The call came in from China around 3 a.m. on April 14. With 145% tariffs about to take effect, Landzie Founder and CEO Andrew Laplante recalled how his biggest supplier gave him an ultimatum: He had five minutes to decide if he’d like to cancel Landzie’s latest order or ship it out as planned.
For a small New Jersey-based lawn care equipment company, it was a tricky decision, but Laplante ultimately decided it was more important to stay stocked up than potentially lose out on cost. “We said, ‘No, please ship it,’” he said.
In the weeks since making that decision, during which time a 90-day pause on tariffs went into effect, Landzie’s response to the trade conflict has evolved from a simple yes or no decision in the middle of the night to a series of considered strategic pivots, which have prioritized keeping product flowing over cutting imports.
“Our margins have shrunk, to be honest, and it’s not ideal, but also not selling any products hurts us in many other ways,” he said. “So it’s a balancing act.”
What does that balancing act look like on the ground? For Landzie, it’s a mix of adaptation and compromise spanning sourcing to product development.
No negotiations: Unlike many multinationals with a diverse portfolio of suppliers, Landzie historically relied on one manufacturer, China Eagle Power, for 85% of its product. And when Laplante tried to see if the company’s trade partner could take on some of the higher costs, the answer was an unambiguous no.
But eating the cost was more palatable than losing sales momentum, Laplante explained, especially given its reliance on the algorithms of Amazon and Google.
“Being out of stock can be really detrimental to our organic rank,” he said.
Out-of-stocks can also drag down the return on ad spend or ROA, he added, because you’re not getting as much bang for your marketing dollar, and just cutting ad spending proportionally also risks lowering the brand’s organic rank on these platforms.
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Buying ahead: With all these variables to consider, Landzie is using the 90-day pause to its fullest. Its latest order was roughly two and half times larger than the previous one.
This tracks with a broader trend of buyers currently stocking up rather than pulling back, according to Rah Mahtani, US head of commercial strategy at Alibaba.com, which Landzie uses for much of its global purchasing.
“I sit down and talk to business owners every day. The broad consensus is this is a really unique window of opportunity to stock up on various products for their businesses,” Mahtani said.
He added that the purchasing reflects both short- and long-term strategies, with a number of buyers stocking up for upcoming sales seasons such as back to school and even the holidays in Q4.
Tariff line-ups: One of the more interesting trends Mahtani has noticed in response to tariffs is companies actually changing their product lineup.
“We’re seeing a strong willingness on both sides to take advantage of shorter windows of opportunity to produce products pretty quickly and bring them to market,” he said, citing Landzie as a company that was using the tariff situation as an opportunity to alter its product lineup.
Laplante said his company is now analyzing the tariff rates for different products to determine its purchasing plans going forward.
For example, Landzie has already decided to move away from low-price, higher-volume items such as can coolers because of the tariff environment, due to their margins potentially shrinking with higher tariffs.
The company also decided not to launch another smaller, low-cost item called the Landzie Hook Weeder, because its already narrow margin could have been completely erased by tariffs. It remains worthwhile to keep those higher-priced items in stock.
“Going out of stock on high-performing SKUs would have been far more damaging to our business,” he said. “In contrast, lower-priced items presented a significant risk of financial loss at scale.”