AMA Recap | Tariffs impact and dropshipping insights with Zopi

[Zopi]

Questions List

General Impact of Tariffs 

Q1: How does Trump’s policy affect dropshippers, how much will costs increase, and what alternative markets should we target besides the US? 

Q2: How will tariffs affect Canadian dropshippers shipping from China to the U.S., and will U.S. customers have to pay customs (10%)? 

Q3: How will tariffs on products from China and Canada affect my store if I sell only in the U.S.? If I raise prices, will I lose to big retailers? 

Q4: How can we check which products or suppliers are affected by tariffs to avoid unnecessary price increases? 

Product Categories 

Q5: Which product categories are most affected by recent tariffs, and should we avoid them? 

Q6: How will U.S. tariffs impact my UK-based clothing and accessories print-on-demand shop that ships only to U.S. customers? 

Pricing & Profitability 

Q7: Will tariffs be applied to the FOB cost or the retail price? 

Q8: How much should we increase product prices or adjust shipping costs to stay profitable? 

Q9: How should merchants adjust pricing strategies to maintain profitability amid rising costs? 

Q10: How should dropshippers adapt to new U.S. tariffs? Should we stop targeting the U.S. due to tariffs, and how are customers reacting to price increases? 

Logistics & Fulfillment 

Q11: What settings or apps allow stores to limit sales to U.S. customers only? 

Supplier Negotiation & Sourcing 

Q12: What key factors should we consider when discussing pricing, bulk buying, and shipping costs with suppliers? What steps can we take to ensure product quality and lead times remain consistent despite cost changes? 

Q13: How can dropshippers negotiate better deals with suppliers to offset tariff increases? 

General Impact of Tariffs

Q1: How does Trump’s policy affect dropshippers, how much will costs increase, and what alternative markets should we target besides the US?

A: Trump’s tariffs on imports from China, Canada, and Mexico have increased costs, tightened profit margins, and caused potential shipping delays due to customs fees.

How to adapt:

• Source from suppliers in non-tariff countries or local suppliers to avoid extra costs.
• Adjust pricing strategies to offset increased expenses.
• Negotiate better deals with suppliers to maintain profitability.
• Explore alternative markets outside the U.S. for more stable operations.

Q2: How will tariffs affect Canadian dropshippers shipping from China to the U.S., and will U.S. customers have to pay customs (10%)? 

A: Dropshipping from China to the US comes with tariff challenges. 

• Imports from China to the U.S. may face 10–25% tariffs, often passed on by suppliers.
• Orders under $800 usually avoid duties, but higher-value shipments may require customers to pay customs fees.
• U.S. regulations mandate clear labeling of the product’s origin, which could impact customer perception and delivery times.

Q3: How will tariffs on products from China and Canada affect my store if I sell only in the U.S.? If I raise prices, will I lose to big retailers?

A: Tariffs on imports from China and Canada can increase costs and impact pricing competitiveness, but there are ways to stay ahead.

• Orders from these countries may face higher costs and longer shipping times.
• Compete beyond price by enhancing customer experience—better packaging, curated bundles, or personalized touches.
• Adjust sourcing and pricing strategically to maintain profitability and build customer loyalty.

Q4: How can we check which products or suppliers are affected by tariffs to avoid unnecessary price increases?

A: Tariffs vary by product and country of origin, so not all items are affected. Use tools like the WTO Tariff & Trade Data platform or the Tariff Analysis Online tool to check specific rates.

How to stay competitive:

• Calculate total costs, including tariffs, before pricing.
• Be transparent with customers about price changes.
• Emphasize unique products and excellent service to justify pricing.

Focusing on value, not just cost, helps maintain customer trust and sales.

Product Categories

Q5: Which product categories are most affected by recent tariffs, and should we avoid them?

A:  Tariffs impact various consumer products, but instead of avoiding them entirely, smart adjustments can help minimize costs.

Most affected categories:

• Electronics: Laptops, tablets, smartphones, and gaming consoles face higher costs.
• Automobiles: Vehicles and parts see price hikes, with some models increasing by up to $12,200.
• Groceries: Certain food imports from Canada and Mexico may rise in price.
• Steel & Aluminum Products: Expanded tariffs affect goods made from these materials.

How to manage costs:

• Diversify suppliers to reduce tariff exposure.
• Source locally to avoid import fees.
• Adjust product designs with lower-tariff materials.
• Stock up before tariff increases.
• Negotiate cost-sharing with suppliers.

By implementing these strategies, you can better handle the situation and minimize its effect on our business.

Q6: How will U.S. tariffs impact my UK-based clothing and accessories print-on-demand shop that ships only to U.S. customers?

A: U.S. tariffs may affect your pricing depending on who handles the import process - either you or your print-on-demand partner.

