Seller Fulfilled Prime (SFP) & Premium Shipping Requirements Are Changing June 29, 2025: A Side-by-Side Deep Dive

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Starting June 29, 2025, Amazon is rolling out tighter performance guardrails for two of its marquee shipping programs: Seller Fulfilled Prime (SFP) and Premium Shipping. Seller Fulfilled Prime work refers to the process by which eligible third-party Sellers can fulfill Prime orders directly from their own warehouses, provided they meet Amazon’s strict performance requirements. For Sellers, these changes aren’t mere tweaks; they reshape how you qualify, stay in, and recover from hiccups in these programs. Below, we’ll walk through each key requirement as it stands today versus what you’ll need to hit after the effective date, with real-world examples to illustrate exactly what’s at stake. For a rundown of all program requirements, see the full Seller Fulfilled Prime Program and Premium Shipping policies.

Trial Enrollment & Graduation Windows for Seller Fulfilled Prime

Today:

  • You can request a 30-day SFP trial any time.
  • The SFP trial period lasts for 30 days and includes specific performance metrics that must be achieved to qualify for official enrollment in the program.
  • Graduation from trial depends solely on meeting performance metrics during those 30 days.

After June 29:

  • Three Trials Max per Year: You’ll be capped at 3 trial attempts in each calendar year. Any trial that begins before June 29, 2025 doesn’t count toward this limit.
  • Quiet Periods Around Major Events: If your 30-day trial spans the 30 days leading up to Prime Days, Black Friday through Christmas, etc., you cannot graduate. This ensures Sellers are battle-tested before the busiest season.

Sellers must successfully complete the trial period by meeting specific performance requirements to gain access to Prime branding.

Why This Matters: Imagine you enroll in an SFP trial mid-October, aiming to graduate in time for Black Friday. Under the new rule, even flawless performance won’t earn you Prime status, you’ll have to re-enroll after the holidays. Plan your trials for quieter times (e.g., late January) to avoid losing a precious attempt.

Monthly Volume & Enrollment Requirements

Today:

  • There’s no fixed minimum monthly SFP volume.
  • If you miss on-time metrics, Amazon sends warning emails, but your enrollment status remains until metrics severely degrade.

After June 29:

  • Minimum 100 SFP Shipments/Month: You must deliver at least 100 Prime-eligible packages each calendar month, spread reasonably across weeks, to maintain the Prime badge.
  • Dynamic Order Limits: Fall below 100 (or cluster all shipments in one week), and Amazon will impose a reduced daily Prime order limit until you return to consistent volume.
  • Exemption for Fix-Ups: If you get a second warning for missing any metric, you can pause Prime (no shipments) for a week to get your house in order, and that period won’t count against your enrollment.

Practical Example: You shipped 15 Prime packages in the first 3 weeks of May, then scrambled to ship 90+ in the final week. In June, you’ll wake up to find your Prime orders capped at a fraction of normal volume. Better to target 25–30 SFP orders per week and build in some slack.

Size-Tier Misclassification & Network Disruptions

Today:

  • Listing ASINs in the wrong size tier might trigger warning emails, but rarely leads to immediate suspension. Misclassification can also result in higher storage fees, impacting overall profitability.
  • Late deliveries during huge storms or carrier outages may or may not be excluded automatically.

After June 29:

  • Strict Misclassification Guardrails: Repeatedly offering a product under the wrong size-tier can lead to blocking of SFP offers or Prime status suspension/revocation for those ASINs.
  • Automatic OTDR Exclusions for Major Disruptions: Clearer language confirms that any late deliveries from Amazon-identified large-scale carrier or weather events are excluded from your OTDR automatically.

Scenario: You classify a product as having larger dimensions to qualify for the less strict performance requirements that apply to a larger size tier. After three such mistakes, Amazon silently blocks Prime on that ASIN. You’ll need to correct the tier and appeal to restore it—costly downtime.

Appeals Process Overhaul

Today:

  • You have a sliding window to dispute removals, but timelines and submission limits are vague.

After June 29:

  • 14-Day Filing Window: From the date you receive a notice (e.g., “Your SFP status is paused due to low OTDR”), you have 14 calendar days to open an appeal.
  • 4-Day Response to Requests: If Amazon asks for more details, you have 4 days to reply, or your appeal is closed.
  • Limit of 3 Appeals/Quarter: You can file up to 3 appeals per quarter (overturned appeals don’t count). Appeals require supporting data (order IDs, tracking numbers, ZIP codes, proof of carrier delays).

Why It’s Tougher: Say your OTDR dips because a regional carrier hub froze over two days. You’ll need to create a case including tracking scans, carrier advisories, and order logs quickly, or forfeit that appeal.

OTDR Protection via Amazon-Managed Shipping Tools

Today:

  • If you use Amazon Buy Shipping and meet delivery cut-offs, late deliveries often still count against you unless you separately request exclusions.

After June 29:

  • “OTDR Protected” Labels: If you enable Shipping Settings Automation in your Prime templates and purchase “OTDR Protected” labels through Amazon Buy Shipping, any late deliveries on Standard (for SFP) or Premium shipping won’t hurt your OTDR.
  • Continued Exclusion of Major Disruptions: Same carve-out for large-scale network events.

Bottom Line: Automate shipping profiles and purchase labels using Buy Shipping API, and you effectively get “insurance” against minor late-delivery slips.

Premium Shipping Changes

Amazon’s Premium Shipping program (items promised in 1–3 business days) gets its own tightening:

Requirement
Today
After June 29
OTDR Threshold
97%
93.5%
Measurement Window
Rolling 30-day period
Weekly (Sun–Sat)
Enforcement Steps
Removal upon sustained dip
3-strike system:
1st miss – warning email
2nd miss – warning email
3rd miss in 4 consecutive weeks – removal
Warning Reset
None
4 consecutive perfect weeks clears prior infraction

Key Impact: Under the new cadence, a single bad week can put you on notice, and three such weeks in a month spells immediate removal from Premium Shipping. You’ll need more consistent performance throughout each month, not just a healthy 30-day aggregate. Sellers must successfully complete the new performance metrics to maintain their status in the Premium Shipping program.

Putting It All Together: A Seller’s Checklist

  • Schedule Your SFP Trial Smartly: Avoid major sale seasons; plan for Q1.
  • Lock Down 100+ Prime Shipments/Month: Automate your SFP orders to spread volume evenly across weeks.
  • Clean Up Your ASIN Tiering: Audit listings for correct size tiers and package profiles.
  • Enable Shipping Automation + Protected Labels: In Seller Central > Fulfillment Settings, turn on SFP/Premium templates and default to OTDR-protected labels.
  • Monitor Weekly OTDR: Invest in an operations dashboard that can track your OTDR by week for both SFP and Premium orders.
  • Prepare an Appeals Kit: Create a template for submitting an appeal with sections for order logs, tracking scans, and carrier advisories so you can file within 14 days. Cases created after 14 calendar days will not be considered.
  • Build in Buffer for Disruptions: If a regional snowstorm hits, pre-notify Amazon to be considered for exemption from performance defects proactively. Consider outsourcing your SFP fulfillment to a distributed fulfillment network that organically solves for carrier network disruptions and ensures the highest performance metrics for continued program eligibility and enrollment.
  • Understand SFP Program Requirements: Familiarize yourself with the stringent requirements of the SFP program and adapt to changing Amazon policies to maintain your SFP status.

Final Thoughts

These new Seller Fulfilled Prime (SFP) and Premium Shipping requirements underscore Amazon’s push for ultra-reliable, ultra-consistent delivery, a win for customers, and a heavier lift for Sellers. But by meeting these new standards, (whether independently or with the help of a distributed fulfillment network), Sellers can maintain access to Prime branding and the substantial customer base of Amazon Prime members, mitigating the risk to the sales opportunities afforded by the Amazon Seller Fulfilled Prime Program.

By understanding the before-and-after, planning trial timing, automating wherever possible (especially Prime shipping options), and building a rapid-response appeals process, you can not only stay enrolled in SFP and Premium Shipping programs but thrive in them.

Written By:


Indy Pereria

Indy is the Head of People Operations at Cahoot, fosters innovation, develops recruitment strategies, and scales the company’s culture.

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Sustainable Returns: Eco-Friendly Strategies for Ecommerce Stores

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As the world increasingly prioritizes environmental sustainability, ecommerce businesses are under growing pressure to reduce their environmental footprint. While online shopping offers convenience, it also comes with a significant environmental impact, especially in the ecommerce returns process. Returns are inevitable in ecommerce, but the way businesses manage them can make a huge difference. In fact, adopting sustainable returns practices is no longer just a nice-to-have; it’s a must-have for companies looking to build long-term loyalty, reduce carbon emissions, and meet the demands of environmentally conscious consumers. Additionally, integrating corporate social responsibility into business practices is a necessary part of meeting consumer expectations and encouraging brand loyalty.

In this article, we’ll explore how ecommerce businesses can implement sustainable returns strategies to reduce their carbon footprint, cut costs, and create a more sustainable future for their operations. Whether you’re looking to optimize your reverse logistics, reduce packaging waste, or improve your returns management system, we’ll guide you through actionable steps to implement eco-friendly solutions that benefit both the environment and your bottom line.

The Environmental Impact of Returns in Ecommerce

The retail industry has seen tremendous growth, particularly in ecommerce, where online purchases are now a major part of the market. However, this growth comes with a hidden cost: returns, which pose a significant financial burden on brands. In 2024, U.S. returns in retail totaled nearly $900 billion, with the fashion industry alone contributing to a substantial portion of those returns. While returns are an integral part of the ecommerce returns process, they also contribute significantly to carbon emissions due to transportation (shipping). In fact, the carbon footprint of processing returns, including shipping, packaging, and restocking, is estimated to be around 15 million metric tons of CO2 annually. And the significant costs associated with returns extend beyond financial implications, impacting both profitability and environmental sustainability.

The environmental costs don’t stop at transportation. Many returned items are either disposed of or end up in landfill waste, especially when they can’t be resold or refurbished. Unsold items often get sent back to warehouses where they are either recycled, discarded, or thrown away, adding to the growing issue of packaging waste.

The Need for Sustainable Returns Practices

As ecommerce businesses face increasing scrutiny from both consumers and environmental groups, adopting sustainable practices for managing returns with a focus on cost management becomes a critical step. The good news is that implementing eco-friendly returns solutions not only reduces environmental impact but can also result in significant cost savings and increased customer satisfaction. However, it’s important not to forget that minimizing returns altogether goes a long way towards long-term customer retention.

Consumer Expectations for Sustainability

Environmentally conscious consumers are more discerning about the brands they support. According to recent studies, conscious consumers are willing to pay more for products and services from brands that prioritize environmental sustainability. Brands that align their sustainability efforts with consumer values, like offering free return shipping, eco-friendly packaging, and transparent returns policies, are better positioned to enhance customer satisfaction, retain loyal customers, and build lasting relationships. Addressing environmental concerns can also lead to increased customer affinity for your brand.

Key Strategies for Implementing Sustainable Returns

There are some key sustainable returns strategies that online retailers can adopt to improve the returns process while minimizing their environmental impact. By offering instant store credit and various exchange options, for example, retailers can incentivize customer exchanges instead of refunds, which reduces returns and improves average order value. Let’s look at several strategies that can boost sales and improve overall business performance:

1. Offering Store Credit Instead of Refunds

One effective way to reduce the environmental impact of returns and achieve potential cost savings is by offering store credit instead of cash refunds. This not only keeps the returned items in circulation but also encourages future purchases and builds customer loyalty. When a customer chooses store credit, the returns management system can process the return without the need for excessive transportation or the risk of sending the product to landfill waste.

Why it works:
Offering store credit promotes sustainable consumption by encouraging customers to purchase again. This reduces unnecessary returns shipping and helps businesses optimize their inventory management. Plus, customers appreciate the flexibility of store credit, making them more likely to shop again.

