Weekly Buzz 4/4/25: Big Tariff Trouble?!

Weekly Buzz 4/4/25: Big Tariff Trouble?! Bradley: The new tariffs announced this week have Amazon sellers up in arms. I'm going to show you some numbers on why it might not be as bad as you think and things that you can do to keep your profitability and avoid issues on Amazon. How cool is that? Pretty cool, I think. Hello, everybody, and welcome to another episode of the Serious Sellers Podcast by Helium 10. I'm your host, Bradley Sutton, and this is the show that is our Helium 10 Weekly Buzz, a special edition as a matter of fact. We already had our Weekly Buzz this week, but we are just coming almost live here with something else because for the first time in a while, there's something that has like the Amazon world kind of like up in arms, right? And everybody's worried about this one thing. And so when that happens, sometimes we'll go ahead and do two Weekly Buzz in one week to make sure that, you know, you guys know what's going on and like maybe take away some fears if some might not be warranted or verify some things that would help you guys clarify what is happening. And so in this Weekly Buzz, we're going to be talking about the new tariffs announced and what does it mean, what are people saying, what are people going to do, how can you protect yourself, things like that. So first of all, let's just talk about some things that were announced and let me just actually start with one thing that I don't hear too many people talking about but it kind of went under the radar but should make Amazon sellers very happy. You guys remember the weekly buzz a while back. We talked about how the de minimis law was finally taken away but then it was put back just a few days later. That's that loophole that Sheen and T-Move and Amazon wholesalers can use where they can ship stuff under $800 directly to US customers and bypass taxes and tariffs and things like that. It just goes directly. That's how people can sell stuff for like $6 on Timu shipped from China and even with the shipping and everything, they can still make a profit. Well, that's been gone or the taking away has not been there for like a couple of months already so that means the business as usual for Timu and Sheen and Amazon wholesalers. But take a look at this on WilmerHale.com, part of this announcement here. It says, on April 2nd, 2025, President Donald Trump issued an executive order imposing a 10% baseline reciprocal tariff. So we're going to talk about that later and an additional reciprocal tariff on 57 countries. But here it is. The second point here says, President Trump also issued a second executive order eliminating de minimis for all low value imports from China and Hong Kong effective May 2nd. So that is about one month from now and then De Minimis will go away for the rest of the world at a later date. So two things here. The number one is the new tariffs. We're going to talk a little bit about that. It pretty much covers almost all countries out there. But the second point here is this de minimis. So first of all, it's not all bad news. I mean, I don't think there's any Amazon sellers who are like, oh man, I really love that de minimis who live outside of China. If you live in China, yeah, you're probably like, this sucks. I'm not sure how I can sell. But what about the tariff? So just in case you guys haven't been watching the news or anything, Take a look at some of these stats here. It says seven of the U.S. top 10 trading partners are among the 57 countries facing an additional reciprocal tariff, 34% for China, which includes the baseline tariff and additional tariff, 20% for EU, 46% for Vietnam, 46%. So those of you like, oh, I'll just go get my products made in Vietnam instead of China, well, nope, that's not something that's going to really save you money. 32% for Taiwan, 27% for India. Again, that's a very popular place to manufacture products in India. 26% for South Korea. So that's what was kind of announced, okay? And this whole thing is always in flux. Whenever there's big trade wars and stuff, and guys, I'm no financial expert. I'm no legal expert. I don't know what kind of disclaimer I could say, like, hey, please don't take this as financial advice or whatever. I'm a layman when it comes to this, but I also read news, and things like this have happened, similar ones. These things are in flux a lot. I'm just recording this a few hours before it goes live. Who knows, by the time you guys are hearing this, something could have drastically changed, and one of the countries is like, all right, USA, we'll do whatever you want, and please take away our tariffs, and then President Trump says, okay, you're good, or President Trump says, you know, just kidding. This was my one day late April fools. Let's go ahead and take off this. Who knows what's going to happen, but let's just say, things are as is for the next few weeks or something. The question is rightfully, how do we as Amazon sellers deal with this? How is this going to affect things? Let me give you guys just some different numbers and talk a little bit about what I plan on doing, what I see in Facebook groups, our Helium 10 