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The Evolution of Thrifting: Why Secondhand Shopping Has Gone Mainstream

From “Thrift Shame” to “Treasure Hunt”: How We Got Here
What’s Fueling the Secondhand Surge?
Not Just Clothes: Recommerce is Expanding
Brands Are Getting Involved, And Winning
Tariffs, Trade, and the Return of the Local Supply Chain
Challenges Ahead: Will It Scale?
Retail Takeaways: What Leaders Need to Do Now
Resale vs. Retail – By the Numbers
Final Thought
Glossary: Recommerce Terms You Should Know
Frequently Asked Questions

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

Understand your resale customer. They’re already buying and selling your products. Are you enabling them? Or ignoring them?
Audit your supply chain for circularity: Can your products support second, third, or fourth lives?
Explore RaaS partnerships (Resale-as-a-Service): Trove, Recurate, Archive, and ThredUp can help launch resale with minimal lift.
Integrate resale into your CX: Consider buy-back incentives, branded resale platforms, and Peer-to-Peer Return options.
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

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 Pereira

Indy Pereira helps ecommerce brands optimize their shipping and fulfillment with Cahoot’s technology. With a background in both sales and people operations, she bridges customer needs with strategic solutions that drive growth. Indy works closely with merchants every day and brings real-world insight into what makes logistics efficient and scalable.

Turn Returns Into New Revenue

Convert returns into second-chance sales and new customers, right from your store.

Tariff Shock 2025: Understanding the Tariff Shopper’s Mindset

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 Pereira

Turn Returns Into New Revenue

Convert returns into second-chance sales and new customers, right from your store.

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

Rethinking the Game: Why Domestic Sourcing Makes Sense in 2025
Step-by-Step: How to Start Sourcing Domestically
Can You Stay Profitable While Sourcing Locally? Absolutely.
The Pros and Cons of Reshoring
Where to Find Domestic Suppliers: Your 2025 Resource Guide
Real-World Examples of Domestic Sourcing in Action
Final Thoughts: Reshoring as a Competitive Edge
Frequently Asked Questions (FAQs)

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 Pereira

Turn Returns Into New Revenue

Convert returns into second-chance sales and new customers, right from your store.

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

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:

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.

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.

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.

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.

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.

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 Pereira

Turn Returns Into New Revenue

Convert returns into second-chance sales and new customers, right from your store.

Best Returns Management Software for 2025

What is Returns Management?
The Returns Process
Why a Seamless Returns Process Matters
Key Features of a Great Returns Management System
How Returns Management Software Saves Time & Money
Benefits of Returns Management Software
Using Data & Analytics for Smarter Returns Management
Customization & Flexibility to Fit Your Business Needs
Protecting Your Business from Return Fraud
Better Inventory Management Through Smarter Returns
Sustainability & Eco-Friendly Returns
Peer-to-Peer Returns: A Game-Changer for Ecommerce
Top Returns Management Software for 2025
Choosing and Implementing a Returns Management System
Final Thoughts
Frequently Asked Questions

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:

Return Authorization: The customer initiates a return request, and the retailer authorizes the return based on their return policy.
Return Packaging: The customer packages the item for return, often using a return shipping label or QR code provided by the retailer.
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.
Inspection and Assessment: The returned item is inspected and assessed for any damage or defects.
Refund or Exchange: Depending on the retailer’s return policy, the customer is offered a refund, exchange, or store credit.
Restocking or Disposal: The returned item is either restocked, disposed, liquidated, or donated, based on its condition.
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:

Complete Visibility of Returns Data: Real-time tracking and visibility of returns data enables retailers to make informed decisions and manage returns more effectively.
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.
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.
Integration with Warehouse Management Systems: Seamless integration with warehouse management systems ensures efficient returns processing and inventory management.
Management of the Entire Returns Lifecycle: The software manages the entire returns lifecycle, from the initial return request to the final resolution.
Option to Offer Store Credit or Refunds: Retailers can offer store credit or refunds, depending on their return policy, providing flexibility to customers.
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:

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.
Narvar: This software automates the return process, provides personalized return options, and offers store credit or refunds for improved customer choice.
ReturnBear: A versatile returns management software that handles customer returns efficiently, including return requests, return shipping, and refund processing.
Loop: Known for its extensive portfolio of brands on Shopify, Loop Returns offers a leading return portal for RMA initiation and automation.
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:

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

Written By:

Indy Pereira

Turn Returns Into New Revenue

Convert returns into second-chance sales and new customers, right from your store.