2. Streamlining Reverse Logistics

Reverse logistics involves the management of product returns from the customer back to the business. Optimizing reverse logistics operations and enhancing return management are necessary for reducing the carbon emissions associated with returns. By consolidating returns into regional hubs or offering drop-off points, businesses can minimize long-distance shipping and transportation-related emissions. Furthermore, using more efficient transportation routes can help reduce transportation costs and improve operational efficiency.

Why it works:
Optimizing the reverse logistics process helps reduce waste and unnecessary emissions. Businesses that integrate returns management software with their supply chain management systems can track returns in real time, making the process more efficient and eco-friendly. Additionally, offering regional drop-off points can decrease the distance products travel, reducing fuel consumption and carbon emissions. And peer-to-peer returns, where customers forward their returns to the next purchasing customer rather than back to a warehouse, reduce the environmental impact of returns more than any other solution. Bottom line: Optimized supply chains are essential for achieving eco-friendly results, from raw material acquisition to final delivery, ensuring transparency and traceability throughout the process.

Pro Tip: Consider partnering with sustainable shipping companies that use eco-friendly methods, such as electric vehicles or carbon-neutral shipping.

3. Using Eco-Friendly Packaging

Packaging is a major source of waste in the returns process. Using eco-friendly packaging options, such as recyclable or biodegradable materials, can significantly reduce the environmental footprint of returns by reducing landfill waste. This includes using reusable packaging that can be sent back with returned items, which not only cuts down on waste but also promotes sustainable behavior among customers.

Why it works:
Switching to sustainable packaging reduces the amount of packaging waste generated by the returns process. Reusable packaging helps ensure that returned products are shipped back without additional waste, and customers will appreciate the brand’s commitment to eco-friendly packaging.

Pro Tip: Invest in sustainable packaging that’s both practical and recyclable. Avoid using materials that contribute to landfill waste and instead opt for recycled paper or biodegradable bags.

4. Leveraging Data Analytics to Reduce Returns

One of the most powerful tools ecommerce businesses have at their disposal to reduce returns is data analytics. By analyzing returns data and sustainability metrics, businesses can identify trends and root causes behind returns, such as incorrect sizing, product quality issues, or shipping problems. This information can help businesses adjust their inventory management strategies and improve product offerings to reduce unnecessary returns. Additionally, data analytics can help in improving customer satisfaction by addressing product issues before they lead to returns, unburdening the returns process.

Why it works:
With insights from data analytics, businesses can minimize returns by offering more accurate sizing guides, improving product descriptions, or addressing quality issues before they become problems. By reducing the volume of returns, businesses lower the transportation-related emissions and packaging waste associated with those returns.

Pro Tip: Use returns management software to track reasons for returns, providing insights that can help optimize your returns process and improve overall business operations.

5. Encouraging the Circular Economy

The circular economy model focuses on keeping products in circulation for as long as possible, reducing the need for new products to be manufactured, and minimizing landfill waste. Ecommerce stores can integrate the circular economy approach into their returns process by adopting sustainable return practices such as refurbishing or reselling returned items. For example, fashion retailers can partner with secondhand or resale platforms to sell gently used products, reducing waste and promoting sustainability. Adopting such practices help businesses establish themselves as sustainable brands, taking their environmental responsibility seriously.

Why it works:
By adopting a circular economy model, businesses can reduce the environmental impact of returns by keeping products out of landfills and reintroducing them into the marketplace. This not only reduces waste but also creates potential resale value, offering an additional revenue stream.

Pro Tip: Set up a secondhand program or partner with existing platforms to resell returned items at a discount, making products available to a new group of customers.

Real-Life Examples of Sustainable Returns in Ecommerce

Patagonia

Patagonia has long been a leader in sustainability. Their Worn Wear program encourages customers to return used items for repair, reuse, or resale, which significantly reduces waste. This approach aligns with their circular economy principles, helping minimize the environmental impact of returns.

IKEA

IKEA focuses on reverse logistics and eco-friendly packaging for returns, ensuring that products are sent back through the most efficient and environmentally friendly processes possible. Their commitment to sustainability extends to their returns process, making it easy for customers to make eco-conscious choices.

Educational and Engagement Platforms

Educational and engagement platforms can play a significant role in promoting sustainable ecommerce practices. By providing customers with information and resources about sustainable ecommerce, online retailers can educate and engage their customers about the importance of environmental responsibility and social consciousness.

Creating blog posts or social media content about sustainable ecommerce practices is an effective way to raise awareness and share valuable insights. Offering webinars or workshops on sustainable ecommerce can also help customers understand the impact of their purchasing decisions and encourage them to make more eco-friendly choices. Additionally, implementing customer loyalty programs that reward customers for participating in sustainable practices can foster a sense of community and promote long-term engagement.

Online retailers can also partner with environmental organizations or influencers to promote sustainable ecommerce practices and raise awareness about the importance of environmental responsibility. By building trust with their customers and demonstrating a commitment to sustainability, online retailers can enhance customer loyalty and retention, ultimately contributing to a more sustainable future for their business and the planet.

Conclusion: Building a More Sustainable Future with Ecommerce Returns

The sustainable returns ecommerce movement is gaining momentum, and businesses that adopt sustainable business practices are well-positioned to improve their environmental footprint while enhancing customer satisfaction. By implementing strategies like offering store credit, optimizing reverse logistics, using eco-friendly packaging, and promoting a circular economy, ecommerce stores can significantly reduce their carbon emissions and create a sustainable future for their operations.

Adopting sustainable returns practices not only benefits the planet but also improves customer retention, reduces operational costs, and strengthens your brand’s reputation as a sustainable and responsible business.

Frequently Asked Questions

How can ecommerce stores reduce the environmental impact of returns?

By offering free returns, using eco-friendly packaging, optimizing reverse logistics, and adopting circular economy practices like reselling or upcycling returned items.

What is the circular economy approach in ecommerce?

The circular economy approach focuses on reusing, recycling, and reselling returned products, thus reducing waste and extending the lifecycle of products.

Why should ecommerce businesses offer store credit for returns?

Offering store credit instead of refunds keeps customers engaged with the brand, promotes future purchases, and reduces the environmental cost of product disposal.

How can data analytics help reduce returns?

By using data analytics to track returns patterns, businesses can better understand customer preferences and optimize product offerings to reduce unnecessary returns.

What are the benefits of adopting sustainable returns practices?

Adopting sustainable returns practices can help reduce waste, lower carbon emissions, improve customer satisfaction, and increase customer loyalty.

How does free return shipping enhance customer satisfaction and loyalty?

Free return shipping plays a crucial role in enhancing customer satisfaction and loyalty. It provides customers with a hassle-free way to return products, which can significantly improve their shopping experience. While some retailers are moving away from this practice due to rising costs, many still see it as a vital component in maintaining a positive customer relationship and encouraging repeat business.

Written By:


Indy Pereria

Indy is the Head of People Operations at Cahoot, fosters innovation, develops recruitment strategies, and scales the company’s culture.

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Amazon Pulls the Plug on Thousands of Vendors

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Receive a big check every month for selling your products directly to Amazon wholesale? Get ready to change the way you do business with the e-commerce behemoth. If you own a small business that currently moves less than $10 million in sales volume through Amazon, or Amazon has not paired your company with an assigned vendor manager, the company will now require you to sell your products through its third-party marketplace by default.

Receive a big check every month for selling your products directly to Amazon wholesale? Get ready to change the way you do business with the e-commerce behemoth. If you own a small business that currently moves less than $10 million in sales volume through Amazon, or Amazon has not paired your company with an assigned vendor manager, the company will now require you to sell your products through its third-party marketplace by default.

Moving smaller vendors to its third-party platform allows Amazon to eliminate costs associated with directly supporting smaller companies that bring in less revenue.  Once a business is on the third-party platform, Amazon also has the ability to charge for additional services, such as Fulfilled by Amazon and account management.

Amazon’s first-party business will focus on maintaining relationships with high value brands and companies involved in the production of Amazon’s private-label products.  

The change is expected prove difficult for smaller, first-party vendors that lack the existing systems and infrastructure to support competitive third-party marketplace sales and distribution.

Read the article here.

Written By:


Indy Pereria

Indy is the Head of People Operations at Cahoot, fosters innovation, develops recruitment strategies, and scales the company’s culture.

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The Evolution of Thrifting: Why Secondhand Shopping Has Gone Mainstream

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Once relegated to church basements and garage sales, secondhand shopping has officially gone prime time. What was once a necessity-driven, fringe behavior is now a flourishing multi-billion-dollar industry driven by value-seeking consumers, climate-aware shoppers, and tech-savvy Gen Z and Millennial buyers who wear their thrift finds as a badge of honor.

In the U.S., resale is experiencing a meteoric rise. The secondhand apparel market alone grew 14% in 2024, five times faster than the broader apparel sector, and is expected to top $74 billion by 2029. Globally, it’s projected to reach $367 billion. What’s driving this explosive growth? A perfect storm of economic pressure, shifting cultural norms, sustainability concerns, and the digitization of everything from neighborhood thrifting to luxury resale.

For retail executives and brand leaders, the message is clear: resale isn’t cannibalizing your customer base, it’s reshaping it. Understanding this cultural shift is no longer optional; it’s essential.

From “Thrift Shame” to “Treasure Hunt”: How We Got Here

The image makeover of secondhand shopping over the past decade is nothing short of remarkable. What was once associated with financial hardship has been reframed as smart, stylish, and sustainable. Social media has supercharged this transformation. A single TikTok thrift haul can rack up millions of views, turning vintage shopping into a viral aesthetic. On Depop, a Gen Z-favorite resale platform, sellers often model their items themselves, cultivating loyal followings around curated closets.

According to Morning Consult, about half of Americans now shop secondhand regularly, and nearly 1 in 4 have sold an item secondhand in the past three months. Among Millennials and Gen Z, the adoption rate is even higher, with over two-thirds of young adults purchasing used items last year.

“Secondhand is no longer a fallback,” says Alon Rotem, Chief Strategy Officer at ThredUp. “It’s a first-stop shop for the modern consumer.”

What’s Fueling the Secondhand Surge?

1. Economic Pressures Make Resale Look Smart

Amid inflation, rising interest rates, and growing concern about household debt, consumers are tightening their belts and looking for value. For price-sensitive generations raised in the aftermath of the 2008 recession and the financial disruptions of the pandemic, secondhand shopping isn’t just about affordability—it’s about economic resilience.

A record 58% of U.S. consumers cited the cost-of-living crisis as a motivator for secondhand purchases in 2024. With new imported apparel prices rising, especially due to recent tariffs on Chinese goods, secondhand becomes even more competitive. Thrift finds are not just cheaper; they’re often higher quality than mass-produced fast fashion alternatives.

As Manish Chowdhary, Founder and CEO of Cahoot, puts it: “When prices rise and new inventory becomes more expensive or delayed, secondhand offers a faster, cheaper, and more sustainable supply chain. It’s not just a workaround, it’s a strategic alternative.”

2. Sustainability Has Become Personal

Younger generations are deeply concerned about climate change, and they’re expressing it through their wallets. Fast fashion is increasingly viewed as wasteful and unethical, while secondhand shopping is seen as a form of activism.

In fact, nearly half of Gen Z and Millennials now consider resale value when making a purchase. They understand that a $15 thrifted Levi’s jacket has residual value, while a $7 fast fashion top may end up in a landfill. The resale economy empowers them to be both budget-conscious and climate-conscious.

Buying used is increasingly framed as a responsible lifestyle choice. Social movements like the Circular Economy and #SlowFashion are giving consumers new ways to engage with brands and expect more from them.

3. Uniqueness and Self-Expression

Gen Z isn’t interested in looking like everyone else. Resale offers one-of-a-kind finds that can’t be replicated at the mall. Vintage ’90s jeans, old-school band tees, and retro designer handbags give them an edge and a story to tell.

