sex toys and tariffs

Hello Sellouts

Let’s talk about Tariffs. Again.

Yeah, I know, not even I want to discuss this topic but if you’re running an ecomm business right now, you need to stay up to date with what’s happening.

We’ve all had that “uh-oh” moment.

The headlines blared, Slack threads blew up, and everyone panic-bought inventory like it was March 2020 and the world was out of toilet paper.

But let’s be honest: the fear hit weeks ago. Now? We’re in the weird in-between.

Some brands raised prices. Others played it safe. A few are still pretending they’re immune because their supplier’s cousin’s warehouse is technically in Macau.

Unfortunately, the tariff rollercoaster isn’t done. And your customers are about to feel it whether you sell candles, socks, or something a little more battery-powered.

This week, we’re cutting through the noise and showing you how brands are actually winning the tariff game.

From transparency hacks to pricing jujitsu, here are the smart and scrappy ways ecommerce companies are adapting.

Let’s dive in.

What the Hell is Happening?

Let’s catch up on the latest; here’s the basics:

• Right now, nearly all imports into the USA have a 10% tax

• Right now, some products like steel & aluminum are at 25%

• Nearly all imports are set to increase to an average of 30-40% on July 8

• Chinese imports leaving China today will be taxed at 125%

Questions about your specific imports or industry? Check out ReedSmith’s amazing summary of all US tariffs, what is active, what is threatened and what has changed.

Nobody seems to know what is happening or what will happen tomorrow.

The president says he's actively negotiating tariffs with China. China says this is a lie.

Trump officials said there would be exemptions for electronics. Trump said they were wrong. Then there were exemptions. Now they’re promised to be “short-lived”.

By July 8, the US is expected to re-activate its tariffs, potentially back to rates that are unprecedented in modern history. That's in addition to 145% tariffs on Chinese imports.

Keeping up? Me neither.

Clearing Up Confusion

Here’s some common misconceptions I’ve seen across the news, LinkedIn and even business communications.

1. Tariffs on non-Chinese products were not all delayed

Yes, many extreme tariffs were delayed until July 8, but not Trump’s base-level tariff.

Importing almost anything from almost anywhere costs an extra 10%, the baseline tariff level set in February.

Those base tariffs are at 25% for steel, aluminum, cars and car parts.

2. Chinese tariffs do not only apply to goods from mainland China

The tariff was increased from 84% to 145% in April, and that wasn’t the only modification.

Now, any good shipped from Hong Kong and Macau are included, closing a loophole some industries were hoping would help them stay viable.

3. Prices have not already been factored into Chinese imports

The increased 145% Chinese tariff doesn’t apply to goods that were shipped before April 10, 2025.

It takes a typical ship up to 4 weeks to reach the US, and it can take another 2-4 weeks for those goods to start to reach end consumers (American businesses or consumers).

Goods shipping to the East Coast can take even longer.

That means your suppliers probably are not paying the full tariffs yet, and certainly consumers are not buying goods impacted by these tariffs.

You should plan to see prices – including domestic prices – continuing to increase as tariffs are factored in over several months or even years.

And that brings us to the main topic: how do you tell your customers?

Having a Tough Talk

In January, I encouraged you to consider overstocking to delay raising prices, a tactic which helped grow True Classic Tees into an apparel powerhouse during Trump’s first term.

Eventually, though, tariff costs will catch up to you whether you import or not.

When that happens, you need to ask three questions:

1. How much of the price increase can you eat yourself?

2. How should you increase your prices?

3. Should you warn your customers in advance?

You can mix and match these tactics. Depending on your ultimate strategy, you’ll need to inform customers without scaring them off.

Lower Margins for More Sales?

Most small businesses do not have the margins to simply eat the cost of tariff increases. But maybe you do… or maybe you’re not particularly dependent on imports.

If your prices will remain steady, you must message this as a selling point!

Consumers are scared about prices and are flocking to brands that can make promises about price stability.

Consider NextGenMobility, a direct-to-consumer distributor for high-speed electric unicycles (EUCs).

Although these products are built in China, they've sent out mailers, social messaging and even put a banner on their website promising "No Tariff Surcharges on any EUC". 

Their web traffic has grown over 30% since the Tariff announcements in February.

Customers are particularly vulnerable to switching brands during periods of price instability.

The last seller to increase prices will often get the largest bump in sales, and those new customers can stick with you long after tariffs have normalized.