Adapting to Amazon’s New Order Handling Capacity Changes

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 Pereira

Turn Returns Into New Revenue

Convert returns into second-chance sales and new customers, right from your store.

Tariff Squeeze: How Can Retailers Still Remain Profitable

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 Pereira

Turn Returns Into New Revenue

Convert returns into second-chance sales and new customers, right from your store.

PONY UP Act: USPS Could Be Paying for Late Deliveries

Mail delivery has become increasingly unreliable, and lawmakers are taking action. Legislators have reintroduced the PONY UP Act, a bold legislative effort to address chronic delays in postal service by holding the United States Postal Service financially responsible for late deliveries. The proposal has sparked discussions across industries, particularly within the e-commerce sector, which relies heavily on timely delivery to meet customer expectations. If passed, the legislation could introduce new financial liabilities for USPS while reshaping the landscape for online sellers and consumers alike.

Understanding the PONY UP Act

Formally known as the “Penalizing Oversight Neglecting Your Universal Postal Service” (PONY UP) Act, this bill seeks to reimburse consumers for late fees incurred due to delayed USPS deliveries. Specifically, it would require USPS to cover penalties arising from tardy bill payments (e.g., that pesky $35 late fee when a credit card payment is not received on time) when the delay results from late mail service. The legislation is in response to many complaints about unreliable delivery service that has led to financial burdens for its users.

The regulation would apply to situations where a bill, notice, or payment was mailed with ample time to arrive before its due date but was delivered late. It also proposes an online and in-person claims process for reimbursement and an appeal mechanism for denied claims. Additionally, the legislation mandates annual reports on USPS delivery performance to improve transparency and oversight.

Why the PONY UP Act is Being Introduced

USPS has faced increasing scrutiny over delivery inefficiencies, particularly in rural areas, which have frequent delays. Audits have revealed significant lags in sorting and delivering mail. Reports cite instances of late medical payments, utility bills, and even time-sensitive shipments such as live poultry for agricultural businesses. These delays have led to growing frustration among consumers and businesses that depend on consistent delivery expectations for financial stability and operational continuity.

Legislators argue that the PONY UP Act will create a stronger incentive for USPS to prioritize service reliability. By attaching financial consequences to delivery failures, the bill aims to ensure that USPS meets its congressionally mandated six-day delivery obligation while providing relief to those negatively affected by missed service level agreements (SLAs).

Potential Impacts on E-Commerce

If the PONY UP Act becomes law, it could mean several things for the e-commerce industry, which relies heavily on USPS for daily business operations:

Improved Delivery Performance: The prospect of financial penalties may push USPS to improve efficiency. Fewer delays translate to increased consumer confidence in delivery expectations for online purchases.
Rising Shipping Costs: USPS may need to increase shipping rates to offset potential investments required to meet the expectations established by law. Those fees would be passed onto e-commerce businesses, pushing operational costs higher and creating margin pressure for merchants of small, light, and inexpensive items that are heavily reliant on USPS for affordable shipping solutions to turn a profit. They may be unduly forced to adjust product and pricing strategies and/or explore alternative carriers to remain viable.
Greater Emphasis on Delivery Guarantees: Online retailers that depend on USPS’s Priority Mail and other expedited services may benefit from increased accountability, as USPS would be compelled to meet delivery SLAs. Late deliveries are rarely the result of late shipping. E-commerce businesses, as a whole, are very good at meeting their customers’ on-time shipping obligations. As the carrier’s delivery reliability increases, so does consumer trust, resulting in more online shopping and, thus, more growth and prosperity for the industry.
Changes in Carrier Strategies: One e-commerce Seller told me, “Almost anything is better than USPS; I’m confident that a messenger pigeon is better than USPS.” As confidence in USPS increases, more merchants who had lost faith in the service and migrated to more reliable national carriers may reintroduce lower-cost USPS services to improve their profit margins.