Nearly half of younger consumers say they shop secondhand for “unique” items that help express their personal style. Unlike mass-market trends, thrifting allows consumers to build wardrobes and homes with character. Platforms like Depop, Poshmark, and 1stDibs are built around discovery and community, turning shopping into storytelling.

4. Digitization and Convenience

A decade ago, thrifting required time, luck, and in-person exploration. Today, you can scroll through thousands of curated listings, filter by size, and check out in seconds. AI-powered platforms like ThredUp now offer visual search and dynamic pricing. Tools like Smart Listing on Poshmark help sellers optimize their listings, while AI authentication ensures buyers are getting the real deal on platforms like The RealReal and StockX.

Modern resale has the polish of traditional ecommerce, and often better UX.

Not Just Clothes: Recommerce is Expanding

While apparel leads the way, resale is growing across verticals:

  • Furniture & Home Décor: Platforms like Facebook Marketplace, AptDeco, and 1stDibs are booming as shoppers furnish homes with affordable or vintage items.
  • Luxury Goods: The RealReal, Rebag, and Vestiaire Collective offer authenticated pre-owned fashion and jewelry with white-glove service.
  • Electronics & Media: eBay, Gazelle, and Back Market cater to shoppers looking for refurbished tech.

This diversification shows that resale is no longer a niche; it’s a cross-category movement.

Brands Are Getting Involved, And Winning

Screenshot of lululemon’s Like New store: latest women’s arrivals

Retailers are no longer watching from the sidelines. Over 75% of major brands are either exploring or actively building resale programs. From trade-in initiatives (Patagonia’s Worn Wear, REI Re/Supply) to peer-to-peer resale on brand sites (Rachel Comey, Hanna Andersson), brands are turning recommerce into a loyalty driver and sustainability differentiator.

Lululemon’s “Like New” program is an early success story. Customers trade in lightly used gear for credit, and the brand resells it online. In return, Lululemon gains customer retention, deeper engagement, and new revenue streams, all while reinforcing its commitment to sustainability.

Even Walmart has gotten in on the game, partnering with Rebag to sell pre-owned luxury handbags on its site, proving that resale now appeals across price points and retail formats.

Screenshot of Walmart’s Rebag store: in pre-loved fashion

Tariffs, Trade, and the Return of the Local Supply Chain

With rising tensions around Chinese imports and efforts to close tax loopholes exploited by ultra-cheap players like Shein and Temu, new apparel is becoming more expensive and politically charged. The resale market sidesteps these supply chain vulnerabilities. As Rotem of ThredUp notes, “All of the clothing comes from the closets of Americans.”

Recommerce essentially “domesticates” the supply chain. Brands and platforms that embrace this model gain independence from volatile global trade routes, and potentially from looming environmental regulations around overproduction.

Challenges Ahead: Will It Scale?

Despite the momentum, resale isn’t frictionless. Processing single-SKU, one-off products is operationally messy. Trust and quality control remain concerns. Margins can be tight, especially for managed resale services. And a deep recession could simultaneously increase supply (more people selling) and suppress demand (less discretionary spending).

Still, the trendlines are clear. Shoppers want alternatives, and for brands, recommerce offers resilience in pricing, supply, sustainability, and customer loyalty.

Retail Takeaways: What Leaders Need to Do Now

  1. Understand your resale customer. They’re already buying and selling your products. Are you enabling them? Or ignoring them?
  2. Audit your supply chain for circularity: Can your products support second, third, or fourth lives?
  3. Explore RaaS partnerships (Resale-as-a-Service): Trove, Recurate, Archive, and ThredUp can help launch resale with minimal lift.
  4. Integrate resale into your CX: Consider buy-back incentives, branded resale platforms, and Peer-to-Peer Return options.
  5. Start with SKUs that make sense: Apparel, accessories, gear, and standardized home goods are ideal starting points.

5 Brands Getting Resale Right

  • Patagonia – Worn Wear encourages durability and trade-ins.
  • REI – Re/Supply processes thousands of returned items into fresh inventory.
  • Lululemon – “Like New” generates loyalty and promotes quality.
  • Rachel Comey – Peer-to-peer resale via Recurate integration.
  • Athleta – Partnered with ThredUp to launch “Athleta Preloved.”

Resale vs. Retail – By the Numbers

Infographic comparing resale vs. retail by market size, growth, emissions, returns, and loyalty impact, highlighting resale’s sustainability edge

Final Thought

The next decade of retail will be defined not just by what’s new, but by how we handle what’s already been made. Jeremy Stewart, Head of Customer Success at Cahoot, believes that “Recommerce is not a disruption, it’s an evolution. The brands that thrive will be those who view returns, resale, and reverse logistics not as cost centers, but as opportunities to connect, conserve, and compete.”

The closet is open. Are you ready for it?

Glossary: Recommerce Terms You Should Know

🔄 Recommerce

Short for “reverse commerce,” recommerce refers to the buying and selling of pre-owned, returned, or surplus goods. It includes secondhand, vintage, refurbished, and resale items, and is central to the circular economy movement.

🛍️ Resale-as-a-Service (RaaS)

A business model that allows brands to launch and manage their own resale programs using third-party tech and logistics providers. RaaS platforms handle authentication, fulfillment, pricing, customer service, and returns. Leading providers include Trove, Recurate, Archive, and ThredUp.

🔁 Circular Economy

An economic model that aims to eliminate waste and maximize the lifecycle of products by keeping them in use through reuse, resale, recycling, or refurbishment. Recommerce is a key pillar of circular retail strategy.

👗 Bracketing

A common ecommerce practice where customers buy multiple sizes or colors of the same item with the intention of returning those that don’t fit or suit them. Bracketing contributes to high return rates, especially in fashion retail.

📦 Reverse Logistics

The process of moving goods from customers back to the seller or manufacturer, often for return, repair, or resale. Traditional reverse logistics can be costly and environmentally taxing; peer-to-peer returns streamline this process.

🤝 Peer-to-Peer (P2P) Returns

A logistics innovation where a returned product is routed directly from one customer to another, bypassing the brand’s warehouse, to reduce shipping costs, emissions, and processing time. Companies like Cahoot are pioneering this model for scalable circularity.

🧾 Buy-Back Program

A retailer-led initiative that invites customers to return used items (often for store credit or cash) so they can be cleaned, verified, and resold. Examples: Lululemon Like New, Patagonia Worn Wear.

💼 Trade-In Program

Similar to a buy-back, but typically focused on higher-value goods (e.g., electronics, luxury fashion, outdoor gear). Items are traded in for credit or resale eligibility and then processed via a recommerce channel.

🔍 Authentication

The process of verifying the legitimacy and condition of pre-owned items—especially luxury goods—before resale. It is often powered by AI (e.g., Entrupy) or expert inspection. It builds buyer trust and ensures resale value.

📈 Net Recovery Rate

The percentage of a returned or resold item’s original retail value that a retailer or recommerce partner can recover through resale. A key KPI for evaluating the efficiency and profitability of circular programs.

📊 Resale Value Consciousness

A consumer mindset in which the anticipated resale value of a product influences the initial purchase decision, especially common among Gen Z and Millennials who view fashion as an asset rather than an expense.

Frequently Asked Questions

How are rising tariffs influencing the long-term economics of new vs. secondhand retail goods?

Tariffs on imported goods, particularly fast fashion and consumer products from low-cost countries, are driving COGS up substantially. For retailers, this makes resale more than just a sustainability story—it becomes a margin play. When the price gap between new and secondhand shrinks, recommerce emerges as a viable buffer strategy. Brands that integrate resale now can insulate themselves from future geopolitical pricing shocks.

What does secondhand shopping reveal about the shifting values of Gen Z and Millennials?

Younger generations are not just frugal—they’re value driven. They want products that reflect their beliefs: sustainability, authenticity, and individuality. Secondhand enables them to reject mass consumption while expressing personal style. For retailers, it’s not just about offering “cheaper stuff”; it’s about enabling self-expression with meaning. Recommerce is not just a revenue channel; it’s a brand alignment opportunity.

How can brands embrace resale without cannibalizing their primary business model?

The misconception that resale erodes new product sales misses the broader picture: resale extends the customer lifecycle. When done right, resale drives acquisition, improves retention, and enhances brand perception. Circular strategies like trade-ins and peer-to-peer returns build ecosystem loyalty. Think of it not as cannibalization, but as ecosystem optimization—your customer is shopping somewhere; make sure it’s still within your brand’s orbit.

Why is recommerce considered part of supply chain resilience in 2025 and beyond?

With global supply chains strained by tariffs, climate events, and transportation costs, recommerce offers a rare thing: a domestic, distributed inventory pool that does not rely on cross-border shipping. Resale platforms are becoming a decentralized warehouse network. That’s not just green—it’s strategic infrastructure. Brands that build a circular foundation today will be better equipped for tomorrow’s volatility.

Could resale, thrift, and peer-to-peer models become the default, not the exception, in 10 years?

Absolutely, and it’s already happening. With resale growth outpacing traditional retail and platforms like ThredUp, Depop, and Cahoot building robust ecosystems, the future points to a blended model. New, used, repaired, returned, and rerouted items will all live in the same customer journey. The shift isn’t just about price—it’s about designing a system that wastes less, serves more, and adapts faster.

Written By:


Indy Pereria

Indy is the Head of People Operations at Cahoot, fosters innovation, develops recruitment strategies, and scales the company’s culture.

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Tariff Shock 2025: Understanding the Tariff Shopper’s Mindset

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The 2025 tariff increases have intensified economic pressures on ecommerce sellers, leading to heightened anxiety over rising Costs of Goods Sold (COGS) and the potential loss of customers and revenue due to necessary price adjustments. Meanwhile, consumers are also compelled to adapt swiftly, and sellers must take the time to understand the psychological shifts in consumer spending and implement strategic business adjustments to sustain and grow their businesses in these turbulent times.

The Psychology of the Tariff-Era Consumer

Economic uncertainty, amplified by the recent tariffs, has significantly influenced consumer behavior. Shoppers are exhibiting increased caution, prioritizing essential goods over discretionary spending. This shift is rooted in the desire to maximize value and ensure financial stability amid rising prices. For instance, consumers are stocking up on non-perishable items like canned goods and household supplies in anticipation of further price hikes.

Buyer Personas in the 2025 Tariff Environment

1. The Budget-Conscious Parent

  • Goals: Stretch the household budget to cover essential needs for the family.
  • Purchases: Bulk buys of diapers, generic brand groceries, and discounted children’s clothing.
  • Product Positioning: Emphasize “Bulk Savings,” “Family Essentials,” and “Value Packs.”

2. The Small Indulgence Shopper

  • Goals: Seek affordable luxuries to maintain morale without a significant financial impact.
  • Purchases: Artisanal chocolates, scented candles, and specialty teas.
  • Product Positioning: Highlight “Affordable Luxury,” “Treat Yourself,” and “Everyday Indulgence.”

3. The Prepper-Inspired Planner

  • Goals: Prepare for potential shortages and future price increases by stockpiling essentials.
  • Purchases: Emergency food kits, multipurpose tools, and first-aid supplies.
  • Product Positioning: Use “Be Prepared,” “Emergency Essentials,” and “Long-Term Value.”

4. The Homebody Investor

  • Goals: Enhance the home environment to compensate for reduced spending on external entertainment.
  • Purchases: Home improvement tools, board games, and home workout equipment.
  • Product Positioning: Focus on “Home Comforts,” “Staycation Upgrades,” and “Invest in Your Space.”

Product Categories Resilient to Tariff Impacts

1. Made-in-USA Goods

  • Examples: Handcrafted furniture, domestically produced apparel, and local artisanal foods.
  • Rationale: Avoidance of import tariffs makes these products more competitively priced.
  • Consumer Appeal: Patriotic support for local businesses and assurance of quality.