When Hiding is Hurting

Let’s assume you need to increase prices. Maybe you need to increase them a lot.

How do you tell your customers?

Sex toys are the market to look to as an example:

• Almost exclusively manufactured in China

• Relatively high price points means big tariff impacts

• Luxury goods vulnerable to sales reductions

Let’s look at the good and the bad in messaging from Dame, a sex toy company.

At first, Dame’s approach was to add a Trump Tariff Surcharge: a $15 surprise fee at checkout.

They explained this fee to their loyal customers on social media, but didn’t make it clear on their site.

Hidden fees increase cart abandonment and damage brand trust. It’s also illegal in many states, including California, Massachusetts and Minnesota, which have price transparency laws.

Dame quickly walked back their approach and has since come out ahead by being more transparent.

Now, prices sitewide reflect post-tariff costs, but the Trump Tariff Surcharge remains in your cart (discounted to $0) to remind customers why prices are so high.

Since the change, Dame has been able to spin their approach into tons of free press, like this very newsletter!

When price increases are outside of your control, bring your customer along and preserve trust.

Whether as a surcharge or a sudden price increase, don’t surprise your customer with price increases.

Reward Customer Loyalty with Honesty

The best way to build brand trust and retain customers is being transparent.

Anybody who likes your brand enough to sign up for emails, follow on social media or read your blog deserves special treatment.

If you think your prices will need to increase eventually, you should be messaging now.

Rhône socks are dependent on imports from suppliers across Asia and South America.

They have no messaging about tariffs on their website or marketplace.

This makes sense: the price shocks hitting them are less severe than the China-dependent Dame example, and they likely have large inventories to act as a cushion.

But that does not mean they are ignoring the issue. They sent an honest warning to existing customers about possible price increases down the road.

The keys here are:

1. Early. If you wait until you know exactly what price increases are coming, then you probably waited too long.

2. Honesty. “I don’t know” are the three hardest words to say, but your fans will respond to your vulnerability with support.

3. Humanizing. Don’t write like an ad agency, write like a person. Show your customers that you care.

4. Re-engage. Give customers the opportunity to reach out to you. Most won’t, but it goes a long way if they feel that they’re your partner in navigating this tough situation.

Where Are Some Opportunities?

Think back to COVID, when looming price increases and a product shortages had people buying a decade’s worth of toilet paper.

There’s a lot of parallels to today and looming tariff impacts.

Americans and retailers are increasingly worried about the real threat of bare shelves and severe price hikes.

And that means panic buying.

For some brands, that also means selling the panic. Consider Inmotion Global, a personal vehicle seller taking the opposite approach from NextGen Mobility.

This is a dangerous strategy for two reasons:

The obvious risk is this explicit messaging may alienate customers who may be turned off by the tone.

Restrict this kind of messaging until after you’ve warned your customers about potential price changes.

This is also risky messaging for first-time exposures, so keep this to social media and emails… and usually keep it off of your website, paid marketing or promotions.

The less obvious danger is selling your pre-tariff inventory now will force you to increase prices sooner.

That means you’re less likely to look competitive against competition that dripped inventory out over a longer period while keeping prices low.

So when even consider such a sale?

Quickly turning over inventory can potentially help:

1. Get immediate liquidity many companies need to stock new inventory at higher prices

2. Empty warehouses to make room for new goods from updated suppliers

3. Get rid of surpluses and poor sellers by getting “on the fence” buyers to take the dive.

Giving your customers “one last chance” before an imminent price increase can also increase trust as opposed to just increasing prices one day.

Either way, this should be the last warning, not the first one.

A Shoutout to Our Writer & Sellout Updates

Since last autumn, this newsletter hasn’t been a solo effort.

My producer Ryan has been a partner whose insights have helped make keep this newsletter unique. His ideas, writing, market research, and insights have helped us stand out.

If you’ve enjoyed his work here, you can find him at his LinkedIn or message me directly for an intro. He’s a great talent, and I’d love to help get him some additional work!

As with Tariffs, change is constant and I’m looking at changing the format of this newsletter.

You’re going to continue to get weekly marketing, ecommerce and DTC business insights, but expect more direct interviews with ecomm founders, paid ads specialists and tips from supply chain teams.

While I prepare that content I’m taking a couple week’s break – I’ll see you back here in June.

Until next time, keep selling out. If you found this interesting, please share it with a friend and hit reply.

See you in June!

Luke

P.S. Can’t wait until June? Connect with me on LinkedIn and send me a message, I reply to them all.