Key considerations:

• Cost impact: Production, shipping, tariffs, and currency exchange rates influence pricing.
• Who pays tariffs? The U.S. imposes tariffs, typically paid by the importer (your business or your print partner).
• Staying informed: Check updates from USTR (United States Trade Representative), US Customs and Border Protection (They have the nitty-gritty on import rules), and industry news.
• For Clothing & accessories specific: Tariffs vary based on materials and trade deals; confirm with your supplier. Make sure you understand the HS codes used for your products, as these determine your tariff rates. If you're responsible for tariffs, include these costs in your pricing to safeguard your profit margins.
• Minimizing costs: Factor tariffs into pricing or consider U.S. based POD services to avoid import fees.

Proper planning ensures your business stays profitable despite tariff challenges.

Pricing & Profitability

Q7: Will tariffs be applied to the FOB cost or the retail price?

A: Tariffs are applied to the Free on Board (FOB) cost, not the retail price.

Key points:

• FOB cost basis: Tariffs are calculated on the product’s cost before shipping.
• Includes: Product price, packaging, and freight charges at the export point.
• Excludes: Retail markup or post-import costs.

This means that the tariff is calculated based on the value of the goods at the point of export before they are shipped to the importing country.

Q8: How much should we increase product prices or adjust shipping costs to stay profitable? 

A: Ensure profitability by calculating total costs (supplier price, shipping, tariffs, transaction fees) and applying a profit margin (e.g., 20-30%).

Here's an example:

Product Costs:

• Product cost: $20
• Shipping: $5
• Tariffs: $3
• Transaction Fees: $2

=> Total Cost: $30

• Desired Profit Margin: 25% 

-> Selling Price (25% Margin): $30 + $7.50 = $37.50

For shipping:

• Cover actual costs while staying competitive.
• Consider tiered pricing or slight markups, ensuring transparency to prevent cart abandonment.

Regularly review costs and adjust as needed to maintain profitability.

Q9: How should merchants adjust pricing strategies to maintain profitability amid rising costs?

A:  Gradually increase prices instead of sudden hikes, ensuring value perception remains high.

Key Strategies:

• Know Your Breakeven Point: Set a strong pricing foundation.
• Highlight Value: Emphasize quality, uniqueness, or added benefits.
• Use Bundling: Offer product bundles to increase perceived value.
• Introduce Premium Options: Cater to customers willing to pay more.
• Optimize Shipping Costs: Ensure they don’t eat into margins.

Balance competitive pricing with profitability to keep your business thriving!

Q10: How should dropshippers adapt to new U.S. tariffs? Should we stop targeting the U.S. due to tariffs, and how are customers reacting to price increases?

A: To adapt to the new U.S. tariffs, dropshippers can consider the following strategies: 

Adapting to New Tariffs

• Diversify Suppliers: Source from U.S. or alternative countries to avoid tariffs and improve shipping times.
• Monitor Tariff Changes: Stay updated on policies affecting Canada, Mexico, and other trade partners.
• Adjust Pricing Strategically: Raise prices gradually while maintaining competitiveness.
• Focus on Domestic Products: Prioritize U.S.-made or non-tariffed goods to stabilize costs.

Removing the U.S. from your target market might not be necessary. The key is adjusting sourcing and pricing strategies rather than abandoning a profitable market.

Regarding to the customers reaction about price increase

• Short-term: Many customers tolerate slight price hikes, especially if alternatives are limited.
• Long-term: If prices remain high, consumer demand may decline.

Here are some strategies based on recent trends:

• Emphasize Value: Highlight quality, unique features, or brand trust.
• Offer Tariff-Free Alternatives: Provide products less affected by tariffs.
• Enhance Loyalty Programs: Encourage repeat purchases to offset higher prices.

By being proactive and transparent, you can mitigate the negative impacts of tariff-driven price increases on customer conversions. 

Logistics & Fulfillment

Q11: What settings or apps allow stores to limit sales to U.S. customers only?

A: If you want to restrict sales to US customers only on your Shopify store, there are several effective options:

1. Shopify Markets: Go to Settings > Markets and set the United States as your primary market. Deactivate or remove other regions to ensure only U.S. customers can access your store.
2. Shipping Zones: In Settings > Shipping and Delivery, create a shipping zone exclusively for the U.S. and remove all other countries. This prevents non-U.S. customers from completing a purchase.
3. Payment Gateways: Some payment gateways allow you to restrict transactions based on the customer's location. Configure your payment settings to accept payments only from US-based customers.
4. Product Shipping Profiles: For individual products, you can create custom shipping profiles that limit availability to the US. This is useful if you have specific items that can only be sold domestically.

Supplier Negotiation & Sourcing

Q12: What key factors should we consider when discussing pricing, bulk buying, and shipping costs with suppliers? What steps can we take to ensure product quality and lead times remain consistent despite cost changes?

A: In addition to factors like pricing, bulk purchasing, shipping costs, and customs, here’s an additional checklist for your consideration:

1. Product Quality and Consistency

• Establish clear quality control standards and share them with suppliers.
• Request samples before making bulk purchases and conduct random quality checks.
• Ask for real images/videos of the actual products.
• Monitor customer feedback and inspect return/refund rates for quality issues.

