You Raised Prices for the Tariffs. The Tariffs Are Gone. What Do You Do Now?

The Tariff Whipsaw, in Two Acts

In early 2025, Washington dropped a bomb on DTC brands: sweeping tariffs under the International Emergency Economic Powers Act (IEEPA), with rates on Chinese goods reaching as high as 145%. For brands sourcing finished goods, components, or packaging from Asia, the math broke overnight.

The response was predictable. Brands scrambled. 71% raised prices. Some communicated it openly: "prices going up May 1 due to tariffs." Others quietly pushed SKU prices up by $10, $15, $25 and hoped no one noticed. A few ran "buy now before prices increase" campaigns and pulled forward demand. Most just absorbed the chaos and tried to survive.

Then, in February 2026, the Supreme Court struck down the IEEPA tariffs in a 6-3 ruling, finding the Act didn't authorize broad-based tariff authority. The crisis-level rates were gone.

Brands exhaled. Then came the question nobody had an answer for:

"What do we do with our prices now?"

This is that answer. And we're giving it to you with data from 170+ DTC brands, not theory.

Two Paths. Most Brands Don't Know Which One They're On.

Here's the situation most brands are sitting in right now, whether they've named it or not: Your prices are elevated. Your AOV is up. Your cost of goods is recovering (not fully back to pre-2025 levels, but materially better than the crisis peak). That means one of two things is true:

Which path are you on? Most brand founders don't actually know. They have a gut feeling. They check MER. They look at revenue. They don't look at the data that actually answers this question: cohort-level repeat purchase rate and LTV Lift across their price-change window.

We do. And what we're seeing across the Statlas platform is more nuanced, and more actionable, than the binary choice makes it sound.

What the Data Actually Shows

CTC's Statlas platform tracks revenue, contribution margin, AOV, and repeat purchase behavior across 170+ DTC brands in real time. We've been watching this tariff story play out since April 2025, and the pattern is clear. The brands that are winning right now share three characteristics:

1. Their price increases held customer retention. When brands raised prices and maintained (or improved) their product value, retention rates stayed stable. Returning customer revenue didn't collapse. LTV Lift (the percentage of a cohort's first-order revenue that comes back as repeat revenue in subsequent months) held its shape. These brands have a real windfall on their hands.

A premium home goods brand in our portfolio raised prices 25% during the tariff peak. Order volume dropped 21.5% year-over-year. But contribution margin expanded 54% in the same period, because the customers who stayed were higher-intent, higher-AOV buyers who kept coming back. The price increase functioned as an accidental quality filter.

2. Their new customer acquisition took the real hit, not retention. Across our data, the most common pattern isn't mass churn from existing customers. It's suppressed new customer acquisition. Elevated AOVs narrow the top of the funnel. Consideration-stage shoppers who might have converted at $75 don't convert at $95. This shows up as declining new customer revenue and rising aMER: your ad dollars are working harder but the door is narrower.

3. Brands that discounted through the tariff period trained customers to wait. Our BFCM 2025 data showed this in real time: discounts across the portfolio dropped from 14.15% to 13.95% year-over-year as brands tried to protect contribution margin with tariff-inflated COGs. New customers, shopping purely on deal, waited longer and converted later. For brands that leaned harder into discounting to prop up volume, the damage is more structural.

The Three Types of DTC Brands Right Now

Based on what we're seeing across the portfolio, DTC brands fall into three categories heading into the post-tariff period:

The Most Important Thing People Get Wrong About Rolling Back Prices

Rolling back prices is often the worst thing you can do right now, even if your tariff justification is gone. Why? Price anchoring.

When you raise prices, your customers recalibrate their reference point. A product that was $75 and went to $95 is now mentally priced at $95. Rolling back to $75 doesn't feel like a gift. It feels like an admission that the product was never worth $95, which means customers now question whether it was ever worth $75.

Worse: it signals instability. DTC founders think about pricing in terms of economics. Customers think about it in terms of trust. Inconsistent pricing erodes both.

The Tariff Situation Isn't Actually Over

Before you make any pricing decision, understand the current state of the ground:

Your COGs are recovering, but they are not back to pre-2025 levels. If you roll back prices to pre-tariff levels, you're doing it into a cost structure that no longer supports those margins.