2. Luxury and High-End Items

  • Examples: Designer handbags, premium electronics, and high-end kitchen appliances.
  • Rationale: Affluent consumers may remain less sensitive to price increases, sustaining demand.
  • Consumer Appeal: Perceived long-term value and status associated with luxury goods.

3. Essential Goods

  • Examples: Toiletries, over-the-counter medications, and staple food items like rice and bread.
  • Rationale: Necessities maintain consistent demand regardless of economic conditions.
  • Consumer Appeal: Indispensable nature ensures prioritized spending.

4. Sustainable and Eco-Friendly Products

  • Examples: Reusable water bottles, biodegradable packaging, and solar-powered gadgets.
  • Rationale: Growing environmental consciousness drives demand, and domestic production may mitigate tariff effects.
  • Consumer Appeal: Alignment with personal values and potential long-term cost savings.

5. Digital Goods and Services

  • Examples: Online streaming subscriptions, e-books, and virtual fitness classes.
  • Rationale: Intangible products are not subject to import tariffs.
  • Consumer Appeal: Immediate access and convenience.

Products Likely to Experience Price Hikes

Certain products are more susceptible to price increases due to their reliance on imported materials or components. Consumers may consider purchasing these items before tariffs fully impact retail prices:

  • Electronics: Smartphones, laptops, and televisions often rely on imported components, making them vulnerable to price increases.
  • Automobiles and Parts: Vehicles and replacement parts are facing higher tariffs, leading to increased costs for consumers.
  • Appliances: Refrigerators, washing machines, and microwaves may see price hikes due to increased costs of imported steel and components.
  • Furniture: Items such as sofas and dining sets, especially those manufactured overseas, are likely to become more expensive.
  • Footwear and Apparel: Clothing and shoes imported from tariff-affected countries may experience price increases.

Strategies for Ecommerce Sellers to Adapt and Sustain Their Businesses

In response to the tariff-induced economic shifts, ecommerce sellers can implement several strategies to maintain profitability and meet changing consumer needs:

1. Diversify Sourcing and Manufacturing

  • Reshoring Production: Bringing manufacturing back to domestic facilities can mitigate tariff impacts and supply chain disruptions. While this transition requires significant investment and time, it offers long-term stability and control over production processes. However, it is important to note that reshoring efforts have historically faced challenges, including high domestic costs and infrastructure limitations. Analysts caution that without substantial policy support, significant reshoring remains unlikely.
  • Nearshoring: Establishing manufacturing operations in neighboring countries with more favorable trade agreements can reduce tariff exposure and shorten supply chains. This approach balances cost-effectiveness with logistical advantages.
  • Alternative International Suppliers: Identifying suppliers in countries less affected by the tariffs can help maintain competitive pricing. For instance, shifting sourcing from China to the Philippines or Malaysia may offer cost benefits. However, make sure to fully evaluate the reliability and quality standards of new suppliers.

2. Optimize Inventory Management

  • Stockpiling: Increasing inventory levels of high-demand or tariff-impacted products can buffer against supply chain disruptions and price volatility. This strategy requires careful financial planning to manage the associated carrying costs.
  • Just-in-Time (JIT) Inventory: Implementing JIT practices minimizes holding costs by aligning inventory levels closely with demand. While this reduces storage expenses, it necessitates a highly responsive supply chain to avoid stockouts.

3. Implement Strategic Pricing Adjustments

  • Transparent Communication: Clearly informing customers about the reasons for price increases, such as tariff-induced costs, or how you’re making changes to improve efficiency so you can maintain pricing at this delicate time, can foster understanding and promote trust.
  • Value-Based Pricing: Emphasizing the unique value propositions of products, such as superior quality or sustainability, can justify higher prices. Highlighting these aspects differentiates products in a competitive market.
  • Bundling Products: Offering product bundles or value packs can enhance perceived value, encouraging customers to make purchases despite price increases. This strategy can also help move inventory more efficiently.

4. Enhance Supply Chain Resilience

  • Supplier Diversification: Reducing dependence on a single supplier or region decreases vulnerability to disruptions. Building relationships with multiple suppliers ensures alternative options are available when needed.
  • Supply Chain Visibility: Investing in technology that provides real-time tracking and analytics enhances the ability to anticipate and respond to potential issues promptly. Improved visibility aids in proactive decision-making.
  • Collaborative Relationships: Strengthening partnerships with suppliers and logistics providers and collaborating on solutions to mitigate tariff impacts and streamline operations.

5. Leverage Technology and Automation

  • Ecommerce Platforms: Utilizing advanced ecommerce platforms can optimize operations, from inventory management to customer relationship management, reducing overhead costs. Platforms like Cahoot offer technology-driven solutions to enhance efficiency.
  • Automation Tools: Implementing automation in areas such as order processing and fulfillment can reduce labor costs and improve accuracy, contributing to overall cost savings.
  • Outsourcing Fulfillment: Distributing inventory to support 1- and 2-day nationwide shipping using ground services lowers final-mile transportation costs while meeting customer delivery expectations. The improved margins often pay for the managed services.

6. Explore Alternative Product Offerings

  • Domestic Products: Focusing on products manufactured domestically can circumvent tariffs and appeal to customers interested in supporting local businesses. This approach aligns with growing consumer preferences for locally sourced goods.
  • Digital Products: Expanding into digital goods and services, which are not subject to import tariffs, can diversify revenue streams and reduce reliance on physical products.

7. Monitor and Advocate for Policy Developments

  • Stay Informed: Keeping abreast of trade policies and tariff changes enables proactive adjustments to business strategies. Regularly consulting reliable news sources and industry reports is essential.
  • Industry Advocacy: Participating in industry associations and advocacy groups can influence policy decisions and provide collective support in navigating trade challenges.

By implementing these strategies, ecommerce sellers can address the challenges posed by rising prices (COGS) due to the new reciprocal tariffs, maintain customer loyalty, and sustain revenue streams. Adaptability, informed decision-making, and strategic planning are crucial in turning these challenges into opportunities for growth and resilience.

Frequently Asked Questions

How are the 2025 tariffs impacting ecommerce consumer behavior?

The 2025 tariffs have caused a noticeable shift in consumer psychology. Shoppers are now prioritizing essential goods and cost-saving strategies while reducing discretionary spending. Many are stockpiling staples like canned food and household items in anticipation of future price increases, while others seek small indulgences or home improvements to maintain quality of life without overspending. Ecommerce sellers must understand these behavioral shifts to effectively reposition their offerings and messaging.

What types of products are most vulnerable to price hikes under the new tariffs?

Products that rely heavily on imported components or materials, such as electronics, appliances, automobiles and parts, furniture, and imported footwear or apparel, are particularly susceptible to price increases. Ecommerce merchants should anticipate rising COGS in these categories and consider both inventory planning and sourcing adjustments to stay competitive.

What can ecommerce sellers do to protect their margins and customer base amid rising COGS?

Sellers should take a multi-pronged approach:

  • Diversify sourcing (e.g., explore nearshoring or alternative countries less affected by tariffs).
  • Enhance inventory strategies, like stockpiling high-demand SKUs or implementing just-in-time models.
  • Use value-based pricing and communicate price changes transparently.
  • Introduce bundles and domestic alternatives to maintain customer loyalty.
  • Leverage technology (like Cahoot’s advanced shipping and fulfillment platform) to reduce operating costs and improve delivery efficiency.

Why is reshoring or nearshoring worth considering despite the upfront costs?

Reshoring production or nearshoring to neighboring countries like Mexico can help ecommerce businesses mitigate future tariff risks, reduce lead times, and gain more control over their supply chains. While it involves higher initial investment, the long-term benefits include greater stability, increased brand trust from “Made in USA” labeling, and potential cost savings from improved logistics and reduced reliance on volatile overseas markets.

How can technology platforms like Cahoot help ecommerce sellers weather the tariff storm?

Cahoot goes beyond traditional shipping software by offering a peer-to-peer fulfillment network, multi-carrier rate shopping, predictive cartonization, hazmat compliance tools, and automated shipment monitoring—all designed to reduce shipping costs, improve fulfillment speed, and maintain customer satisfaction. These capabilities allow sellers to absorb rising COGS more effectively without compromising service quality or profitability.

Written By:


Indy Pereria

Indy is the Head of People Operations at Cahoot, fosters innovation, develops recruitment strategies, and scales the company’s culture.

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How to Source Products Domestically in 2025 (and Actually Stay Profitable)

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It’s 2025, and ecommerce is going through one of its biggest shakeups in years. Thanks to the sweeping Liberation Day tariffs introduced by the Trump administration, the familiar playbook of sourcing products cheaply from overseas, especially from China and other Southeast Asian countries, is being rewritten in real-time. Merchants who’ve relied on low-cost international supply chains are now facing rising costs, shipping delays due to trade tensions, and a whole lot of uncertainty.

Understandably, many ecommerce sellers are nervous. Domestic sourcing sounds expensive, slow, or just plain confusing. But here’s the truth: sourcing products closer to home doesn’t just help you sidestep the tariff problem, it can actually make your business leaner, faster, and more resilient.

In this guide, we’ll walk through how to navigate the shift, explore the real pros and cons of reshoring, and share resources to help you make the switch without wrecking your margins.

Rethinking the Game: Why Domestic Sourcing Makes Sense in 2025

The tariffs have changed the math. What used to be a no-brainer, ordering large quantities from overseas suppliers to save on unit costs, has become a gamble. Costs are up, shipping times are unpredictable, and compliance headaches are stacking up.

On the flip side, domestic sourcing offers a new kind of advantage. Local suppliers mean faster restocks and lower minimum order quantities. There’s no waiting four to six weeks for a container to clear customs or worrying about shutdowns during Lunar New Year. You’re also aligning your brand with a growing consumer demand for transparency, sustainability, and “Made in USA” pride.

And while many assume domestic production is always more expensive, that’s not a given. When you factor in things like lower inventory risk, faster delivery, and fewer returns due to quality issues, the numbers often work out better than expected.

Step-by-Step: How to Start Sourcing Domestically

The first step in making the switch is to get clear on what you’re currently sourcing, and why. Take a hard look at your catalog. Which products are most affected by tariffs or shipping volatility? Which ones are top sellers and worth investing in locally? Which SKUs can be streamlined or combined to simplify sourcing?

Once you’ve identified the products to shift, it’s time to look for suppliers. The good news? There are more domestic sourcing platforms than ever before. You can start with well-known directories/services like Thomasnet, SourcingHub, or Wonnda. These sites let you filter for U.S.-based suppliers and often include valuable info on certifications, production capacity, and turnaround times.

You can also explore directories like SaleHoo, Wholesale Central, and Worldwide Brands. These marketplaces are designed specifically for ecommerce merchants and include both wholesalers and dropshippers. If you’re looking for more artisan or niche options, platforms like Faire and Handshake connect you with independent U.S. makers who often have more flexible terms and faster lead times.

Before you commit to any supplier, though, take your time vetting them. Ask about minimum order quantities, fulfillment capabilities, and their experience working with ecommerce brands. If possible, request product samples or a virtual walkthrough of their facilities. Some merchants even find it worthwhile to visit domestic suppliers in person. Relationships matter when you’re betting on supply chain reliability.

And don’t be afraid to negotiate. Many U.S. suppliers are eager for new business and open to collaboration. If you’re upfront about your volumes, timelines, and growth goals, you may be able to lock in favorable pricing or test runs.

Can You Stay Profitable While Sourcing Locally? Absolutely.

Profitability doesn’t disappear with reshoring, it just looks a little different. Faster turnaround times mean you can hold less inventory and restock more responsively. That reduces your cash flow risk and lowers the chance of over-ordering and sitting on dead stock.

It’s also a great time to simplify your product line. Instead of offering dozens of SKUs, focus on your best sellers. Consider bundling items to increase perceived value without raising your costs. And look at how you can tweak your product design to use more accessible, interchangeable, or regionally available materials.

