How to Build Pricing Strategies That Work Under Tariffs

Table of Contents

• Best Pricing Tactics Under Tariffs
• Short-Term vs. Long-Term Pricing Strategies

Key Takeaways

• Tariffs drive up costs and put pressure on pricing decisions.
• Smart pricing strategies balance passing on costs with protecting sales volumes.
• Segmenting your customers based on their willingness to pay is key.
• Reworking supply chains can help minimize tariff impacts over time.

Tariffs can feel like getting hit with a surprise bill you didn’t budget for. Suddenly, your raw materials cost more, your finished products are pricier, and you’re left wondering: do we eat the cost or pass it along?

That’s where smart pricing decisions come in. Hike prices too much, and you risk losing loyal customers. Absorb too much of the cost, and your margins take a hit. It’s a balancing act that requires a clear view of your supply chains, cost structures, and what your customer segments can handle.

Best Pricing Tactics Under Tariffs

1. Understand Your Cost Structures

First things first: know exactly how tariffs are impacting your costs. Without a clear picture, it’s impossible to make good pricing moves.

Pro tip: Build a simple breakdown showing how much each product's cost jumps due to tariffs. It’ll make it way easier to plan price adjustments.

2. Segment Customers Based on Willingness to Pay

Some customers are super price-sensitive; others? Not so much. Figuring out who’s who can help you decide where you can raise prices without causing a stampede for the exits.

Pro tip: Look at past behavior—who’s stuck with you through previous price bumps? Those are your less price-sensitive segments.

3. Adjust Prices Strategically

Rather than slapping the same increase on everything, be surgical. Look at the products that are must-haves or where your brand has serious clout. Consider where you can be flexible with tariffs and where you cannot.

Pro tip: If you need to raise prices, do it in steps. A series of smaller increases usually feels better to customers than one giant leap.

4. Absorb Part of the Tariff to Protect Market Share

Sometimes, holding the line on pricing—even if it hurts margins a bit—is the smarter long game. If your competitors are jacking up prices, keeping yours steady (or raising them less) can win you some serious loyalty.

Pro tip: Run the numbers carefully. Absorbing too much might feel good now, but if it drains profits long-term, it’s not sustainable.

5. Rethink Your Supply Chains

If tariffs are hammering your bottom line, it might be time to look beyond pricing alone. Where and how you source your goods matters more than ever.

Pro tip: See if you can diversify your suppliers or move sourcing closer to home to dodge some tariff pain altogether.

Short-Term vs. Long-Term Pricing Strategies

Short term? You’re doing quick math and fast moves—small price changes, promos, better customer messaging, and considering how digital payments can ease your burden.

Long term? You’re thinking bigger. You’re tweaking your supply chain, building up customer loyalty so they’ll stick even if prices go up, and maybe even redesigning products to be less tariff-dependent.

Winning under tariffs isn’t just about patching holes but building a stronger ship.

Tariffs are like surprise storms in business. You can’t stop them, but you can sail smarter. The companies that come out ahead will make thoughtful pricing decisions, understand the real impact of tariffs, and get creative with how they adjust prices and supply chains.

Stay sharp, stay flexible, and keep your customers at the center of every move you make—and you’ll navigate tariff-driven changes like a pro. Learn more about our software that allows you to easily control how you get paid with Paystand Smart Controls.