When Tariffs Hit Low-Margin Businesses, Sales Disappear

For a family-owned business in Anaheim, California, tariffs aren’t a line item that can be absorbed or offset — they’re an immediate threat to survival.

Operating in a highly competitive market with extremely low margins, this small company prices its products directly based on what it costs to produce them. There’s no cushion. No room to absorb sudden increases.

They explained it plainly:

“As a small company, we are unable to absorb the tariffs. We face extremely low margins. Our pricing is directly based on the cost incurred to produce the product and we are in a very competitive market. As a result, all tariffs imposed are passed directly onto the customer — and because of that, we have seen a dramatic decrease in sales.”

This is the reality many small businesses are facing. When tariffs rise, companies with thin margins have only two options: absorb the cost and operate at a loss or raise prices and lose customers. For this Anaheim business, raising prices wasn’t theoretical — it led directly to declining sales. For family-owned companies competing on price, there is no adjustment without consequences — fewer orders, shrinking revenue, and growing uncertainty about the future.

Their story is one of hundreds within the 800-plus member We Pay the Tariffs coalition, amplifying how tariffs are reshaping small businesses across the country — from manufacturers and importers to retailers serving everyday consumers.

📢 If your small business has been affected by tariffs, we invite you to join WPTT. Add your voice to our open letter and stand with other small businesses navigating the same pressures.