Smart demand forecasting tools can help here, too. With shorter lead times, you can react quickly to trends and avoid tying up capital in slow-moving stock. The goal is agility, not just cost-cutting.

The Pros and Cons of Reshoring

Pros:
  • Shorter lead times
  • Greater control and transparency
  • Lower risk of international delays
  • Easier compliance with regulations
  • Marketing boost from “Made in USA”
  • Potential for more sustainable, ethical production
  • Cons:
  • Higher unit costs in some categories
  • Fewer supplier options for ultra-specialized products
  • Upfront effort to find and vet partners
  • Limited capacity in certain domestic industries
  • It’s not a magic bullet, but for many brands, the trade-offs are worth it, especially when combined with smarter inventory management and focused product strategies.

    Where to Find Domestic Suppliers: Your 2025 Resource Guide

    Whether you’re looking for mass production, handcrafted goods, or something in between, here are some of the top directories and platforms to explore:

    • Thomasnet – The gold standard for U.S. manufacturers, with a wide range of industrial and consumer product suppliers.
    • SourcingHub – Curated list of top-tier U.S. factories and manufacturers.
    • SaleHoo – Great for ecommerce merchants, includes wholesalers and dropshippers.
    • Wholesale Central – Free access to thousands of U.S.-based wholesalers.
    • Worldwide Brands – Lifetime access to pre-vetted domestic suppliers.
    • TopTenWholesale – Includes filters for location and product categories.
    • Faire & Handshake – Connect with U.S. artisan brands and indie product makers.
    • Inventory Source – Helpful for ecommerce Sellers looking to automate supplier integration and fulfillment.
    • Wonnda – Connects you with local manufacturers and private label producers.

    Real-World Examples of Domestic Sourcing in Action

    Brands of all sizes are making the shift. Allbirds has localized parts of its production for faster distribution. Beardbrand uses small-scale U.S. manufacturers to stay agile and respond to trends quickly. Some others include:

    1. American Giant

    This apparel company built its entire brand around “Made in the USA,” focusing on domestic manufacturing to ensure quality control and a transparent supply chain. By doing so, they’ve cultivated a loyal customer base that values ethical production and craftsmanship.

    2. GRACE Eleyae

    This haircare accessories brand moved production to the U.S. to shorten shipping timelines and respond to customer demand more quickly. They’ve seen improved inventory agility and enhanced brand trust from their mostly North American customer base.

    3. Parachute Home

    While originally sourcing globally, Parachute shifted to U.S.-based production for several core product lines, including mattresses and furniture. This move improved delivery speed and allowed for more direct oversight of product quality and safety.

    4. Bombas

    Although they started with international sourcing, Bombas has introduced more domestic partnerships to support scaling while maintaining their high product standards. U.S. manufacturing helps them meet seasonal spikes and support social impact initiatives more closely tied to their community-driven brand.

    These companies aren’t just reacting, they started reshoring efforts well before the actual Liberation Day tariff announcements. They’re turning sourcing into a competitive advantage. With shorter lead times, more predictable inventory, and marketing narratives customers actually care about, they’re staying ahead of the curve.

    Final Thoughts: Reshoring as a Competitive Edge

    Shifting to domestic sourcing might feel like a big leap, but in reality, it’s a smart evolution. The old way of doing things, buying cheap, buying big, and hoping for smooth sailing, is no longer reliable. In a world of volatile tariffs and trade policy, and with unpredictable shipping lanes, local sourcing offers something increasingly rare: control.

    By acting now, ecommerce merchants can build more resilient businesses, forge stronger supplier relationships, and tap into a growing consumer preference for local and transparent brands. It’s not just about surviving 2025, it’s about thriving in it.

    Need help figuring out your first move? Start small. Pick one SKU. Test a local partner. And take it from there. The new supply chain is closer than you think.

    Frequently Asked Questions (FAQs)

    Is domestic sourcing really more profitable than importing from overseas?

    Domestic sourcing can be more profitable when you account for total costs, not just unit price. Tariffs, shipping delays, customs fees, and long lead times all eat into profit margins. By sourcing locally, you can reduce inventory risk, increase speed to market, and spend less capital on bulk imports stuck at sea. That agility can translate into better cash flow and faster growth.

    Where can I find trustworthy U.S.-based suppliers or manufacturers?

    Start with reputable directories like Thomasnet, SourcingHub.io, and SaleHoo. Platforms like Faire and Handshake offer curated U.S. wholesaler access, and communities like Maker’s Row or Indie Source help connect you with small-batch U.S. manufacturers. You can also explore drop shipping through Inventory Source or Wholesale Central, which emphasize verified U.S. suppliers.

    Isn’t reshoring more expensive?

    Upfront, it can be. But consider the full picture. You’ll likely save on freight, customs, port fees, and the cost of excess inventory sitting in transit. Domestic suppliers also allow for smaller, more frequent orders, which can be better aligned with real demand, storage costs, etc. Many businesses actually find that reshoring helps them become leaner, more responsive, and ultimately more profitable over time.

    What are some quick wins for ecommerce sellers starting to reshore their sourcing?

    Start by auditing your current product catalog. Identify high-margin items or fast movers that would benefit from shorter lead times. Look for SKUs that are simple to manufacture and easy to ship. Also, consider transitioning one product line at a time to test domestic sourcing and refine your approach without disrupting your entire business.

    How do I make “Made in USA” part of my brand story?

    Highlight the benefits customers care about: quality, faster shipping, and ethical labor practices. Share behind-the-scenes looks at your manufacturing partners. Let customers know they’re supporting local jobs and sustainable practices. U.S.-based sourcing can be a powerful differentiator if you weave it authentically into your marketing and packaging.

    Written By:


    Indy Pereria

    Indy is the Head of People Operations at Cahoot, fosters innovation, develops recruitment strategies, and scales the company’s culture.

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    How Ecommerce Brands Can Survive Trump’s 2025 Liberation Day Tariffs

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    Key Takeaways

    • Trump’s 2025 Liberation Day tariffs will significantly raise import costs, especially from China and the EU, forcing ecommerce brands to re-evaluate sourcing, pricing, and fulfillment strategies to stay profitable.
    • Small and medium-sized businesses (SMBs) face heightened risk due to shrinking margins, rising consumer prices, and reduced global access, making agility and cost-efficiency vital for survival.
    • To navigate this tariff-driven landscape, ecommerce merchants should audit SKUs, delay non-essential investments, and leverage tech-enabled logistics platforms like Cahoot to reduce operational costs and preserve margins.

    Trump’s 2025 Liberation Day Tariffs

    The recent Trump “Liberation Day” Tariffs aim to protect U.S. industries and address trade deficits. But the impact on SMBs and the retail and ecommerce industry in particular (besides the inflationary shock to the regular consumer’s wallet) is nothing short of dire. While these measures aim to boost domestic manufacturing and reduce reliance on foreign goods, ecommerce merchants must prepare for substantial increases to the cost basis of inventory sourced overseas to protect themselves from extinction.

    These sweeping tariffs will hit cross-border Sellers especially hard, as a 10% baseline duty will apply to nearly all imports starting April 5, 2025, with elevated rates, (up to 34% for Chinese goods and 20% for the EU and other nations), starting April 9, 2025. In most cases, the elevated tariff rates are essentially calculated as half (50%) of the tariff rates being imposed on US-based imports shipping into each of the 60 countries on the list. In some cases, these new tariffs are in addition to the existing tariff rate (for example, China, which will be at 54% after the new rate is added to the existing 20% tariff). We’ve added the full list of tariffs by country down below in the FAQ section (the 10% flat tariff rates are removed from the table for readability).

    For online Sellers, this is more than a policy shift, it’s a direct threat to profitability, and thus, survival. Tariffs are effectively a tax on imports, which means higher landed costs for inventory and less flexibility in pricing strategies. Margins will shrink unless Sellers either pass those costs onto customers (risking demand) or find ways to cut operational overhead. Cross-border commerce will become less viable due to both U.S.-imposed tariffs and expected retaliatory tariffs from key trading partners like China, Canada, and the EU, further limiting access to international buyers and fulfillment routes.

    As your cost of goods sold (COGS) rises, so will related expenses like packaging, especially for those relying on international suppliers and traditional fulfillment models. If you’re importing from Asia or Europe, your business is likely in the direct line of fire. These changes signal a need for ecommerce brands to rethink sourcing, fulfillment, and pricing strategies to maintain competitiveness and survive in an increasingly protectionist market.

    Now more than ever, ecommerce Sellers must turn to flexible, digitally-powered solutions that reduce fixed costs, optimize logistics, and preserve margins. Weathering the impact of the 2025 tariffs will require both agility and efficiency, and those who adapt quickly will be in the best position to survive and thrive.

    It’s worth mentioning that on May 2, 2025, the de minimis tax exemption that had been in place for nearly 100 years is also set to end for all goods shipping from China and Hong Kong. This means that postal shipments valued at $800 or less that previously were able to be imported duty-free, will now be subject to a duty rate of either 30% of their value or $25 per item, (increasing to $50 per item after June 1, 2025).

    Consequences for Small and Medium-sized Businesses (SMBs)

    SMBs that import foreign goods will experience immediate cost increases due to tariffs on items like wine, automobiles, produce such as avocados, and grains used to brew beer and distill liquor. Asian imports in particular will be hit the hardest. The introduction of tariffs is expected to raise prices significantly, potentially adding an average of $2,100 to household costs annually. This increase in consumer prices can lead to decreased demand, further challenging small businesses.

    Ecommerce merchants, specifically, face challenges due to tariffs, requiring them to adopt flexible strategies to remain competitive. The uncertainty created by tariffs may hinder business investment decisions among small and medium-sized enterprises. This uncertainty, combined with rising operational costs, including increased packaging and shipping expenses, can strain the resources of SMBs.

    Increased tariffs can lead to cash flow challenges as small businesses struggle to maintain earnings without passing on costs to customers. The tariffs are anticipated to negatively impact employment, as businesses may slow hiring or enact layoffs to manage rising costs. Industry experts suggest that SMBs need targeted government support to navigate the complexities introduced by new trade barriers.

    As we transition to the next section, it’s essential to explore practical strategies that ecommerce merchants can adopt to navigate these challenges. The following subsections will provide actionable insights on auditing SKUs, delaying non-essential investments, and bulk warehousing before enforcement.

    Strategies for Ecommerce Merchants to Navigate Tariffs

    Ecommerce merchants can implement various strategies to alleviate the financial impact of tariffs on their operations. By adapting their operations to enhance resilience, businesses can survive in a competitive and changing market environment. Four specific strategies are recommended: auditing SKUs, communicating with suppliers, reviewing pricing strategies, and delaying non-essential investments.

    These strategies will help ecommerce merchants navigate the complexities introduced by new tariff rates and maintain their competitive edge. By focusing on high-impact areas, conserving financial resources, and mitigating price hikes, businesses can better withstand the economic turbulence caused by tariffs.

    Audit SKUs

    Conducting thorough SKU audits helps identify which products are significantly impacted by tariff changes. By analyzing their supply chain, businesses can identify specific products and materials affected by tariffs, allowing them to address their biggest cost risks first. This meticulous approach enables merchants to focus on the items most affected by tariff increases and make informed decisions about pricing and inventory management. This proactive strategy will be vital for maintaining profitability in this challenging economic environment.

    Effective SKU auditing also helps businesses streamline their operations and improve their overall efficiency. By focusing on high-impact areas, ecommerce merchants can better allocate their resources and optimize their supply chain management.

    Communicate with Suppliers

    Effective communication with suppliers is crucial for ecommerce businesses to respond swiftly to fluctuations in costs and adjust their pricing structures. By maintaining regular dialogue with suppliers, businesses can stay informed about market changes and negotiate better terms. The tariff impact is global in nature, not one-sided, so a proactive approach to understanding the perspectives from international trade partners can help ecommerce merchants anticipate price changes and adjust their pricing models accordingly.

