Play to Win: Amazon Sellers vs 145% China Tariffs - Episode 5

[Paul]

If you're an Amazon seller importing from China, I'm going to be blunt, but the fact is you're not

in a rough patch. Today's reality is you're in a straitjacket and the clock's ticking. These crucial

next 90 days, they could make or break your business and maybe for good. Your landed costs didn't

rise, they exploded. There's no escaping where we are. The new 145% tariff isn't a tweak, it's a

full-on shock absorber. It tears up the playbook, a rule rewrite if you prefer.

[Jessica]

Maybe you've already felt it. Containers that used to land product at $12 per unit now come in north

of $25. Margins that once gave you a fighting chance, gone.

[Jessica]

You're juggling freight volatility, ad performance decay, and Amazon's latest wave of creative fees

all while trying to predict if your cash will hold until the next payout.

[Paul]

And here's the real kicker, no one's coming to help. Not Amazon, not your freight forwarder, not

l running campaigns like it's: 2024

as lost.

[Paul]

This is one of those rare moments when everyone is underwater at once. So don't expect mercy, expect

movement, and that movement has to come from you.

[Jessica]

This episode isn't about seven-figure scaling or clean growth charts. It's a survival manual. We're

going to help you see your real cost, brutal, yes, but survivable. Cut the fluff, kill what's

quietly bankrupting you, protect the SKUs that matter, and stay standing long enough to own what's

left when the dust clears. Because you don't need to grow this quarter, you just need to get through

it.

[Jessica]

And remember, getting through it doesn't mean sitting still or hoping for a policy U-turn. It means

facing your numbers and acting before they act on you.

[Paul]

We've split this episode into four parts. Uh, think of them as stages of triage. Part one, the

Dumpster Fire stage, what just changed and what's about to get worse. Part two, no One's Coming to

Save You, what to cut, cancel, and control.

[Paul]

Part three, Build Your Weekly War Room, how to track what matters and stay financially sane.

Finally, part four, Don't Die Before Q4, how to manage the chaos long enough to still matter when it

counts. And no, we're not sugarcoating anything. If you want polished optimism, you can find plenty

of that elsewhere. But if you want to make it to Q4 with your best SKUs still selling, let's go.

[Jessica]

Let's start with the single biggest reset, the new tariff math. Assume you used to pay 12% on

imported goods. If your factory charged $10 FOB and shipping was another dollar, your landed cost

came in at $12.20. Tight maybe, but functional. Now that same $10 product, still $1 in shipping, but

now add $14.50 in tariff. That's a landed cost right up at $25.50 per unit. And no, that's not

tight. That's underwater before you even open the box. This isn't about reduced margin anymore. It's

about running a loss before you even hit the SERP. What used to be your buffer, your cash cushion,

has turned into a sinkhole. And if you're relying on hope, brand equity, or wishful velocity to fill

the gap, it's not going to happen.

[Paul]

Here's the part nobody wants to say out loud: you can't fix this with small moves. You can't

optimize your way out of a 145% duty, and you can't hope Amazon will adjust to your new cost

structure. It won't. You have to adjust to its indifference.

[Jessica]

So here's what you do starting this week. Recalculate your landed costs across all SKUs. Don't

guess, get exact. Sort your catalog. Which SKUs are still viable under the new math and which are

dead weight? Prioritize SKUs with margin headroom and high sell-through. These are the ones that buy

you time. Forget your old bestseller list. You need a new one based on cash, not ego.

[Paul]

The good news, there's a silver lining here, but you need move fast. The fact is most of your

competitors won't. They'll wait. They'll freeze. They'll keep placing POs at the old volume or

advertising like the costs haven't doubled, or they'll hold back with zero POs until the smoke

clears. Either way, they'll go down quietly, which leaves room, real room for the ones who stay

sharp.

[Jessica]

What's on the other side of this storm isn't just survival, it's consolidation. Fewer players, less

noise, and room to breathe for those who make it.

[Jessica]

Let's talk about the other side of the fire: Amazon fees, ad delusions, and the real cost of staying

in the game.

[Paul]

Let's be honest, most sellers think they know where their profit goes. Tariffs are obvious. Freight

is visible. But Amazon's fees, that's death by a thousand silent charges. And right behind that,

your ad spend. Still running at pre-tariff levels, still targeting growth, still burning cash like

it's free.

[Paul]

These are the two biggest levers you can control and the two most often ignored. Let's break them

open.