Shipping and logistics are pivotal to the success of online retail, and any regulatory changes affecting USPS operations will inevitably profoundly impact the industry. Retailers and brands should monitor legislative developments and be prepared to adapt to potential cost increases or modifications to service levels.

Summary

The PONY UP Act is an effort to address longstanding issues with USPS delivery delays. It provides a mechanism for consumer protection while aiming to drive operational improvements. While primarily intended to target and remedy first-class mail service issues, its potential impact on e-commerce remains speculative. While increased accountability could enhance service reliability, shipping rate hikes could challenge Sellers dependent on affordable delivery options.

Written By:

Indy Pereira

Turn Returns Into New Revenue

Convert returns into second-chance sales and new customers, right from your store.

2025 NMFC Changes for LTL Freight Shipments (Improved Classification)

The National Motor Freight Classification (NMFC) system was established in 1936 to standardize Less-Than-Truckload (LTL) shipping. It uses a uniform system for classifying commodities to ensure consistency and fairness in pricing and handling. The NMFC system is undergoing a significant transformation for the first time in decades. Starting July 19, 2025, the industry will begin a multi-phased shift to a predominantly density-based classification system to achieve greater clarity and efficiency for all stakeholders in the LTL supply chain.

Traditionally, the NMFC has evaluated freight based on 4 characteristics: density, stowability, handling, and liability. While comprehensive, this complex system leads to frequent misinterpretations and disputes between shippers and carriers (which can drag out for years). The 2025 update intends to streamline this process by using density as the primary means for classifying the vast majority of freight shipments, while the remaining 3 characteristics will be reserved for classifying only the more complicated commodities. Let’s look at each in more detail:

Density refers to how much a shipment weighs compared to the space it occupies. Higher density typically results in a lower freight class and lower shipping costs because these shipments take up less space on a truck. For example, a small box of steel parts weighing 200 pounds in a small cubic space is denser than a large box of pillows weighing 200 pounds.
Handling considers how easy or difficult it is to move freight. Heavy, fragile, oddly shaped, or hazardous items often require special handling, increasing the freight class and, thus, the cost. For example, a granite countertop may need extra care due to its weight and fragility, while a box of sand is easier to manage despite being dense.
Stowability refers to how well the shipment fits in the carrier’s space (e.g., a 53-foot trailer). Again, size, shape, or transportation restrictions on certain items (e.g., hazardous materials) can make freight more challenging to load on a truck (think about a poorly played game of Tetris), leading to higher costs. For example, a shipment of pipes with irregular protrusions may leave unusable gaps in the truck. In contrast, neatly packed boxes fit more efficiently, allowing for the truck to move more items in a given move from point A to point B.
Liability measures the risk associated with the goods, including susceptibility to damage, potential to harm other goods, perishability, and/or hazardous considerations. For example, a shipment of fresh produce is perishable and requires more careful handling and faster transit than a carton of vitamins, which is durable and lower risk.

Key Changes Coming in 2025

The new NMFC structure introduces several significant changes, notably the expansion of the density scale. Moving from 11 subprovisions to 13, the system now includes classes 50 and 55 for heavy, dense products. Approximately 5,000 commodity listings will be affected, with an estimated 3,500 single-class items moving to the new subcategories.

The updated classification system maintains all 4 of the transportation characteristics. Still, as noted above, it aims to simplify the classification process by defaulting to density-based classification when NO special handling, stowability, or liability concerns are known. In addition, products requiring special consideration will be marked with a new unique identifier, making it easier to identify freight that needs additional attention.

The transition begins with the public release of Docket 2025-1 on January 30, 2025, and the final implementation becomes effective on Saturday, July 19, 2025. Docket 2025-1 is the list of NMFC codes considered for class changes based on the new density scale (nearly 40%). Once the list is finalized, changes will be made before the effective date.

Impact on Shippers and Third-Party Logistics (3PL) Companies

The simplified system should make identifying the correct freight classes for most shipments easier but still rely on accurately measuring and reporting “handling unit” dimensions and weight (pallet length, width, height, and weight) used to calculate density. In short, Shippers and 3PLs can multiply length x width x height in inches, divide by 1,728 to convert cubic inches to cubic feet, and then divide the shipment weight by the cubic feet to determine pounds per cubic foot (PCF). Don’t forget to include the ~6-inch height and ~30-pound weight of the pallets. Carriers will still remeasure/reweigh and reclass/rebill for underreported shipment details.