2. Lead Time and Supply Chain Stability

• Verify suppliers' production capacity and ability to scale during demand surges.
• Ask about backup plans for raw material shortages or shipping disruptions.
• Choose suppliers with multiple warehouses or reliable third-party logistics (3PL) partners.
• Track past on-time delivery rates and hold suppliers accountable for delays.

3. Contract Terms and Flexibility

• Negotiate bulk order discounts while ensuring pricing stability.
• Set up penalties for delays or quality issues in contracts.
• Ensure payment terms align with your cash flow needs (e.g., deposits vs. full payments).
• Discuss potential cost fluctuations due to tariffs and raw material prices.

4. Alternative Suppliers and Markets

• Research suppliers from countries with lower tariffs or free trade agreements.
• Compare costs and lead times between multiple vendors to create fallback options.
• Consider regional fulfillment centers to reduce international shipping costs.
• Test alternative products from different suppliers to ensure supply chain resilience.

 To confirm product quality, you can: 

• Build Relationships with Suppliers: Establish strong communication and trust with your suppliers to ensure they understand your quality expectations.
• Request Product Samples: Ask for physical samples to inspect the actual quality of the products they are offering.
• Obtain Real Images or Videos: Request clear images or videos of the product from different angles and conditions.
• Check Reviews and Ratings: Analyze customer reviews and product ratings to get unbiased feedback on quality.
• Monitor Consistency Over Time: Regularly verify that the quality of delivered products matches your initial standards.

To assess supplier lead-time reliability, you can: 

• Prioritize Suppliers with Multiple Warehouses: Choose suppliers that operate warehouses in multiple regions to enhance fulfillment flexibility.
• Look for Quick Preparation Times: Target suppliers who can prepare orders within 24 hours to ensure fast processing.
• Evaluate Shipping Partnerships: Check if the supplier collaborates with multiple reliable shipping carriers to provide timely deliveries.
• Review Historical Performance: Analyze the supplier’s past delivery records to assess their reliability.
• Communicate Expectations and Monitor Performance: Maintain open dialogue to address potential bottlenecks and track delivery times regularly.

Q13: How can dropshippers negotiate better deals with suppliers to offset tariff increases?

A: To negotiate better deals with suppliers and offset tariff increases, you can try a few strategies.

1. Commit to Higher Order Volumes or Long-Term Contracts

• Secure better per-unit pricing by committing to bulk purchases.
• Negotiate long-term agreements for more stable pricing and priority treatment.

2. Share the Tariff Burden with Suppliers

• Propose splitting the tariff cost to reduce the impact on your business.
• Work collaboratively with suppliers to find cost-saving solutions.

3. Explore Alternative Sourcing Options

• Look for suppliers in countries with lower or no tariffs.
• Compare pricing from different suppliers to create leverage in negotiations.

4. Negotiate Better Payment Terms & Value-Added Benefits

• Request extended payment terms for better cash flow flexibility.
• Offer early payment in exchange for price reductions or shipping discounts.
• Ask for discounts on slow-moving inventory to increase savings.

By maintaining a collaborative tone and focusing on long-term partnerships, you can negotiate better deals and offset the impact of rising tariffs.

[GizmoGadgets]

Hi, 

i would like to know the tarriff now impacts on our online store? my store is going to go live next week, but due to the tarriff these two days it is going up to 145% on the china imports to USA. i am wondering how i should mark up the price of the products selling to USA? do i need to mark up extra 145% on the usual on the products? what should we do now? Please help. Thanks. 

GG

[Zopi]

Hey Gizmo - you're definitely not alone in feeling concerned. The recent tariff hikes (up to 145% on some Chinese imports) are a big shift for online sellers, especially dropshippers.

Here’s what you need to know and do:

1. Not All Products Are Affected

First, check if your products fall under the specific tariff categories. The 145% increase doesn’t apply to everything from China — it mostly targets specific electronics, solar panels, batteries, and EV components.

👉 If you're selling general consumer products (like fashion, home decor, accessories, etc.), your items may not be impacted at all. It’s worth checking the updated USTR tariff list or asking your supplier directly

2. You Don’t Need to Mark Up 145% Across the Board

Even if a product is affected:

• The tariff is applied at the importer level (mostly for bulk shipments), so many suppliers will adjust prices slightly — not 145% overnight.

• Instead of increasing your price 1:1 with the tariff, focus on:

  • Re-evaluating your cost per product

  • Checking if your supplier has raised the price already

  • Adjusting markup based on actual product cost + your desired margin

Keep your pricing flexible and test reactions — you don’t want to price yourself out of the market too quickly.

3. What You Can Do Now

• Talk to your supplier: Ask how they’re handling the new tariffs and whether your product costs will change.

• Test alternate sourcing: Look for suppliers from countries not affected by tariffs (like Turkey, or the US - You can come to Zopi and find source "Made in USA").

• Watch product categories closely: Especially if you’re importing electronics or high-ticket items.

You’re launching at a tricky time, but being proactive now will save you a lot of stress later. Let me know what kind of products you're selling.