Facebook groups, what other members are doing, etc. First of all, you might see the word or the figure 10% tariff 30% you know 34 plus 10 you know that equals more than 50% plus another 10% you know it's over 50% and you might be like oh my goodness my product is $30 does that mean now I pretty much have to raise my price to a What's like 50% of $15 and so it's like what $45. I have to raise my price to $45. I have to raise my price from $30 to $50. I'll never be able to raise my price. That's terrible. That's not the case. I'm going to show you guys. Another thing to keep in mind is this is something that affects all sellers equally. All right, the Chinese sellers, they're going to have to pay this tariff, too. They ship their stuff to Amazon. There's no loophole to get around this. If they're using FBA, they're getting hit with the exact same tariffs that you are. All right. So it's not like some disadvantage for U.S. sellers like the de minimis rule. What's a disadvantage for US sellers? You know, because Americans can't take, you know, unless you're shipping from China, American and EU sellers, you know, can't necessarily take advantage of that. Right. So that one actually does disproportionately affect one group or the other. These tariffs is universal. Anything coming to the country. From these countries, everybody's going to have to react accordingly. So I saw a lot of sellers saying, oh, Chinese sellers aren't raising their price right now. Well, first of all, it's too early to say who's raising their price and not, you know, like nobody yet has been affected by this. Like literally, if they ship their products already, you know, the products that are in the FBA right now, you know, it's not like, oh, there's some tariff on the inventory that's already in FBA. No, it's for new shipments. Matter of fact, I called some shipping companies in China and said, hey, what about if there's a shipment on the water right now and it was paid DDP, meaning you prepay everything to the door of Amazon or to your door. Does this mean that there could be an extra bill that they're going to get for the customs? And they're like, hey, we honestly don't know yet, but we talked to our, you know, different forwarders and right now, no, because it was shipped already and it's already almost there. You're not going to have to pay. That one, I'm a little bit skeptical on. I'm like, are they just telling me what I want to hear to make me not worry? I would have thought that I would have to pay more. So that's something I'm definitely going to keep my eye on because I've got two shipments that I already paid for everything and it's about to arrive. I'm very curious. Am I going to have to pay like extra money? I would think so, but I don't know why the freight forwarders are telling me no, but let's take a look at that. But still, that's not even inventory that's here yet. So don't think that, oh, No China sellers are going to raise their price because I don't see anybody raising the price. No, we can't look at it that way. I mean, they've got probably a thousand units in Amazon already that they already paid, you know, like so this doesn't affect existing inventory. We can't yet look at, you know, how many people are going to, you know, change their price to kind of like have an idea of what's happening a month or two from now. With that being said, what do some of these prices mean? And I just made a kind of like a rudimentary spreadsheet here, all right? So here's a little spreadsheet I just put out. Again, I'm no mathematician here. I was rounding up some of these things and hopefully my calculations are correct. If it's not, let me know in the comments below. But this is just a general idea of how to kind of like visualize what these tariffs might be. Let's just pretend you had a product that you were selling on Amazon for $10 retail price, all right? Let's say your cost to manufacture it in China or some other country is $1. Let's say that all in, all your fees for Amazon is $6.50. That's like the shipping and whatever, your PPC, whatever. Devil's advocate here, let's just say it costs $6.50. That means your profit margin is $2.50 for each unit that you sell, which means you've got a profit margin of 25%. So this is kind of like a standard. Now let's just say that there was a tariff for 10% that was put on this country and then another new tariff for another 30%. I don't know of any countries with this exact numbers here, but it might be similar to the one for China or others, but this is just a way to look at it. That doesn't mean that you have got to raise your price 40%. Like, hey, your product price was $10 and now you've got to put it at $14 in order to stay profitable. No. What it basically means is it's based on the product cost, right? So let's just say that if it was $1 before, potentially with these new tariffs, your new product cost would be $1.40. It's based on, you know, it's 10% plus for a plus 30% a $1.40. Now, if the product price It's still $10. Let's say you don't change your price at all. What does your profit margin go to? It goes from $2.50 to $2.10 because it increased by $0.40. Your cost of goods