[Jessica]

Quick quiz. When you think about your Amazon costs, what comes to mind? Referral fees? FBA? Ads? And

if that's it, you're probably missing a quarter, maybe more of what Amazon's billing you. Here's

what's likely buried in your statement: inbound placement fees, labeling fees, long-term storage

charges, low inventory surcharges, removals, aged inventory penalties, write-offs, damaged returns.

And a new one, low inventory level fee. Yep, you get charged extra for being lean. That's right. You

finally tighten up your inventory to save cash, and Amazon hits you for it because their algorithm

doesn't care about tariffs. It only cares that your IPI is dropping. That might sound complicated,

especially if you're used to spreadsheets.

[Jessica]

But it doesn't have to be, and you're not on your own.

[Paul]

This is exactly why we've built a quick, cost-effective tool that plugs into your Amazon settlement

data. It's in beta.We've been testing it internally with sellers just like you, people who don't

have time to build dashboards or chase down 19 fee headings every month. If you want early access or

just want to see what it can do, reach out through survivethetariffs.com. No fluff, just clarity.

[Jessica]

If this feels overwhelming, it's because it is. You're not alone.

[Jessica]

Amazon's billing system wasn't built to help you see the whole picture. It was built to keep you

compliant, not profitable.

[Paul]

You might not be thinking in terms of collapse yet, but here's the truth. If you don't shift fast,

the numbers will start thinking for you.

[Paul]

This is how businesses go under, not through one bad month, but through five weeks of drift, five

weeks of not looking closely enough.

[Jessica]

That's why even experienced sellers miss it and why so many are quietly drifting into negative cash

flow without seeing the red flags.

[Paul]

It's not about mastering the fees overnight, it's about spotting the ones that are quietly burying

you. Start with the misclassified SKUs. Amazon might be charging you like an oversized item because

your box is half an inch over or because your factory didn't poly bag correctly, or because your

prep center missed a bar code. Each of those could cost you thousands without a single red flag in

Seller Central.

[Jessica]

Now, let's talk about ads, your single biggest controllable cost and probably your biggest liability

right now.

[Jessica]

You're still running ads the same way, aren't you?

[Jessica]

Same ACOS targets, same campaigns, same agency or software, but your cost structure has changed

completely. So why hasn't your ad strategy?

[Paul]

Because nobody adjusted. Not your agency, not your software, not your own mental model. Everyone's

still chasing ACOS like it's: 2024

trying to survive.

[Paul]

Let's say your average ACOS is 22%. Sounds fine, right? But dig into the details. 25% of your ad

budget is printing cash, 25% is incinerating it, and the middle 50%, that's just drifting. Your job

now? Kill the bottom 25% today. We aren't chasing optimization. Right now we need amputation. I've

been there. We outsourced ads to a top agency. They were hitting our ACOS targets, but revenue felt

stuck.

[Paul]

It was only when I finally pulled the data I saw what was happening.

[Paul]

On a lot of SKUs, the agency leaned hard on auto campaigns instead of manual. We had our best

sellers sitting in campaigns with two cent bids, low enough to stay way under the ACOS target. But

those bids were so low they throttled performance. Meanwhile, other campaigns had ACOS overshooting

wildly. The upshot, the good SKUs weren't scaling and the bad ones were draining our ad budget.

Unbelievable? Yes, but 100% true. And the rest, bleeding cash in campaigns we hadn't touched in

months. Why and how could I fix it at speed? The agency didn't use negative keywords to drive away

low probability customers, nor do they use negative product targeting, so no triage.

[Paul]

They relied on that 20% target and leading with, "Look, the numbers say it's working."

[Paul]

Meanwhile, we were bleeding out.

[Jessica]

The simple truth, the numbers lie if you're asking the wrong question.

[Jessica]

ACOS might look clean, but is it driving profit

[Jessica]

or just hiding poor targeting and low velocity? Here's what to do this week. Run a SKU level margin

report after ad spend. Kill every campaign where the product doesn't break even. Find your top three

profit contributing campaigns, not your top three by return on ad spend.

[Jessica]

Pressure your agency. What have they changed since the tariff hike? If their answer is nothing, fire

them.

[Paul]

Your ad budget isn't a growth tool right now, it's a survival weapon. You use it with intent or you

don't use it at all. In a quarter where every dollar counts, spending blindly isn't just risky, it

could be terminal.

[Jessica]

Up next, we're heading into the next hard phase where you make cuts that hurt, but might just keep

you alive.

[Jessica]

What to cancel, what to drip feed, and how to spot the SKUs quietly killing your future?

