. Full story

  • 🧵 Tumar Art Group's Global Push: Kyrgyzstan-based wool felting meets modern e-commerce. Gorgeous product, nightmare logistics. We're watching this one closely. The details

  • 📦 ThredUp's Secondhand Surge: Resale is absolutely exploding as consumers hunt for tariff-free alternatives. Your trash = their cash. Market response

. BEYOND THE HEADLINES .

The Tariff Pivot: Why Some Brands Will Crush It (And Others Will Die)

DTC founders are rebuilding their businesses from the ground up. The difference between winners and losers? Not what you'd expect.

What winners are doing differently:

  1. Multi-country manufacturing > China exodus: Amateurs are frantically Googling "factories not in China." Pros like Hikerkind already have manufacturing relationships across 3-4 countries. It's not about fleeing China – it's about never being hostage to any single country.

  2. Radical transparency > sneaky increases: Most brands are quietly bumping prices. But Labucq's straight-up telling customers: "We are raising prices 10% now, 10% in May." Their customers are actually thanking them. Seriously.

  3. Strategic price psychology > blanket markups: Made In won't touch their $99 price points, but they're moving $139 items to $149 without hesitation. Price psychology separates amateurs from pros.

  4. Quality preservation > corner-cutting: Mass market brands are about to serve up sketchy products. The brands we're betting on protect quality at all costs – even at the expense of margins.

The result? Mass extinction for lazy brands, market share grab for nimble operators.

. ACTIONABLE INSIGHTS .

  • Audit your entire supply chain this week - Not next quarter, not next month. NOW. The brands that win will identify every single component that touches China and have at least two backup sources lined up by end of month.

  • Segment your pricing strategy by price elasticity - Cart abandonment spiking at 70%? No shock there. Stop with the blanket price increases. We've seen conversion jump 22% when brands get surgical about which products can absorb increases vs. which ones can't.

  • Get obsessive about inventory forecasting - The brands in our network are running three parallel inventory models right now: best case, worst case, and nuclear apocalypse case. If you're not modeling multiple scenarios, you're flying blind.

  • Rethink your hero products - Is your bestseller the most vulnerable to tariffs? Time to push alternatives. We've seen brands completely flip their product mix in 30 days by pushing domestically-sourced alternatives through targeted email campaigns.

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