    Pricing Strategies to Protect Margins

    Ecommerce merchants must take decisive action to safeguard profit margins and ensure long-term viability. One of the most immediate and effective levers available is strategic pricing. With increased costs stemming from tariffs on imported goods, packaging materials, and supply chain disruptions, merchants should not shy away from adjusting product pricing thoughtfully and transparently. Rather than sudden, sweeping hikes, businesses can consider incremental increases paired with clear messaging that explains the necessity to customers. Most consumers are aware of inflationary pressures and global economic shifts; honest communication can maintain trust while preserving margin.

    Another smart tactic is to repackage value through product bundling. By combining complementary items into curated sets, merchants can increase perceived value and average order value (AOV), even as individual product costs rise. Bundles offer a way to mask price increases while optimizing shipping efficiency and margin structure. For instance, rather than selling a single item for $20, offering a two-item bundle at $36 not only incentivizes the customer but also improves margin flexibility. Bundles also help reduce the inventory of slower-moving SKUs that may be impacted more heavily by tariffs, turning potential liabilities into sales drivers.

    Ultimately, pricing strategy in a high-tariff environment isn’t about squeezing customers, it’s about maintaining operational resilience. Ecommerce merchants must be agile, data-driven, and creative in their pricing models. Bundling, value-based pricing, and ongoing SKU audits can form a powerful defense against margin erosion. By making deliberate, customer-centric adjustments today, merchants can weather the economic storm and emerge leaner, smarter, and stronger on the other side.

    Delay Non-Essential Investments

    During tariff periods, ecommerce merchants are encouraged to postpone non-critical investments to conserve financial resources and adapt to changing costs. Postponing unnecessary expenditures can preserve financial resources during turbulent tariff periods. This approach allows businesses to maintain liquidity and navigate the economic uncertainty caused by tariffs.

    For example, delaying investments in marketing or expansion can provide ecommerce businesses with needed liquidity during uncertain tariff periods. This strategic approach helps businesses focus on essential operations and maintain their financial stability. By postponing non-essential spending, ecommerce businesses can better manage their cash flow and gain the flexibility needed to make rapid adjustments comfortably.

    Cahoot Can Help By Leveraging Technology

    An illustration of technology working to control the impact of the Trump 2025 tariffs and resulting trade war

    Ecommerce businesses can thrive in the long term by implementing strategic changes in operations and technology. Utilizing advanced technologies, such as AI, allows ecommerce businesses to streamline processes, enhance customer engagement, and ultimately reduce costs. Cahoot is well-positioned as a partner in resilience and profitability for ecommerce merchants, offering innovative solutions to mitigate the financial impact of tariffs.

    Cahoot provides four key features that can help ecommerce merchants navigate the complexities introduced by new tariff rates: cost-saving shipping solutions, intelligent cartonization and label generation, low-cost distributed ecommerce order fulfillment, and a next-generation ecommerce returns program that can save merchants two-thirds of their reverse logistics costs. These features are designed to optimize various processes, making ecommerce operations more efficient and cost-effective.

    Shipping Software That Finds the Cheapest Rate Autonomously

    When every nickel counts, ecommerce merchants can’t afford to overspend on shipping. Cahoot’s intelligent shipping software automatically selects the most cost-effective service for every order; no manual rate shopping, no guesswork. Whether you’re shipping USPS, UPS, FedEx, or regional carriers, Cahoot’s platform compares rates in real-time and chooses the lowest-cost option that still meets delivery expectations. This ensures maximum savings on every shipment while maintaining customer satisfaction, even as tariffs increase your baseline costs.

    Intelligent Cartonization and Label Generation

    Cahoot’s Intelligent Cartonization technology automatically ensures that products are shipped in optimally sized boxes, thereby minimizing shipping fees by limiting dimensional weight shipping costs, which improves the bottom line.

    The implementation of Intelligent Cartonization also leads to improved efficiency, allowing for faster processing times and better use of shipping resources because the technology does all of the work without human input. By optimizing the packaging process, ecommerce merchants can streamline their operations and reduce the time and effort required for order fulfillment, positively impacting profitability.

    Multi-Warehouse Fulfillment: Shorter Zones = Lower Costs

    Cahoot uses a multi-warehouse fulfillment model that allows merchants to reduce shipping expenses by shipping from the closest distribution centers to their customers. This strategy enables businesses to optimize shipping routes and reduce delivery times, ultimately lowering logistics costs. By leveraging Cahoot’s platform, ecommerce merchants can achieve significant cost savings on shipping.

    With shipping zones playing a major role in total fulfillment costs, Cahoot’s multi-warehouse fulfillment network is a powerful solution. By distributing your inventory across strategically located fulfillment centers and outsourcing fulfillment operations, you can cut out the overhead associated with maintaining and running your own warehouse and fulfillment team. Shorter shipping distances mean lower costs, faster delivery, and happier buyers. In a tariff-heavy economy, reducing final-mile costs is one of the smartest ways to preserve profit margins. Cahoot makes it easy and automatic.

    Additionally, traditional 3PLs come with steep storage and handling fees that eat into your margins, while Cahoot’s peer-to-peer fulfillment network is cheaper by design because the pricing model is based on “excess capacity” without the need to charge higher fees to cover warehouse leases, staff, and infrastructure. Especially in a volatile economic environment, peer-to-peer fulfillment lets you stay agile, scalable, and cost-efficient without locking into long-term warehousing commitments.

    Returns Without the Waste: Peer-to-Peer Returns

    Returns can be a huge margin killer, especially when reverse logistics are inefficient and expensive. Cahoot transforms the returns process with peer-to-peer returns, rather than asking customers to send items back to the merchant, they are sending their returns forward to the next customer purchasing the item. This eliminates 2 additional shipping trips (back to the warehouse and then forward to the next customer), dramatically reducing logistics costs and carbon emissions. Plus, it speeds up resale cycles and keeps your operations lean, even as costs everywhere else are going up.

    One Platform, Many Savings: Flexible, AI-Powered, Built to Adapt

    Cahoot isn’t just a fulfillment solution, it’s a full ecosystem designed to help ecommerce businesses thrive in unpredictable markets. Its AI-powered platform adapts to your needs, automates complex logistics tasks, and integrates seamlessly with your existing tech stack. Whether you’re optimizing shipping, managing inventory, or navigating tariff-induced supply chain changes, Cahoot provides a centralized, scalable platform that drives efficiency at every step. One platform, many ways to save. And right now, that flexibility is more valuable than ever.

    Long-Term Survival Strategies for Ecommerce Businesses

    An illustration of two tariff monsters tormenting an ecommerce Seller with higher import/export costs

    In the face of rising tariffs and an increasingly volatile trade environment, long-term survival strategies are essential for ecommerce businesses. By implementing proactive strategies, businesses can not only weather economic downturns but may even emerge more robust.

    Three key strategies for long-term survival include shifting to digital services, stockpiling important inventory, and diversifying suppliers. These strategies are designed to help ecommerce merchants reduce costs, optimize operations, and maintain competitive pricing in a challenging economic environment.

    Shifting to Digital Services

    Transitioning to digital services can help ecommerce businesses minimize fixed operational costs and increase scalability. This shift enables businesses to streamline operations and decrease overhead costs, making them more agile and responsive to market changes. By embracing digital services, ecommerce merchants can reduce reliance on physical infrastructure and lower their operational expenses.

    Pivoting towards leaner, more flexible solutions is a smart way to cut costs and scale efficiently. Examples include:

    1. Migrate to Cloud-Based Platforms

    Replace on-premise software and servers with cloud-based ecommerce platforms, ERPs, and customer service tools. Cloud services reduce upfront capital investment and allow you to pay only for what you use, scaling up or down as needed.

    1. Outsource Fulfillment to On-Demand Networks

    Transition from self-managed or long-term warehouse leases to digital fulfillment networks like Cahoot. This eliminates overhead and enables dynamic fulfillment based on demand, location, and cost efficiency.

    1. Use AI-Driven Shipping Software

    Automate rate shopping and carrier selection with software that finds the cheapest shipping option per order in real-time. This cuts both costs and labor while ensuring reliable delivery.

    1. Adopt Virtual Customer Support Tools

    Implement AI chatbots and ticketing systems to handle routine customer inquiries. This reduces the need for large support teams and provides 24/7 service without adding headcount.

    1. Digitize Returns Management

    Switch to solutions that facilitate local, consolidated returns, or more cost-effective programs such as peer-to-peer returns, to minimize reverse logistics costs and warehouse congestion.

    1. Automate Marketing and Sales Funnels

    Leverage digital ad platforms, email automation, and CRM tools to reduce manual campaign management. Focus your team’s effort on strategy while the tools handle execution.

    By embracing digital-first, flexible services, ecommerce merchants can drastically lower their fixed cost base and create a foundation for scalable, resilient growth, even in a turbulent economy.

    Bulk Warehousing Before Tariff Enforcement

    Storing larger quantities of inventory before tariffs take effect can help ecommerce businesses avoid abrupt cost hikes associated with new tariffs. Stocking inventory in large quantities before tariffs take effect can mitigate the risk of price hikes. This approach allows businesses to maintain stable pricing and avoid supply shortages.

    Look into low-cost outsourced warehousing for bulk inventory to keep costs down. The point of stockpiling is to mitigate the risk of price spikes, not to shift the cost from tariffs to warehousing costs. There’s no shortage of third-party logistics providers (3PLs) that are hungry for your low-overhead storage project and willing to get very competitive with pricing, so stockpiling inventory before tariffs get out of control can indeed help businesses maintain their competitive edge and optimize their supply chain management.

    Diversifying Supplier Base

    Explore reshoring and nearshoring as strategies to diversify supply sources and mitigate risks associated with international tariffs. This approach allows businesses to maintain more control over their supply chains and reduce dependency on single-source suppliers.

    And it may help keep pricing in check by pitting them against one another for your business. By diversifying their supplier base, ecommerce merchants can better navigate the complexities introduced by new tariff rates, maintain agility in supply chain management, and ensure a steady supply of products.

    Summary

    The impact of Trump’s tariffs on the U.S. economy will be profound, affecting jobs, prices, and trade relations. From immediate economic effects to shifts in global trade relationships, the tariffs have created a complex and challenging environment for businesses and consumers alike. For small and medium-sized businesses, the rise in costs and operational challenges necessitates strategic adjustments to maintain profitability.

    Ecommerce merchants, in particular, must adopt proactive strategies to navigate the complexities introduced by new tariff rates. By auditing SKUs, delaying non-essential investments, and bulk warehousing before enforcement, businesses can better manage their resources and mitigate the financial impact of tariffs. Additionally, leveraging innovative solutions such as those provided by Cahoot can help ecommerce merchants optimize their operations and maintain their competitive edge.

    In conclusion, surviving the tariff storm requires cutting costs, not corners. By implementing long-term survival strategies and leveraging technology, businesses can adapt to the changing economic landscape and emerge stronger. The key to success lies in resilience, adaptability, and a proactive approach to managing the complexities introduced by new tariff rates.

    Frequently Asked Questions

    How have Trump’s tariffs impacted the U.S. economy?

    Trump’s tariffs have raised costs for businesses and consumers, contributing to a projected 0.5% decrease in U.S. GDP in 2025. This has complicated pricing strategies and adversely affected business investments.

    What are the immediate economic effects of the tariffs?

    The immediate economic effects of tariffs include increased costs for businesses and higher consumer prices, which are estimated to lead to an economic contraction of 1% in the U.S.

    How have global trade relationships been affected by the tariffs?

    Global trade relationships have been significantly affected by retaliatory tariffs, prompting countries to reevaluate and seek new partnerships to counterbalance the impact of U.S. tariffs. This has led to shifts in trade dynamics and a more fragmented global trade environment.

    What strategies can ecommerce merchants adopt to navigate tariffs?

    Ecommerce merchants should audit their SKUs, delay non-essential investments, and consider bulk warehousing strategies to effectively manage resources and mitigate the financial impact of tariffs. Implementing these tactics, along with the adoption of technology to reduce costs, will help safeguard business operations against tariff challenges.