Preparing for the Transition

To prepare for these changes, organizations should:

Train Personnel: Educate staff on density calculations and measurement techniques. Providing training in advance will help reduce errors.
Start Now: Begin creating shipments with accurate dimensions and weights now (if it’s not already being done), so it becomes second nature and prevents tendering delays later.
Assess Current Shipping Pricing: Evaluate historical shipment pricing and contact carriers to identify areas where the updated density-based classifications might affect pricing.
Implement Reliable Processes: Establish workflows to ensure every shipment is measured, weighed, and documented correctly before leaving the dock. Documenting shipments early could help resolve disputes more quickly.

Summary

While the initial transition may present challenges, the long-term benefits of modernizing the NMFC system may be considerable. The simplified, standardized approach should reduce classification errors (and thus, disputes), improve and quicken communication between parties, and create a more efficient LTL shipping workflow. Future dockets beyond 2025-1 will continue to refine the system, particularly for freight with specific handling, stowability, or liability requirements. Guidance on the timing of future dockets (NMFC improvements) has not been announced.

Written By:

Indy Pereira

Turn Returns Into New Revenue

Convert returns into second-chance sales and new customers, right from your store.

Amazon FBA Reimbursement Changes Threaten Seller Payouts Starting March 2025

Starting March 10, 2025, Amazon will implement changes to its Fulfillment by Amazon (FBA) Inventory Reimbursement Policy, specifically, how they will pay out claims for lost or damaged inventory. The new plan is to start reimbursing Sellers the Manufacturing Cost for each item rather than the current reimbursement rate equal to the Amazon Sale Price. Manufacturing Cost is defined as the cost of sourcing a product from a manufacturer, wholesaler, or reseller, excluding expenses like shipping, handling, and customs duties. Some estimate that this change could slash reimbursements by as much as 60% on average, posing a substantial loss for FBA Sellers that rely on their new condition inventory to make new sales and earn new customers. The policy page will be updated to reflect the changes after the policy goes into effect in March.

Unfortunately, there is little that can be done other than to take prompt action between now and the transition date to maximize the reimbursements owed under the current policy.

The New Calculation

Amazon offers two ways to determine Manufacturing Costs:

Amazon Estimates: Amazon will determine cost based on a comprehensive evaluation of comparable products sold by Amazon and competitive Sellers.

Seller-Provided Costs: Starting January 2025, sellers can configure their manufacturing costs through a new “Manage Your Manufacturing Cost” page in the Inventory Defect and Reimbursement Portal. Amazon reserves the right to ask for proof to validate the amount.

It’s worth noting that the new payout rate applies to items that are lost or damaged before the item is sold on Amazon’s store. Items that are lost or damaged after a customer places an order will continue to be reimbursed at the Amazon Sales Price minus applicable fees.

While Amazon now offers automatic reimbursements for eligible items to save Sellers the time it takes to submit a claim, this new payout rate represents a substantial financial change. Thus, keep a keen eye on inventory status and submit claims promptly, or risk losing the opportunity to collect reimbursement at the current 2024 rate and safeguard entitled revenue.

The Losses Add Up

Some reports estimate that reimbursements can account for 1 – 3% of most Sellers’ revenue. With payouts dropping by 60% or more, even smaller Sellers stand to lose tens of thousands of dollars annually—more if they sell in high-value categories or products prone to pre-fulfillment damage.

New Administrative Burden

Sellers must now provide (and continuously manage) accurate manufacturing costs on new Seller Central screens to avoid discrepancies and limit inevitable disputes with Amazon. The alternative is accepting Amazon’s determination of value, which will not likely be a favorable number.

Time-Sensitive Claims

Reimbursement claims for lost or damaged items must be filed within 60 days of the reported loss or damage. Delays in filing claims could result in missed reimbursements.