What to Do Right Now

Here's how we're advising brands to work through this, using the same analytical approach that drives our Prophit Engine methodology:

1. 1

   Run your LTV Lift report for Q1 2026 cohorts.

   Compare the repeat purchase rate of customers acquired before your price increase vs. after. If post-price-increase cohorts are retaining at the same or better rate, your pricing held. If retention dropped materially, you have a real signal that the price increase was too aggressive for your value proposition. This is the foundational question. Everything else is downstream of it.

2. 2

   Separate new customer conversion from retention.

   Pull your aMER (acquisition-only MER) trend from Q4 2025 through today. If your overall MER looks stable but aMER is climbing, you have a new customer acquisition problem, not a retention problem. These require different responses.

3. 3

   Audit your acquisition SKU price points.

   Which products do first-time buyers purchase most often? What is the average first-order AOV for new customers pre- and post-price-increase? If your first-purchase AOV is now above market comparables for your category, you're pricing out the top of the funnel. That's where selective adjustment makes sense, not sitewide rollbacks.

4. 4

   Check your competitors.

   The tariff ruling affected everyone equally. If category-wide prices stay elevated, you have room to hold. If competitors are rolling back, you face a different strategic environment. This is intelligence, not a directive. You don't always follow competitors, but you need to know the competitive price position.

5. 5

   Calculate your new contribution margin floor.

   With your current pricing and recovering COGs, what is your contribution margin per order? What is your month-one contribution per new customer? What is your lifetime contribution target? These three numbers define whether you can actually afford to lower prices, and by how much, without giving back the financial health you've rebuilt.

Tariffs Revealed Something That Was Already True

Here's what we believe the tariff period actually did, beyond the obvious cost disruption. It sorted brands into two categories that have always existed but were harder to see in calmer markets:

Brands with real pricing power. These are brands whose customers buy because of the product, the brand, or the experience, not because the price is the best available. These brands raised prices, kept customers, and are now structurally more profitable. The tariff chaos was involuntary pricing strategy, and for them, it worked.

Brands with fragile pricing. These are brands that were winning primarily on price competitiveness, either against direct competitors or against the consumer's sense of "fair." When their prices went up, the value equation broke. These brands are now facing the harder question: is the product differentiated enough to support the price, or has the tariff period revealed a gap between what they charge and what customers believe they're getting?

The answer isn't to roll back prices. The answer is to earn the price. Invest in product improvements that close the value gap. Build retention mechanics (post-purchase flows, loyalty programs, subscription tiers) that increase perceived and actual value over time. Develop creative that connects price to product superiority, not to promotional urgency.

What We're Watching in the Next 90 Days

• 01 LTV Lift trajectory by pricing cohort. We're comparing cohorts acquired before, during, and after price changes to see where retention is recovering and where it's degrading. This will tell us whether the post-tariff period is a retention recovery story or a slow-burn churn problem.
• 02 aMER vs. overall MER divergence. If overall MER holds but aMER degrades, the market is telling us that price increases have made acquisition harder without damaging loyalty. That's the signal to invest in new customer acquisition messaging rather than rolling prices back.
• 03 New customer AOV vs. returning customer AOV split. If brands see a widening gap (returning customers holding their elevated AOVs while new customer AOV is soft), it's a clear funnel problem, not a loyalty problem. The fix is acquisition-specific, not sitewide.

We'll publish updated benchmarks as the data develops.

71% of DTC Brands Raised Prices. Not All of Them Should Lower Them Back.

The tariff whipsaw is one of the stranger macroeconomic gifts the DTC industry has ever received, not because tariffs were good, but because the forced price increases sorted brands by the strength of their value proposition, at scale, in real time.

The brands that raised prices and kept customers are sitting on expanded contribution margins, stronger unit economics, and a cleaner customer base. The worst thing they can do is give that back reflexively.

The brands that raised prices and damaged their acquisition funnel need surgical intervention: not sitewide rollbacks, but smart repositioning of the acquisition price point paired with retention mechanics that justify elevated prices over time.

The brands that discounted through the crisis and trained customers to wait have a harder rebuild ahead. Price cuts won't fix what discount conditioning broke.

The common thread? Every one of these decisions needs to be made from cohort-level data, not gut feel and not MER alone. That's what Statlas is for. And that's the analysis we're running every day across our portfolio.

Want Data-Driven Pricing Strategy for Your Brand?

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