    How can Cahoot help ecommerce merchants mitigate tariff impacts?

    Cahoot can significantly help ecommerce merchants mitigate tariff impacts by providing cost-saving shipping solutions and intelligent cartonization, which optimize operations and reduce overall expenses. By outsourcing ecommerce order fulfillment to a distributed network of warehouses, Cahoot helps put every extra penny back into profit margins to help merchants adapt to changes in tariff rates efficiently.

    What are the reciprocal tariffs announced on Liberation Day?

    Below are the list of tariffs announced. The countries not listed in this table receive a 10% import tariff.

    Country
    New US Tariffs (%)
    Tariffs charged to the USA
    Reunion
    73
    37
    Lesotho
    50
    99
    Saint Pierre and Miquelon
    50
    99
    Cambodia
    49
    97
    Laos
    48
    95
    Madagascar
    47
    93
    Vietnam
    46
    90
    Sri Lanka
    44
    88
    Myanmar
    44
    88
    Falkland Islands
    41
    82
    Syria
    41
    81
    Mauritius
    40
    80
    Iraq
    39
    78
    Guyana
    38
    76
    Bangladesh
    37
    74
    Serbia
    37
    74
    Botswana
    37
    74
    Liechtenstein
    37
    73
    Thailand
    36
    72
    Bosnia and Herzegovina
    35
    70
    China
    34
    67
    North Macedonia
    33
    65
    Taiwan
    32
    64
    Indonesia
    32
    64
    Fiji
    32
    63
    Angola
    32
    63
    Switzerland
    31
    61
    Moldova
    31
    61
    Libya
    31
    61
    South Africa
    30
    60
    Algeria
    30
    59
    Nauru
    30
    59
    Pakistan
    29
    58
    Norfolk Island
    29
    58
    Tunisia
    28
    55
    Kazakhstan
    27
    54
    India
    26
    52
    South Korea
    25
    50
    Japan
    24
    46
    Malaysia
    24
    47
    Brunei
    24
    47
    Vanuatu
    22
    44
    Côte d’Ivoire
    21
    41
    Namibia
    21
    42
    European Union
    20
    39
    Jordan
    20
    40
    Nicaragua
    18
    36
    Zimbabwe
    18
    35
    Israel
    17
    33
    Philippines
    17
    34
    Zambia
    17
    33
    Malawi
    17
    34
    Mozambique
    16
    31
    Norway
    15
    30
    Venezuela
    15
    29
    Nigeria
    14
    27
    Equatorial Guinea
    13
    25
    Chad
    13
    26
    Democratic Republic of the Congo
    11
    22

    Written By:


    Indy Pereria

    Indy is the Head of People Operations at Cahoot, fosters innovation, develops recruitment strategies, and scales the company’s culture.

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    Best Returns Management Software for 2025

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    Handling product returns can be a challenge for any business, but the right returns management software can turn this process into an opportunity. By automating key tasks—like return authorizations, inventory updates, and refund processing—this software makes returns smoother for both you and your customers. The result? Improved efficiency, lower costs, and happier customers.

    In this article, we’ll break down the top benefits of using returns management software, explore key features to look for, and share best practices to help you streamline your return process.

    What is Returns Management?

    Returns management refers to the process of handling product returns and managing the associated logistics and operations. It encompasses the entire ecommerce order return process, from the initial return request to the final resolution, whether that be a refund, exchange, or store credit. Effective returns management is crucial for ecommerce business as it directly impacts customer satisfaction and the overall customer experience. By efficiently managing returns, businesses can reduce return costs and streamline the entire return process, ensuring a smooth and hassle-free experience for their customers while preventing revenue erosion.

    The Returns Process

    The returns process typically consists of 7 important steps that impact how smooth and efficient the return experience is:

    1. Return Authorization: The customer initiates a return request, and the retailer authorizes the return based on their return policy.
    2. Return Packaging: The customer packages the item for return, often using a return shipping label or QR code provided by the retailer.
    3. Reverse Logistics: The returned item is shipped back to the retailer or a designated return location, or dropped off at an attended kiosk such as Staples, FedEx Office, Kohl’s, etc.
    4. Inspection and Assessment: The returned item is inspected and assessed for any damage or defects.
    5. Refund or Exchange: Depending on the retailer’s return policy, the customer is offered a refund, exchange, or store credit.
    6. Restocking or Disposal: The returned item is either restocked, disposed, liquidated, or donated, based on its condition.
    7. Analytics and Improvement: Retailers analyze returns data to identify trends and areas for improvement, optimizing the returns process over time.

    By managing each stage effectively, businesses can enhance the customer experience and streamline their returns process.

    Why a Seamless Returns Process Matters

    A smooth return process is key to building customer trust and loyalty. A seamless returns process is a crucial part of the post-purchase experience, significantly impacting customer satisfaction and loyalty. Shoppers want to know that if they need to send something back, it’ll be easy and hassle-free. Returns management software helps businesses deliver on this expectation by simplifying the process for both customers and employees.

    With self-service options like a user-friendly return portal, customers can initiate and track returns on their own—without needing to contact support. Real-time updates keep them informed every step of the way, reducing frustration and increasing confidence in your brand.

    Even better, customizable return policies let businesses tailor the process to fit different products, customers, or situations, making the experience feel more personal and seamless.

    Key Features of a Great Returns Management System

    The best returns management solutions are packed with features that make the process more efficient and cost-effective. Here are some of the key capabilities to look for:

    • Automated Inventory Updates: As returns come in, the system automatically updates stock levels, helping you manage resale opportunities more effectively.
    • Instant Refund Processing: Once a return is approved, the refund process can be initiated immediately, reducing manual work and enhancing customer satisfaction.
    • Seamless Integrations: The best systems sync with your ecommerce platform, POS system, and/or logistics tools, ensuring accurate tracking and streamlined operations.
    • Batch Returns & Consolidation: Some platforms allow customers to combine multiple items into a single return shipment, cutting shipping costs and improving efficiency.
    • User-Friendly Self-Service Portals: A simple, intuitive return portal makes it easier for customers to initiate and track returns independently.

    By leveraging these features, businesses can cut costs, improve efficiency, and enhance the customer experience all at once.

    How Returns Management Software Saves Time & Money

    One of the biggest advantages of returns management software is how much time and money it saves. By optimizing the returns process, businesses can enhance the customer journey, leading to higher satisfaction and repeat purchases. Automation eliminates the need for manual processing, reducing labor costs and speeding up the entire return process.

    Other cost-saving benefits include:

    • Lower Shipping Costs: Optimized logistics and consolidated returns mean fewer shipments, reducing expenses.
    • Better Inventory Control: Real-time tracking of returned goods prevents overstocking and inventory mismatches.
    • Reduced Customer Service Workload: Self-service portals handle most returns, freeing up your team for more complex issues.
    • Prevent Revenue Erosion: Offering customers exchanges or store credit (including store credit bonuses) retains revenue that would have otherwise been lost to a refund.

    By optimizing these areas, businesses can turn returns from a costly burden into a streamlined, cost-efficient process.

    Benefits of Returns Management Software

    Returns management software offers numerous benefits to ecommerce businesses, making the returns process more efficient and customer-friendly:

    1. Complete Visibility of Returns Data: Real-time tracking and visibility of returns data enables retailers to make informed decisions and manage returns more effectively.
    2. Actionable Insights: The software analyzes returns data to identify trends and areas for improvement, helping retailers optimize their returns process, product offerings and quality, and listing management.
    3. Time-Saving Automation of Tasks: Automation of tasks such as return authorization, return shipping label generation, and refund processing saves time and reduces manual errors.
    4. Integration with Warehouse Management Systems: Seamless integration with warehouse management systems ensures efficient returns processing and inventory management.
    5. Management of the Entire Returns Lifecycle: The software manages the entire returns lifecycle, from the initial return request to the final resolution.
    6. Option to Offer Store Credit or Refunds: Retailers can offer store credit or refunds, depending on their return policy, providing flexibility to customers.
    7. Customer Communication and Transparency: Keeping customers informed throughout the returns process improves customer satisfaction and loyalty.

    By leveraging these benefits, businesses can enhance their returns process, reduce return costs, and improve overall customer satisfaction.

    Using Data & Analytics for Smarter Returns Management

    One of the most powerful aspects of returns management software is real-time data analytics. Businesses can track return trends, identify problem areas, and make informed decisions that reduce return rates and improve inventory management.

    For example, analyzing return reasons can help companies adjust product descriptions, improve quality control, or refine sizing charts, ultimately cutting down on unnecessary returns.

    Additionally, tracking return fraud patterns allows businesses to put safeguards in place, such as requiring photo verification or flagging repeat offenders.

    With the right data, businesses can continuously refine their returns process, making it more efficient over time.

    Customization & Flexibility to Fit Your Business Needs

    Every business has unique return challenges, which is why customization is key. The best returns management solutions allow you to:

    • Define return policies based on product categories or customer types.
    • Set up automated workflows for different return scenarios.
    • Integrate with supply chain and warehouse systems for seamless tracking.

    For example, companies using ReverseLogix or other flexible solutions can easily manage returns across retail stores, ecommerce channels, and third-party logistics (3PL) partners, ensuring consistency no matter where a return originates.

    Protecting Your Business from Return Fraud

    Return fraud is a growing issue, but returns management software helps businesses stay ahead of scammers. Some fraud prevention features include:

    • Photo Verification: Customers upload pictures before returning an item, ensuring authenticity.
    • Suspicious Activity Alerts: The system flags unusual return behavior so you can investigate.
    • Customizable Return Fees: Retailers can charge a restocking fee for serial returners, discouraging abuse.

    With these safeguards in place, businesses can reduce fraud-related losses while keeping returns fair for honest customers.

    Better Inventory Management Through Smarter Returns

    Returns can disrupt inventory flow, but a good returns management system helps businesses stay in control. By automatically updating stock levels and processing returned items quickly, retailers can:

    • Avoid overstocking and sell returned items faster
    • Improve demand forecasting by analyzing return patterns
    • Ensure defective items are properly routed for repair, recycling, or disposal

    An efficient return process means less wasted inventory and more opportunities to recapture revenue.

    Sustainability & Eco-Friendly Returns

    Sustainability is becoming a major factor in returns management, with businesses looking for ways to reduce waste. Eco-friendly returns solutions can include:

    • Refurbishing & Reselling Returned Items: Instead of discarding returned products, businesses can repair and resell them.
    • Routing Returns to Recommerce Channels: Sending lightly used items to secondhand marketplaces instead of landfills.
    • Automating Sustainable Disposition: Using software to prioritize resale, liquidation, donation, or recycling based on item condition.

    Not only do sustainable practices help the planet, but they also boost brand reputation and attract environmentally conscious customers.

    Peer-to-Peer Returns: A Game-Changer for Ecommerce

    A newer trend in returns management is peer-to-peer (P2P) returns, where customers ship their new condition returned items directly to the next purchasing customer rather than sending them back to the retailer, removing substantial cost and carbon emissions from the reverse logistics process. And, this eco-friendly approach minimizes waste and appeals to environmentally conscious consumers.

    This approach:
    ✔ Reduces return shipping and processing costs
    ✔ Minimizes environmental impact
    ✔ Minimizes waste while decreasing the time to resale
    ✔ Creates a more convenient customer experience

    While P2P returns require careful implementation to prevent fraud, they offer a fresh, innovative way to handle returns efficiently.