[Paul]

If you've made it this far, you're already ahead of most sellers. You face the new tariff math,

you've looked at your Amazon costs with both eyes open, and you've seen the truth about your ad

budget. Now comes the part no one wants to say out loud. You're going to have to make cuts, big

ones. And the fact is the sooner you do it, the better your odds of survival.

[Jessica]

This is the emotional part.

[Jessica]

You might have built great supplier relationships, invested in certain SKUs, held onto products out

of loyalty or habit,

[Jessica]

but the rules just changed. And staying loyal to your past decisions won't protect your future.

[Jessica]

Let's start with buying. You've got three choices. Cancel all POs, drip feed reorders, or keep

buying like nothing's changed. Let's be clear, number three isn't an option. That's suicide.

Canceling everything might sound bold, but it comes at a cost. You'll burn relationships, kill

velocity, and wreck your in-stock metrics. Amazon says it'll be sympathetic about tariff disruption,

but there's no formal policy, just vibes.

[Paul]

So here's where most operators will land. First smaller, smarter POs. Next, drip feed only your best

SKUs. Then protect what you know will sell.

[Paul]

And finally, delay everything else. If a product isn't margin positive with the new landed cost,

don't reorder it. Okay, put those four metrics together, you can't afford to be sentimental right

now.

[Jessica]

And there's a bigger risk no one talks about.

[Jessica]

If tariffs do drop later this year, say from 145% to 60%, and you've just paid top dollar for bulk

inventory,You're sitting on high-cost stock while your competitors are reordering cheap.

[Jessica]

That's a nightmare.

[Paul]

So hedge your bets, place smaller POs, stick to fast movers, and negotiate flexibility from your

factories. If they won't play ball, move on. We've had to do this ourselves. I've had tough calls

with factories where we reduced volume by 80%, not because we didn't believe in the product, but

because we couldn't afford to reorder at those margins. And you know what? The good suppliers

understood. They're under pressure too. Keep the relationship alive even if the orders are tiny and-

[Jessica]

Let's shift to advertising. If you've done the initial triage, now it's time to get sharper. This is

where profit protection starts, not just cost cutting.

[Jessica]

It's okay to feel overwhelmed right now. You're not the only one.

[Jessica]

Everyone's feeling it, even the experienced operators.

[Jessica]

What matters is that you act while you still have options. That's what survival looks like.

[Paul]

For ads, it's time to get focused on the three key moves. First, starve the weak. Pause the bottom

10 to 25% of campaigns immediately. Second, feed the proven.

[Paul]

Identify your top 10% by absolute profit, not ACOS. Third, refine the rest. Negative keywords,

tighter targeting, and hands-on reviews. But let's be real, none of this works if you can't see the

data properly. It's not enough to know your overall ACOS looks decent.

[Paul]

You need to cut the data every which way, by SKU, by campaign type, by match type, by keyword group,

even by product category. That's how you isolate what's saving you and what's quietly killing you.

But most sellers can't do that today. Your ad platform or agency is still showing ACOS like it's

business as usual while your cash is bleeding out through poorly performing SKUs. That's why we're

building tools for this right now inside Survive the Tariffs. Simple focused dashboards that show

SKU level profitability across campaigns, not just vanity metrics. You'll be able to see what's

working, what's wasting, and what to kill immediately. It's in final testing, and it'll be available

later this month. If you're tired of flying blind with your ad spend, this was built for you. You're

not optimizing, you're shaping spend like a scalpel. We found huge wins from negative keyword

audits. Once we blocked the junk terms and irrelevant ASIN matches, we were able to increase bids

and still pay less per conversion. Sounds backwards, but it worked. Why? Because we weren't wasting

spend on noise anymore.

[Jessica]

If your ads are fully outsourced or running on autopilot, now's the time to get hands on. You don't

need to become a PPC ninja overnight, but someone in your team, maybe you, needs to get dirty with

the data.

[Jessica]

This is your survival budget now. It's too important to delegate blindly.

[Paul]

Right. It's time to talk inventory. You probably think you know which products are profitable, but

unless you're tracking contribution margin per SKU after ads, fees, tariffs, and returns, you don't

know. We thought our bestseller was a cash cow, turned out it was costing us $3 per unit to sell.

Why? Oversize handling, ad bleed, and a brutal return rate. Here's how you triage. Rank SKUs by cash

contribution, not margin percentage. Kill any product that fails on two out of three, margin,

volume, or velocity. Turn dead weight into cash. Bundle it, discount it, or liquidate it. Inventory

is not an asset if it's not moving. That's when it's a cost, a dangerous one.

[Jessica]

And the hardest part? Most of these products aren't bad, they just don't work in this environment.

