Kelly Martinez, Co-Founder and President of ePost Global, explains why smaller apparel brands are absorbing the biggest financial hit from rising tariffs and supply chain costs in a recent Fibre2Fashion article analyzing the gap between how large and small retailers handle margin pressure.
The cost squeeze hitting small brands
Rising costs tied to tariffs, raw materials, and transportation are flowing through supply chains faster than expected. While larger brands absorbed initial shocks and held margins steady, many are now beginning to pass costs on to customers. Smaller brands face a different reality entirely.
The challenge is structural. Smaller brands operate on tight margins without the financial strength of larger companies. They also lack diversified sourcing options and multiple shipping locations that give bigger players flexibility to absorb cost increases.
Why size matters in shipping
Kelly points out the competitive disadvantage: "The bigger shippers are definitely more equipped to have multiple sites and multiple shipping locations. It is more difficult for mid-size shipper or the TikTok brands and those kinds of products that surge in a quick period of time, and they kind of die off. I think those ones find it hard to move to somewhere else or to have another option."
Where input costs are rising fastest
Input costs are spiking across the entire value chain—not just fabrics, but also yarns and small components like buttons are seeing 20-30% price increases. For smaller brands, these increases compound quickly. With limited bandwidth to experiment with new materials or manage extended timelines, smaller brands face difficult choices: pivot to alternative materials, scale down production, or absorb losses that threaten viability.
What larger retailers are doing differently
The Relex "State of Supply Chain 2026" survey found that during Trump's tariff period, 59% of retailers raised consumer prices to offset increased costs. Only about 26% absorbed costs internally, protecting market relationships despite margin pressure. But for smaller brands constrained by thin margins and limited sourcing flexibility, that option disappears fast.
Read the full Fibre2Fashion analysis on tariff impacts to small brands →