To maximize recaptured value, Sellers should take the following steps:

File Claims Before the Deadline: Sellers must prioritize filing eligible claims ahead of the March 10 deadline to receive reimbursements based on the Amazon Sale Price.

Use Tools and Technology: Advanced auditing tools, such as those provided by GETIDA, can automate most identification and submission work. They can also help identify overlooked claims, ensure compliance, and maximize reimbursements.

Optimize Manufacturing Cost Reporting

Starting January 2025, Sellers should:

Use the “Manage Your Manufacturing Cost” page to input accurate costs.

Regularly review and update cost data to reflect market changes.

Prepare necessary documentation to support cost claims to expedite the reporting updates.

Summary

Whether you’re a veteran at this and have ample experience regularly submitting claims or haven’t gotten around to it yet, Amazon’s upcoming FBA Inventory Reimbursement Policy changes will hurt Sellers through reduced payout amounts–to tens of thousands of dollars on average. We shouldn’t be surprised that Amazon announces no FBA fee increases for 2025 but then reduces payouts that will dramatically affect the bottom line of its third-party Sellers. Different sides of the same coin. But predictable. And there’s no shortage of stories going further back.

All e-commerce retailers should diversify their fulfillment strategies and have FBA alternatives in place when Amazon exercises its whim and throws its “partners” under the bus again. It’s a matter of when, not if.

Learn more about Cahoot e-commerce order fulfillment services to protect your business from monopolies like Amazon.

Written By:

Indy Pereira

Turn Returns Into New Revenue

Convert returns into second-chance sales and new customers, right from your store.

In this article

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

What’s Fueling the Secondhand Surge?

1. Economic Pressures Make Resale Look Smart

2. Sustainability Has Become Personal

3. Uniqueness and Self-Expression

4. Digitization and Convenience

Not Just Clothes: Recommerce is Expanding

Brands Are Getting Involved, And Winning

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

Challenges Ahead: Will It Scale?

Retail Takeaways: What Leaders Need to Do Now

5 Brands Getting Resale Right

Resale vs. Retail – By the Numbers

Final Thought

Glossary: Recommerce Terms You Should Know

🔄 Recommerce

🛍️ Resale-as-a-Service (RaaS)

🔁 Circular Economy

👗 Bracketing

📦 Reverse Logistics

🤝 Peer-to-Peer (P2P) Returns

🧾 Buy-Back Program

💼 Trade-In Program

🔍 Authentication

📈 Net Recovery Rate

📊 Resale Value Consciousness

Frequently Asked Questions

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

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

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

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

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

Turn Returns Into New Revenue

Related Articles

In this article

The Psychology of the Tariff-Era Consumer

Buyer Personas in the 2025 Tariff Environment

1. The Budget-Conscious Parent

2. The Small Indulgence Shopper

3. The Prepper-Inspired Planner

4. The Homebody Investor

Product Categories Resilient to Tariff Impacts

1. Made-in-USA Goods

2. Luxury and High-End Items

3. Essential Goods

4. Sustainable and Eco-Friendly Products

5. Digital Goods and Services

Products Likely to Experience Price Hikes

Strategies for Ecommerce Sellers to Adapt and Sustain Their Businesses

1. Diversify Sourcing and Manufacturing

2. Optimize Inventory Management

3. Implement Strategic Pricing Adjustments

4. Enhance Supply Chain Resilience

5. Leverage Technology and Automation

6. Explore Alternative Product Offerings

7. Monitor and Advocate for Policy Developments

Frequently Asked Questions

How are the 2025 tariffs impacting ecommerce consumer behavior?

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

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

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

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

Turn Returns Into New Revenue

Related Articles

In this article

Rethinking the Game: Why Domestic Sourcing Makes Sense in 2025

Step-by-Step: How to Start Sourcing Domestically

Can You Stay Profitable While Sourcing Locally? Absolutely.

The Pros and Cons of Reshoring

Where to Find Domestic Suppliers: Your 2025 Resource Guide

Real-World Examples of Domestic Sourcing in Action

1. American Giant

2. GRACE Eleyae

3. Parachute Home

4. Bombas

Final Thoughts: Reshoring as a Competitive Edge

Frequently Asked Questions (FAQs)

Is domestic sourcing really more profitable than importing from overseas?

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