    Top Returns Management Software for 2025

    The top returns management software for 2025 includes:

    1. Happy Returns: Best known for its convenient Return Bar® attended kiosk service at The UPS Store®, Staples, Ulta Beauty, Giant Eagle, among others, that accepts boxless in-person returns while providing a lower cost and more efficient reverse logistics solution for online Sellers.
    2. Narvar: This software automates the return process, provides personalized return options, and offers store credit or refunds for improved customer choice.
    3. ReturnBear: A versatile returns management software that handles customer returns efficiently, including return requests, return shipping, and refund processing.
    4. Loop: Known for its extensive portfolio of brands on Shopify, Loop Returns offers a leading return portal for RMA initiation and automation.
    5. AfterShip: A full-suite returns solution that automates the returns experience for customers with greater ease-of-use, and transparent pricing.

    These solutions offer a range of features to streamline the returns process, improve customer satisfaction, and reduce return costs.

    Choosing and Implementing a Returns Management System

    Selecting and implementing a returns management system requires careful consideration of several key factors:

    1. Integration with Existing Setup: Ensure the returns management software integrates seamlessly with your ecommerce platform and inventory management system.
    2. Analytics and Reporting Features: Look for software that provides real-time tracking and visibility of returns data, enabling informed decision-making.
    3. Customization Options: The software should be customizable to fit your specific business needs, including return policies and procedures.
    4. Scalability: Choose a solution that can grow with your business, handling increased return volumes and complexity.
    5. Pricing: Consider the value for money, including upfront costs and ongoing fees.
    6. Support: Ensure you have access to support during implementation and onboarding, including a dedicated customer success manager.
    7. User-Friendly Interface: The software should have an intuitive and straightforward interface, ensuring a seamless onboarding process.
    8. Automation Capabilities: Look for software that automates repetitive tasks, saving time and reducing manual errors.

    The right returns solution makes a big difference, helping businesses turn returns into a competitive advantage rather than a cost burden. By considering these key aspects, ecommerce businesses can implement a returns management system that improves customer satisfaction, reduces return costs, and optimizes the returns process.

    Final Thoughts

    A well-managed returns program and policy is essential for keeping customers happy, reducing costs, and running an efficient business. Returns management software helps streamline the process, prevent fraud, and improve inventory control — all while enhancing the customer experience.

    By choosing the right system and following best practices, businesses can transform returns from a headache into an opportunity for growth, efficiency, and sustainability.

    Ready to upgrade your returns process? Investing in returns management software is a smart move for any business looking to stay ahead in today’s competitive market.

    Frequently Asked Questions

    What is a return management system?

    A Returns Management System (RMS) is a software solution designed to help ecommerce businesses manage the process of product returns. Using an RMS automates and streamlines the returns process, making it easier for businesses to manage the process and for customers to initiate returns.

    How do small businesses handle returns?

    • Understand Your Customers’ Needs.
    • Make Your Return and Refund Policy Easy to Find.
    • Offer a Reasonable Time Frame.
    • Outline Items That Are Returnable vs NOT Returnable.
    • Consider Offering Free Returns.

    What is the most common return timeframe?

    The standard return policy typically ranges from 15 to 30 days, with some businesses offering up to 90 days or even 365 days with a receipt. Some businesses offer longer return time frames around the holiday season, recognizing that many products will be given as gifts and purchased well in advance. It’s important to check the specific policy of the store before making a purchase to ensure clarity on return timeframes.

    What is Buy Online, Return in Store (BORIS)?

    BORIS is an acronym that stands for Buy Online, Return In-Store. It’s an omnichannel strategy that belongs to the same group of ‘online-to-offline’ shopping experiences as BOPIS — Buy Online, Pick Up In-Store — and ROPIS — Reserve Online, Pick Up In-Store. In other words, it’s a service that enables customers to purchase goods online and return in-store — all as easy as traditional shopping would be.

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    Adapting to Amazon’s New Order Handling Capacity Changes

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    Amazon made a significant change to how it manages Seller-fulfilled order volume by implementing automatic minimum thresholds for order handling capacity. Since February 24, 2025, this new system was put in place to help Sellers align their fulfillment promises with their actual capabilities. This change came with both opportunities and challenges, requiring Sellers to stay informed and adapt their strategies accordingly.

    Amazon’s Order Handling Capacity Now Based on Historicals

    The new policy introduced an automatic minimum threshold for a Seller’s order handling capacity, based on their average daily orders over the past 30 days. Amazon recalculates this figure weekly to ensure it remains aligned with the Seller’s fulfillment capabilities. If a Seller’s handling capacity falls below the calculated minimum, Amazon automatically adjusts it to better reflect recent performance. Sellers still have the flexibility to set higher order limits if they choose.

    This feature was designed to help Sellers manage realistic fulfillment expectations, preventing scenarios where an unexpected influx of orders resulted in late shipments or negative customer experiences. It applies exclusively to Standard and Free Economy shipping methods, excluding Seller Fulfilled Prime and Premium Shipping orders.

    What This Means for Sellers

    For Sellers, this change represents a shift in how fulfillment capacity is determined. Historically, Sellers could manually adjust their order handling limits based on their expected capabilities. Since this update, Amazon takes a more data-driven approach, automatically setting a baseline based on past performance.

    For Sellers with strong fulfillment records, this can be an advantage. If they consistently meet or exceed expectations, they may find their order capacity increasing over time, allowing them to accept more orders without negatively impacting delivery promises. However, Sellers who have struggled with fulfillment issues, even temporarily, will see their capacity restricted. This will be a challenge for businesses that experience seasonal spikes or sudden demand surges that aren’t reflected in historical data.

    The Pros and Cons of Amazon’s Automatic Capacity Handling

    There are both advantages and potential downsides to Amazon’s automatic handling capacity adjustment.

    Pros: Avoid Overpromising on Delivery Dates

    One of the most notable benefits is that it helps prevent over-commitment. Sellers have more realistic fulfillment expectations set automatically, reducing the risk of late shipments and potential penalties.

    Additionally, customers receive more accurate delivery estimates, improving overall satisfaction. By automatically recalibrating capacity, Amazon is attempting to create a more reliable shopping experience where buyers receive their items within the promised timeframe.

    Cons: Fulfillment Setbacks Haunt Sellers Longer

    However, the automated approach also introduces some challenges. Sellers who experience sudden growth or occasional high-volume periods will find their handling capacity constrained if the system doesn’t quickly recognize their increased ability to fulfill orders. Furthermore, businesses that have recently dealt with supply chain disruptions or temporary fulfillment delays may be penalized by having their capacity automatically reduced, even if their operations have since stabilized.

    How Sellers Can Stay Proactive & Maintain High Performance

    Sellers must stay proactive. Regularly monitoring order handling settings within Seller Central are crucial to ensure that automatic adjustments align with actual business capabilities. If a Seller notices a significant drop in their capacity limit, they should assess whether past fulfillment issues may have contributed to the change and work on improving those metrics.

    Sellers can also manually increase their order handling capacity if they anticipate higher demand, such as during holiday seasons or promotional events. Since the automatic threshold is only a minimum, having the ability to set a higher limit allows Sellers to maintain control over their operations while still benefiting from the safeguards Amazon has introduced.

    Another key strategy is maintaining a strong fulfillment performance record. Fast, reliable shipping, low cancellation rates, and high customer satisfaction help ensure that Amazon’s system views a Seller as capable of handling higher volumes. Partnering with a high-capacity and robust fulfillment partner (3PL) can help if meeting the expectations is challenging. Sellers who consistently meet fulfillment expectations are in a better position to scale their operations.

    Summary

    Amazon’s decision to implement automatic minimum thresholds for order handling capacity is a shift toward a more data-driven approach that prioritizes more accurate fulfillment capacity and better protection against over-commitment. It also places added pressure on Sellers to maintain consistent shipping and delivery performance.

    Sellers should focus on improving their order fulfillment metrics, proactively managing capacity settings, and staying ahead of any potential limitations. By understanding how this works and taking the necessary steps to optimize operations, Sellers ensure they remain competitive while continuing to deliver a high-quality experience for their customers.

    Frequently Asked Questions

    What are the Amazon order handling requirements?

    Amazon’s order handling requirements include strict guidelines for order processing times, packaging standards, and shipping methods. These guidelines aim to streamline the fulfillment process and enhance the customer experience.

    How can sellers optimize their shipping methods to meet Amazon’s requirements?

    Sellers can optimize their shipping methods by selecting the most efficient and cost-effective shipping options, leveraging Amazon’s shipping services such as Fulfillment by Amazon (FBA), and ensuring that orders are shipped promptly.

    What strategies can sellers use to adapt to seasonal demand fluctuations?

    To adapt to seasonal demand fluctuations, sellers should plan ahead and ensure they have sufficient inventory and resources to handle increased order volumes. This may involve hiring additional staff, optimizing inventory levels, and leveraging technology to manage peak periods effectively.

    Written By:


    Indy Pereria

    Indy is the Head of People Operations at Cahoot, fosters innovation, develops recruitment strategies, and scales the company’s culture.

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    Tariff Squeeze: How Can Retailers Still Remain Profitable

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    Recently, tariffs have become a big topic in conversations about trade worldwide. A post by Manish Chowdhary on LinkedIn got many people talking about how tariffs affect goods from China and change how companies get their products. As governments change trade rules to help their businesses, companies face higher costs and issues getting supplies. This new situation means that businesses must think carefully about where they get their products and how to manage risks.

    The Rising Impact of Tariffs

    Tariffs are designed to level the playing field for domestic producers and counteract perceived unfair trade practices. However, their real-world impact is far more complex. As Chowdhary’s post highlights, the imposition of tariffs on Chinese goods has resulted in a noticeable slowdown in Chinese import activity. This deceleration is not just a matter of shifting numbers on a balance sheet—it signals a significant transformation in the global trade ecosystem.

    Rethinking Global Supply Chains

    China has been the go-to place for manufacturing for many years because it provides cheaper products and many options. Companies relied heavily on Chinese factories to keep prices low. But now, with tariffs raising the cost of imports, businesses have to rethink their dependence on China. These changes affect prices, increasing operating costs and lengthening lead times, creating challenges in markets where every penny counts.

    Diversification as a Strategic Imperative

    Because of these tariffs, companies are looking for new ways to get their products. This means finding different suppliers to avoid being too dependent on one country. By spreading out their production, businesses can protect themselves from sudden changes in trade rules. This new strategy could also lead to exciting innovations as companies use technology and data to be more flexible. This shift towards a more diversified yet efficient supply chain model could foster a new era of innovation as businesses invest in technology and data analytics to enhance flexibility and responsiveness.

    Leveraging Technology and Data Analytics

    Looking for suppliers in different countries forces businesses to examine their supply chain management closely. Tariffs drive this change, so companies invest in technology that helps them predict problems and handle their inventory better. A strong, data-driven approach to supply chain management is becoming essential in a world where trade rules can change quickly. Advanced technology can help spot potential issues and provide helpful information so businesses can stay agile.

    Global Trade Implications

    These changes due to tariffs can also affect how countries collaborate in trade. While tariffs aim to protect local markets, they can also create tension between countries. Fewer imports from China might lead to retaliations or more trade barriers, making international trade more complicated. Therefore, business leaders and policymakers must balance helping local industries and maintaining good trade relations with other countries.

    Building Resilience in a Shifting Landscape

    The need for businesses to be strong and adaptable has never been more critical. Companies willing to change and find new solutions can turn challenges into advantages. By rethinking how they source products and using new technologies, businesses can handle the challenges brought on by tariffs and set themselves up for future growth. This situation teaches us the importance of being flexible, ready, and open to change.

    Conclusion: Adapting for Future Success

    Manish Chowdhary’s post highlights a crucial moment in global trade. Tariffs have changed the amount of goods from China, forcing businesses to think critically about their supply strategies. As companies face these challenges, finding new suppliers, using advanced technology, and being flexible are essential. The future of trade will belong to those who can notice changes, adapt quickly, and turn challenges into chances for success. In a world where trade rules constantly evolve, the ability to innovate and rethink supply chains isn’t just an advantage—it’s a must.

    Written By:


    Indy Pereria

    Indy is the Head of People Operations at Cahoot, fosters innovation, develops recruitment strategies, and scales the company’s culture.

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