sold. So your new margin, your profit margin is now 21% instead of 25. What would you have to do in order to get back to 25% profit margin? If you want to raise the price you've got to change the price to $10.50 so you would only need to raise the price by $0.50 in order to raise your profit margin from 21% back to 25%. Again, this is very rudimentary. There's much more advanced ways of accounting to calculate this out, but this just gives you a general idea. It's definitely different than I hear some people saying, oh, I have to raise my product cost or my price 40%. No, you don't have to. $0.50 is not much. Is this the end of the world to raise a product price $10 to $10.50? It might not be. Especially if everybody else is having to do it, right? Again, like this is something that's affecting everybody, all right? And if you don't... You raise your prices. Well, how much less profit are you having per unit? Let's say you don't even raise your prices. Well, you just got 40 cents less profit per unit. Now, this is different as the product price increases. So here's another example. Let's say your product price, you got a product like a coffin shelf that's $25, not $10, $25. Let's just pretend your product cost is $5, not $1, but $5. If your fees, your Amazon fees were $13.70, that means your profit margin is $6.30, 25% profit margin, $6.30 per unit. That's how much you make under the old way without tariffs. But now again, 10% profit or a 10% tariff is incorporated. Now all of a sudden you get a 30%, another additional tariff, right? Well, that makes your new product costs $7 instead of five. What happens if you do not increase prices at all? Well, instead of making $6.30 per unit, you're now making $4.30 per unit. So that means instead of a 25% margin, you've only got a 17% margin. So not like a life-altering thing to have 8% less margins. That's a lot better than having 40% less margins like some might have been erroneously calculated. So what would you have to raise your price of your $25 product in order to keep your old 25% margin? It would need to go to $27.50. So again, is raising the price from $25 to $27.50 the end of the world? For some, hopefully not. For others, maybe that's not great. But again, even at this astronomical 40% tariff, it's not like you are having to increase your prices by some astronomical amount. So again, that's just one way to look at it to kind of put in perspective what might happen, what you might have to do if you wanted to keep the same profit margins that you had. Now, the question is like, what are some things that you can do? One thing is talk to your supplier, talk to the freight forwarder, talk to your custom clearance person. Take a look at all your HS codes. A lot of times there are some HS codes where your base tariff, maybe you could actually save some money because it qualifies for a different HS code. I think it's called HS code, whatever the code is for, you know, that it has that decimal place and that like classifies what kind of product you have. There are some that maybe you're like, hey, I was in a wood shelf, you know, like a coffin shelf. But if I just change the HS code to a wood table top storage, I'm just making stuff up. It's you're not lying about it. You can't like lie and say, Oh, yeah, there's this coffin shelf is now electronic or something. But if it qualifies to be this other HS code, that HS code might have lower base fees. That can wipe off some of this tariff. That's just one thing. Negotiating with your supplier. Can you get discounts if you pay in the local currency? Maybe you've got some good currency conversion here. Ask your supplier, what if I pay in Chinese RMB? Or rupees in India. I think that's the currency that I'm not sure. Like, hey, can I save 1% here, 2%, 3%, 4% here? Because maybe if they're quoting you in dollars, they might be building in like a buffer for them because of the exchange rate fluctuations. So that could be a way to save a percent. percentage point here or there. Obviously, as we just talked about, raising prices down the road or now could be something that is done. Some people might raise prices now, little by little. Why do you want to raise price little by little? If you were going to raise the price true to $3, you got to be careful. I would not go from $10 to $13. Well, first of all, I don't see why you would need to want to do that. As I said, even with 40% tariffs, You might only need to raise your price 50 cents, 60 cents to make your same profit, but for whatever reason, let's just say that's not the case or you're getting your products from some country that has a ridiculously high tariff, you don't want to raise your price by 20%, like go from 10 to 12. Why? Because a lot of times what might happen is buy box suppression. If Amazon thinks you're price gouging, Amazon will take away your buy box if you increase it too much. By the way, if you want to make sure that that's not happening, sometimes it doesn't happen immediately. Sometimes Amazon looks at your price increase and says, oh yeah, this is something that we think doesn't merit buy box. It happens later on, right? So just FYI, most of you guys have Helium 10, Platinum plan, all plans. Make sure you have alerts active on all your products, whether you're increasing prices or not. Always have alerts on. Turn on your alert for buy box, all right? Buy box notification. If you lose the buy box, it's not just about losing the buy box to another seller. If the buy box disappears, hit the settings and make sure that you have the alert on so that you can get a text message or an email as soon as that happens, all right? So that'll help protect you for that. But yeah, so raising price is definitely an option. Now, I made this poll in the Helium 10 Facebook group. I'm like, hey, what are you guys going to do about these tariffs? What's your gut reaction? And take a look at this. We've got 45% said, you know what, I'm going to wait until I have to start paying the tariffs. In order to raise prices. 25% said, I'm immediately raising the prices. 10% says, you know what, I'm not going to raise the price at all. It doesn't change my cost too much. 10% said, I'm going to start to look at other countries outside of China to manufacture. And then 5% said, you know what, I might have to discontinue some low margin products in order to, because like the tariffs just make it impossible to sell. So, you know, a lot of people have different strategies. Now, like I said, some people are worried that, hey, the Chinese sellers or my competitors aren't raising their prices. Well, if you're just like waiting to see what they're going to do and maybe you don't want to raise your prices and so the competitors, that's actually not a bad idea. Like if you're the only one who raises their price, that's probably going to kill your conversion rates, right? But one thing you can do is, hey, make sure you have like your competitor alerts turned on. That's in your insights dashboard. If you're in your insights dashboard, if you've got a Helium 10 diamond account, make sure to go in and first have your competitors specified. I've got this bath mat right here and I put as my competitors the other bath mats, okay? And we are going to be checking, are they running coupons? Is their price going to change? And so you're going to want to go into your insights and then create a new insight that is based on your competitors and then make sure that it's activated. If a competitor changes price or adds a coupon, you get an alert for that. And then, hey, as soon as they raise their price, then you can too. Or maybe you're like, maybe they're waiting for me to raise my price and then you're okay with being the first one, but you would kind of want to see after a day or two, do they raise their price? Well, we'll turn that alert on in your insights dashboard and you'll be able to see if they add a coupon or change their price. So anyways, guys, I know this is kind of maybe jarring regardless of what I talk about here, like what's going on and maybe have you worried, but I hope I was able to illustrate a little bit that when you see numbers like 40%, 54%, 60%, it does not mean that in order to be profitable, you've got to raise your price by 60%. Absolutely not. You should never under any circumstance raise your price any more than like even 20% at once because again, like I said, you might lose the buy box. So I hope some of this put it in perspective but it is valid to be concerned about what is going on and if your costs are going up but there are some things that you can negotiate to help mitigate, you know, maybe a few percent here or there hopefully. At the end of the day, if you do raise your price, yeah, you know what, raise your price 50 cents, a dollar and keep those. But the key is making sure you're not going against Amazon's policies by raising the price too fast or Amazon punishes you by taking away the buy box. So keep up to date on what's going on with your buy box. Keep up to date with your competitors, what they're doing. And let's talk about this in a week or two. Let's see what you guys are going to do. And who knows, maybe nobody's going to have to raise their price for another month or two. If this is still going on, nobody knows what's going to happen with these tariffs or with the culmination. Who knows, the tariffs might even go up even more temporarily. But again, guys, this is something, one of the key things is that affects all sellers equally. All sellers from who make their products in one country. Obviously, the tariff for India is a little bit different than Vietnam, it's a little bit different than China, but it's not like one country has an advantage over the others. Before, China had the worst tariffs and that's why a lot of people were going to India and Vietnam. But now, as you can see, at least for now, a lot of the tariffs are hitting these countries pretty hard regardless of what country it is. So what does that mean? That means everybody's going to have to raise their price or take less margins accordingly. So keep your chin up, guys. Things are not, it's not the end of the world. I'm sure things will work themselves out or I hope things will work themselves out eventually. Keep up the good work with your selling and we'll see you guys in the next episode.