The threat of new or expanded tariffs has Amazon sellers facing mounting pressure to protect their margins. With cross-border manufacturing, shipping, and importing costs fluctuating, the uncertainty around tariffs can ripple across an entire product portfolio. In today’s hyper competitive ecommerce landscape, brands can’t just sell more—they need to protect their bottom line in real-time and tariffs can make that awfully challenging.
Our retail media team is ready to help your brand take proactive steps and stay ahead of the curve in this environment. Here's our playbook for deepening customer loyalty, strategically optimizing pricing, and monitoring profitability data effectively to pivot with speed and precision.
1. BUILD CUSTOMER LIFETIME VALUE: LEAN ON SUBSCRIBE & SAVE AND STRATEGIC CROSS-SELLING
When margins are under pressure, the value of a loyal customer skyrockets. One of the best ways to stabilize revenue and offset increasing costs is by maximizing Customer Lifetime Value (CLV)—and two of the most effective levers on Amazon are Subscribe & Save and strategic cross-selling through ads.
Subscribe & Save: More Than a Convenience
The Subscribe & Save (SnS) program remains one of Amazon’s most powerful tools for building predictable, recurring revenue. But in the face of rising costs and tariff threats, how you structure your SnS discount matters more than ever.
Rather than defaulting to the full 15% discount, we recommend strategically leaning into a 10% discount tier—a sweet spot that balances customer appeal with margin protection.
Why is 10% the Smart Middle Ground?
Offering a 10% SnS discount can lead to up to 1.8x higher conversion rates compared the 5% tier—without the steep margin hit of the 15% tier. This makes 10% a highly effective lever for increasing recurring revenue while maintaining profitability.
- Better-than-average lift: The 10% tier still significantly improves conversion and subscriber retention, especially for replenishable products like supplements, skincare, or household essentials.
- Margin-conscious strategy: Compared to the 15% tier, brands retain more per unit, which becomes essential when tariffs begin to compress product-level margins.
Execution Tips for Maximizing 10% Discount Effectiveness
- Test in high-velocity ASINs first: Start with products that already have strong sales velocity and are part of a regular replenishment cycle to maximize SnS adoption.
- Promote the benefit: Use A+ Content, Storefronts, and Sponsored Brand creatives to highlight the value of "Set it and forget it" savings with 10% off.
- Monitor SnS conversion data: Keep an eye on SnS adoption rate, LTV uplift, and cancellation rate. These KPIs will help validate if 10% is the optimal threshold for your brand.
By aligning your SnS strategy around the 10% discount tier, your brand is positioned to build lasting customer relationships without over-discounting—striking the right balance between conversion lift and profitability.
Strategic Cross-Selling Through Advertising
As CAC (customer acquisition cost) rises across platforms, maximizing the value of every new customer becomes critical. Amazon Ads can be a powerful tool here—not just to drive first-time purchases, but to unlock deeper revenue through smart cross-sell campaigns.
- Complementary product ads: Run Sponsored Ads or DSP display ads that target your brand’s own ASINs to highlight complementary products. For example, a user buying a facial cleanser could be shown a toner or moisturizer.
- Retarget high-value customers: Use Sponsored Display or Amazon DSP to retarget buyers of hero SKUs with ads for higher-margin or newer products in your portfolio.
- Create product pathways: Establish natural “next product” journeys and use advertising to guide shoppers down that path. This works particularly well within beauty, wellness, and personal care, where there are natural product portfolios that encourage a consumer to stay within the same brand.
Investing in these strategies will not only insulate your brand from margin pressure but will deepen consumer relationships, carrying your business through uncertain economic shifts.
2. BE PROACTIVE WITH COST INCREASES ON HIGH-VOLUME, LOW-MARGIN SKUS
It may seem counterintuitive in a value-conscious marketplace, but proactively increasing prices on certain products—especially those that are popular but operate on razor-thin margins—can actually help your brand.
Identify Most Vulnerable Products
Start by segmenting your brand portfolio into high-volume, low-margin SKUs and analyzing their elasticity. These are often the products most vulnerable to cost shifts from tariffs or shipping hikes.
- Low-margin workhorses: Products that drive a lot of sales but contribute little profit per unit may be at risk if their cost of goods increases even slightly.
- Frequent reorders: Products that are part of a replenishment cycle (like supplements or household essentials) offer more leeway for modest price increases if paired with value messaging.
Strategies for Implementing Increases
- Incremental pricing: Small, staggered price increases are often less noticeable to consumers and reduce the risk of sticker shock.
- Justify with value: Pair pricing changes with enhancements like updated packaging, added product features, or bundling to increase perceived value.
- Keep up with the competition: Execute a pricing analysis of top competitors. If their pricing is comparable to yours, you’ll know that your brand is in a healthy range of prices for consumers.
- Leverage pricing psychology: Ending prices in .95 or .97 can soften the appearance of an increase, and anchoring new prices next to higher strikethroughs can make them feel like a deal.
Why Proactive is Better Than Reactive
Waiting until tariffs are announced or implemented means racing to make pricing changes under pressure—which can lead to costly missteps or customer backlash. A proactive approach ensures you stay in control of your brand narrative and margin management.
3. MONITOR PROFITABILITY MONTHLY AND ACT ON REAL-TIME INSIGHTS
A single tariff or fee increase can erode margins overnight if you're not monitoring your brand profitability consistently. It’s not enough to track top-line revenue—brands need to understand the full cost on a per-ASIN basis and be ready to act fast.
Use Stella Rising’s Profitability Dashboard
We offer a monthly dashboard to review portfolio-wide and SKU-level profitability. Here’s what we include and consider:
- Cost of goods (COGS) including landed costs and any changes due to tariffs
- Amazon fees, including FBA fees, storage, referral fees, and SnS discounts
- Advertising cost of sale (ACoS) and total advertising cost of sale (TACoS)
- Promotions and deals impact
- Returns and refunds rate
- Shipping and handling surcharges
Profitability to Guide Strategy
Monitoring is only half the battle—adjusting quickly based on data is where you gain the edge. On a monthly basis, we recommend how to:
- Pause or reallocate ad spend on unprofitable SKUs
- Shift budget toward high-margin winners with scalable upside
- Negotiate vendor costs or adjust pack sizes to improve unit economics
In a tariff-driven environment, agility is your biggest asset. The brands that win will be the ones who can identify emerging issues, isolate impacted ASINs, and execute on cost-saving or revenue-enhancing strategies within weeks—not months.
FUTURE-PROOFING YOUR AMAZON BUSINESS STARTS NOW
Tariffs are potential profit disruptors that can impact your business overnight. Waiting until new fees are announced is too late; the time to prepare is now. By strategically building long-term customer value, implementing thoughtful product-level pricing, and establishing consistent profitability monitoring, your Amazon brand won't just weather these cost disruptions—it will emerge stronger than competitors who failed to plan ahead.
Reach out to us at Stella Rising to protect brand profits and retain brand strength, no matter what global trade challenges come next.
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