2025 is sure to be a year like none other for Amazon and e-commerce sellers. Coming off the high of the five-day period that includes Thanksgiving, Black Friday, and Cyber Monday, U.S. e-commerce sales hit major milestones setting new records daily. For the more than 60% of third party sellers with products listed on Amazon, small and medium-sized businesses were the clear winners during the Cyber 5 week.
So, with the onset of a new year, an evolving political landscape, and a slow down to the rate cuts in 2024, there’s much speculation about the direction of the U.S. economy.
But what does this all mean for e-commerce businesses? Tariffs, tax cuts, inflation, and supply chain have potential to impact both top and bottom line revenue for many online sellers. While it may be tough to predict exactly how things will play out, we can look at market signals and historical trends to anticipate what’s to come.
E-commerce Challenges to Watch for in 2025
Keep an Eye on Tariffs
Tariffs are taxes on products that come from other countries. Historically when the U.S. has increased tariffs on imported goods, these costs can trickle down from suppliers to sellers and ultimately to consumers. Tariffs have the potential to put pressure on not only profit margins though also top line revenue due to increased prices.
With the potential for higher tariffs under President Trump’s second term, many businesses are rethinking their sourcing and production strategies. Some companies are shifting production outside of China and/or passing costs onto consumers through higher prices. Other merchants are sticking with their current plans, as they are confident in their sourcing mix—especially the companies who previously adjusted their sourcing strategy when the U.S. last increased tariffs.
Supply Chain Disruptions
We’ve all felt the pain of supply chain disruptions over the last few years, and unfortunately, they’re not going away anytime soon. Whether it’s the ongoing effects of the pandemic, geopolitical issues, production challenges stemming from erratic weather, or just unpredictable shipping delays, it’s something you need to plan for.
A 2024 McKinsey survey suggests that vulnerabilities in the supply chain will remain the norm, not the exception, with nine in ten respondents saying they have encountered supply chain challenges in 2024.
Inflation Can Affect Your Bottom Line
Inflation is another factor you’ll need to keep an eye on, although some experts predict the increase will be lower than 2024. As prices for everything from raw materials to shipping costs increase, running an e-commerce business could become more expensive.
How to Tackle 2025’s Challenges: 4 Actionable Tips for E-commerce Sellers
Now that you have a better sense of the possible challenges ahead, let’s talk about how to tackle them head-on. Here are some steps you can take to make sure your business remains competitive in a shifting economy:
- Diversify Your Suppliers or Consider a “Supplier +1”
Tariffs and supply chain issues are unpredictable, but you can make things easier by diversifying your suppliers. According to Deloitte, many industrial manufacturers are adopting a dual-sourcing strategy, often referred to as ‘supplier +1,’ to lessen their dependence on a single supplier or country. This involves adding another supplier, either from the same region or a different one, to fulfill part of their supply needs.
- Optimize Your Inventory Management
You don’t want to get caught without enough stock or end up holding onto unsold products. Tools like inventory management software can help you predict demand more accurately, avoid stockouts, and even save money on storage costs. By tracking sales trends and inventory levels in real-time, these tools give you better visibility into your stock and help you make more informed decisions about reordering.
- Cut Costs Where You Can
Look for ways to streamline your operations and reduce unnecessary expenses. This might include renegotiating supplier contracts to secure better terms or switching to more cost-effective tools and technologies. Implementing AI-driven automation, for example, can help you reduce manual tasks, improve efficiency, and lower labor costs. By continuously reviewing your processes and embracing technology, you can lower overhead while maintaining high service standards.
- Communicate Openly with Customers
When prices change, it’s important to let your customers know the reasons behind it. By communicating early and offering plenty of notice, you can explain the factors driving the increase. Customers appreciate honesty, and when they understand why the change is happening, they are more likely to accept it and remain loyal to your brand.
Looking Ahead: 2025 and Beyond
By staying informed, being proactive, and being willing to adapt, you can continue to thrive in an unpredictable economy. Economic shifts like tariffs, inflation, and supply chain challenges are inevitable, but with the right strategies, you can keep your e-commerce business strong and ready for anything 2025 throws your way.
The good news? You don’t have to face these changes alone. SellersFi can help cover things like inventory, marketing, logistics costs, and any other business need. Don’t settle for a lender, choose a partner in growth.