[Jessica]

That doesn't mean you failed, it means the rules changed and you adapted.

[Paul]

Let's be real, none of this feels good. Canceling products you built, pausing ads that used to

convert, calling factories to slash orders. It's hard, but it's necessary. And the sellers who don't

do it, who freeze, delay, or deny, they won't make it to quarter four.

[Jessica]

Coming up next, the weekly war room. We'll show you how to track what matters, spot trouble early,

and hold the line. This is how you stay in the game long enough to matter in quarter four.

[Paul]

If you've cut your spend, trimmed your catalog, and canceled what doesn't serve you, now comes the

hard part, staying sharp, staying solvent, and staying that way for weeks while everything around

you is still chaotic. Because this isn't about winning Q2, it's about being alive for Q4 when the

market thins out and opportunity opens up.

[Jessica]

Most sellers don't crash in one big moment, they drift.

[Jessica]

They ignore cashflow forecasts. They stop checking inventory contribution. They wake up saying,

"Maybe it'll get better," and go to bed hoping it will.

[Jessica]

And that's quiet panic, and it's deadly.

[Paul]

So here's your antidote. A weekly war room doesn't need to be fancy, but it does need to happen

every Monday morning no matter what. This is where you reset focus, catch drift, kill distractions.

Build it in Excel, or a Google Sheet, or a dashboard, whatever makes it stick. Here's what you

track. Total dollar sales from last week, units sold, top 20 SKUs contributing 80% of revenue, ad

spend, and current ACOS.

[Jessica]

Open POs, how much committed and when the next payment hits. Estimated landed costs on incoming

stock, duty amounts already paid.

[Paul]

Returns by SKU, forecasted cash shortfalls. Highlight all weeks where you're in the red. Add one

more row. List any SKUs that are no longer being reordered and estimate how much cash you can

extract by liquidating.

[Jessica]

This dashboard isn't for your accountant, it's for you. It tells you at a glance if something's

slipping.And if you're heading toward a week you can't afford, you'll know before it happens. Now

link that dashboard to a rolling cashflow forecast, 13 weeks out, updated every Sunday. Why Sunday?

Uh, so Monday's war room is ready. It doesn't have to be perfect, just real.

[Paul]

We run ours in seven-day blocks. Start with conservative revenue projections, build in worst-case

freight, worst-case ads, worst-case delays, and then stress test it. Can you still survive if

revenue drops 10%? What about 30%? What if a PO lands with extra duties or Amazon withholds a

payout? The numbers won't comfort you, but they will clarify you.

[Jessica]

Because clarity kills panic. You can't manage what you refuse to see.

[Jessica]

And most sellers drifting toward collapse are still guessing. They're hoping for a break, but they

haven't faced their floor.

[Jessica]

Write it down. What's your survival scenario? The minimum revenue you need to stay solvent. Which

products have to perform to fund that baseline? The cash buffer required per week, and what costs

can be frozen if needed? That's your floor. And with that, your job now is simple. Don't fall below

it.

[Paul]

And while you're doing all this, remember, you're still running a machine, even if that machine is

just you. That means daily inputs, prioritization, boundaries, momentum. This isn't the time for

passion projects or shiny object syndrome. It's not time to rethink your logo or plan a product line

expansion.

[Jessica]

You only have so much focus, so protect it. Block off your best hour of the day and use it to drive

cash. Not emails, not meetings, not busy work. Just actions that move money.

[Jessica]

Bring the three D rule up front. First, delete what's not mission critical. Second, delay anything

that isn't time sensitive. Third, do only what moves the needle this week. And review that list

every morning. This is your Q2Q3 operating system. Simple, sharp, survival first.

[Paul]

Let's finish with the mindset shift. Ho- hope is fine, optimism has its place, but neither of those

are a strategy.

[Paul]

What is a strategy? Clarity, discipline, movement, seeing your numbers, acting early, holding cash

even when it's tempting to chase growth.

[Jessica]

You don't need to win this quarter. You don't need to post screenshots or show up on a webinar. You

just need to still be here when July hits, still stocked, still sane, still solvent. Because when Q4

comes and competitors have vanished and shipping slows again, you'll have the board to yourself.

[Paul]

There's no trophy for surviving Q2, but you don't need one. You need cash. You need control. You

need clarity. And if you've made it through this episode, you've got the map. You don't need to fix

everything. You just need to stop the worst leaks, double down on what works and stay in the game.

[Paul]

And if this helped you get focused on what truly matters, follow Survive the Tariffs in your

favorite podcast app. We'll post new episodes every week to help you stay sharp, stay solvent, and

stay standing