Marketplace Briefing: Online merchants aren’t lowering prices despite Supreme Court ruling
This is the latest installment of the Marketplace Briefing, a weekly Modern Retail+ column about the ever-changing e-commerce marketplace landscape. More from the series →
Fine jewelry brand Haus of Excellence raised prices across its catalog last year — by as much as 15-60% — after President Donald Trump imposed steep tariffs on imports from India, where the company sources most of its goods.
Duties on Indian imports climbed to 50%, before a trade deal earlier this month lowered them to 18%. And, on Friday, the Supreme Court ruled that Trump’s tariffs issued under the International Emergency Economic Powers Act of 1977 were unconstitutional.
But Monil Kothari, founder and CEO of Haus of Excellence, isn’t preparing to cut prices. “We’re still increasing pricing based on the most up-to-date tariff announcements from India and the U.S., because it’s not going back down to zero,” he said. “It’s still elevated.”
Within hours of the ruling, Trump announced across-the-board tariffs of 10%, under Section 122 of the Trade Act of 1974. The next day, he said he would work to increase these to 15%. The new tariffs expire after 150 days, unless extended by Congress. While the Supreme Court decision was welcome news, it doesn’t erase those sunk costs or the tariff swings that have upended his cost structure.
Compounding the issue, gold prices — a key input for the brand — have surged, driven in part by tariff uncertainty. “The cost of our goods has also shot up, because gold has almost doubled since last year,” Kothari said.
Given the pace of policy changes, Kothari said he’s reluctant to make any abrupt moves. “I’m going to adopt a wait-and-watch approach,” he said. For now, that means keeping prices where they are.
Kothari’s situation reflects the broader challenge facing thousands of small and midsize online merchants that sell on marketplaces like Amazon, social shopping platforms such as TikTok Shop and their own Shopify-powered websites. Many sellers who raised prices last year to offset tariff costs must now decide whether — or when — to roll them back.
Kothari isn’t alone.
Chuck Gregorich, whose company Net Health Shops imports patio heaters and fire pits, said he raised prices by up to 10% on certain items last year. He doesn’t plan to cut prices in the near term. Over the past year, he overhauled his supply chain to reduce reliance on China, where he once sourced about 75% of his products. Today, most of his manufacturing is in India and Vietnam. But like Kothari, he was hit with steep tariffs on Indian imports.
If tariffs ultimately settle at 10% or 15% under the Trump administration’s new executive order, “that probably won’t drive a price decrease, because I’m still eating the tariffs,” Gregorich said. “I didn’t pass everything on.”
To date, Gregorich said he has paid about $1.1 million in tariffs that are potentially eligible for a refund. If refunds materialize, that could change his calculus. “If I get the $1.1 million refund, then you have to look at it and say, ‘Well, alright, I can take this now and start adjusting my pricing,'” he said. For now, though, “we just have to sit around and wait.”
Amazon CEO Andy Jassy told CNBC in January that Trump’s tariffs have begun to “creep” into the price of some items. “So you start to see some of the tariffs creep into some of the prices, some of the items, and you see some sellers are deciding that they’re passing on those higher costs to consumers in the form of higher prices, some are deciding that they’ll absorb it to drive demand, and some are doing something in between,” he said.
Amazon sellers previously told Modern Retail they were raising prices on some items to mitigate the impact of tariffs. Sellers have also curtailed discounts and promotions to help absorb tariff costs. Gregorich normally discounts his seasonal bestsellers — including $189 artificial Christmas trees, $159 fire pits and $135 nutcrackers — by 20% for Black Friday and Cyber Monday. This holiday season, however, he said he offered “little to no discounts” because he couldn’t afford to. He also skipped discounting his bestsellers during Amazon’s July Prime Day.
This year, with more stable inventory and slightly lower tariff rates, he said he may be able to offer promotions again. “We could be doing some discounting,” he said. Still, that will depend on where tariffs ultimately settle and whether clarity on refunds materializes. If duties spike again, aggressive promotions would be hard to justify, he said.
Judah Bergman, the founder and CEO of Jool Baby, said he raised prices by up to 10% last year, depending on the item, and has paid six figures in tariffs to date. Jool Baby makes most of its products in China and sells on Amazon, its own site and through retailers. While Bergman is optimistic that refunds could come, he’s not rushing to adjust prices.
“We don’t want to change our prices too quickly,” Bergman said. If tariffs fall to 10% or lower with more certainty, “we would definitely,” he said. But for now, he’s waiting for more clarity.
For its part, Canopy, a home wellness brand that sells humidifiers and air purifiers through its own website, Amazon, and retailers like Target and Sephora, the company didn’t raise prices on existing products last year, even as tariffs mounted. Instead, Canopy made smaller tweaks, including raising the free shipping threshold and slightly increasing shipping charges, changes that amounted to less than a 5% increase. Those shipping changes “are staying as is,” Canopy’s co-founder Justin Seidenfeld told Modern Retail in an interview.
Canopy has paid “seven-figure amounts” in tariffs over the past nine months, Seidenfeld said. While the Supreme Court ruling offers some relief, the company is holding off “until we know that there is going to be any credible right to claim a refund,” he said.
Gregorich is taking a similar approach. He said he plans to wait for further guidance before filing any lawsuit to recover tariff payments.
The Supreme Court decision could open the door to as much as $175 billion in refund claims, according to estimates. But the Supreme Court ruling did not address whether applicable tariffs will be refunded or how such a process would work.
Many brands are now focused less on immediate price changes and more on preparing for possible refunds and additional policy shifts, according to logistics firm Flexport. Following the Supreme Court ruling, Flexport executives say importers are scrambling to gather the data they would need to claim refunds.
“Everybody says, ‘It’s great to get that validation, but what is going to be the process to secure a refund?’” said Ted Boeglin, vp of North America at Flexport. “Our advice to everyone, and what we see our customers doing, is preparing for that. That means making sure you understand the critical deadlines to file your protests, working with a partner who can properly adhere to any system that is decided for receiving refunds and, crucially, getting access to your ACE data,” he added, referring to the U.S.’s centralized digital system for processing imports and exports.
The company on Thursday introduced a customs audit and refund preparation tool designed to help importers analyze past entries and calculate potential refund exposure. The company previously released a tariff refund calculator in January.
When it comes to pricing and promotions for the rest of 2026, Ashley Hetrick, sourcing and supply chain principal at BDO’s retail practice, said brands are likely to rely more on digital and social discounts they can quickly adjust, rather than rolling back list prices in case tariffs shift again. Many retailers, she said, are building multiple promotional calendars (for example, whether Section 122 duties are extended or repealed) and keeping flexibility in how they price items online so they can respond quickly if duties change.
“We will see more moves around promotional activity than changes to standard pricing,” she said. “There’s simply too much uncertainty right now for retailers to roll back some of those price increases.”
What I’m reading
- California asked a state judge to block Amazon from allegedly pressuring merchants not to offer lower prices on other sites, per Reuters.
- Shopify is letting its merchants advertise on ChatGPT through its Shop Campaigns ad network, The Information reported.
- David Luan, the head of Amazon’s artificial general intelligence lab, is leaving, according to CNBC.