Michelle Aran Explains Effects of Trump Tariff on E-Commerce

Though the United States and China have recently come to terms on an initial Phase One trade agreement that should relax economic tensions between these superpowers (at least a little bit), there’s no arguing that the tariffs that have been put in place by the current US administration against China have really clamped down on consumer confidence and e-commerce across the board.

In early 2018, Pres. Trump implemented tariffs upwards of 25% on more than $50 billion worth of Chinese goods. A significant amount of those tariffs were aimed at products used by the manufacturing industry, but an extra 10% tariff was placed on top of more than $200 billion worth of consumer goods coming out of China – including electronics – that has really handicapped e-commerce businesses more than anyone could have expected or anticipated.

By 2019 major retailers were scrambling around to find new sources for the goods and products they sold throughout their department stores, with so much economic pressure being put on US and Chinese based businesses that in January 2019 the US postponed planned raises to the tariffs that would have made things even more challenging.

Unfortunately, that initial pause on increased tariffs was short-lived. In May 2019 more tariffs were added to consumer goods, bumping them up from 10% to 25%. This in turn led the Chinese to raise tariffs on more than $110 billion worth of products coming out of the United States.

As Michelle Aran, CEO at Velvet Caviar – one of the most prominent and successful e-commerce operations in the cell phone and mobile device accessory industry – can attest these tariffs have made conducting business a little bit more challenging, but not impossible.

In fact, Velvet Caviar continues aren’t just succeeding but are thriving in the face of these tariffs thanks to creative business approaches that allow them to outflank the competition, capitalize on new opportunities, and push forward with their vision of what the ultimate mobile device accessory company should offer today’s modern customer.

Keeping Costs Low

By streamlining their product catalog and choosing only to work with the highest quality and reputable manufacturers of mobile device accessories, manufacturing partners that create Velvet Caviar accessories to the exacting specifications of this company, Velvet Caviar is able to keep costs low even with tariffs adding extra expenses that wouldn’t have been there otherwise.

Yes, the cost of securing Velvet Caviar cases directly from the manufacturer overseas has definitely grown in the last two years. But because of their commitment to working with manufacturers that they know, trust, and have worked with in the past they’ve been able to mitigate a lot of these extra tariffs to keep costs reasonable.

Smart Marketing and Premium Positioning

On top of working with the right suppliers, Velvet Caviar, led by Michelle Aran, has also taken a unique approach in the mobile device accessory world by positioning this company has a premium company rather than fighting the rest of the industry in a race to the lowest prices possible.

This positioning allows Velvet Caviar to not only offer higher quality products that consumers are more excited about, but it also allows them to build and higher profit margins. These higher profit margins allow them to navigate this tariff situation more successfully than companies that are operating on razor thin margins, companies that are going under because they are in the race to the bottom we highlighted above.

Combine that with smart, savvy, and strategic marketing that really helps to promote the Velvet Caviar brand as a premium accessory option – and the strategic partnerships Velvet Caviar has made with leading designers and artists in New York City to come up with the styles for their cases – this has proven to be a recipe for success in e-commerce today.

Michelle Aran (like every other e-commerce CEO out there) would love the tariffs from both the US and China to disappear as soon as possible, bringing costs and prices back down across the board, but thanks to the leadership in the strategic thinking displayed by this CEO Velvet Caviar continues to be positioned to succeed throughout 2020 and beyond no matter what.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes.