How a $4.50 Tote Bag Turned Into a $12 Problem (and How We Fixed It)

Hey there,

This week’s Unboxed Weekly is all about showing—not telling.

In our latest workshop, I ran a live simulation of what a 145% tariff actually does to your costs. No fluff, no panic—just straight math, real examples, and what to do about it.

We used a product that’s simple, familiar, and probably close to something in your catalog:

👜 Workshop Simulation Product Profile

• Product: Minimalist Canvas Tote Bag
  

• Category: Accessories / Fashion
  

• Sourced From: Guangzhou, China
  

• HTS Code: 4202.92.1000 (handbags made of textile material)
  

• FOB Price: $4.50
  

• Tariff (Before): 17.6%
  

• Tariff (After): 104% 😬

Note: This calculation is based on the tariff rates in effect at the time of writing. Tariff policies can shift quickly, so the actual rates may vary slightly.

📉 The Damage

Let’s break down the before and after:

🧾 Before Tariff Hike (17.6%)

• Tariff: $0.79
  

• Freight (LCL): $0.90
  

• Packaging: $0.50
  

• Warehousing & 3PL: $0.80
  

• Landed Cost Total: $7.79

Solid margins at this level if you're selling for $19.50.

🔥 After Tariff Hike (104%)

• Tariff: $4.68
  

• Freight, packaging, 3PL remain the same
  

• Landed Cost Total: $11.68

That’s a 50% increase in your cost per unit.
And unless you’re ready to charge $28+ for a tote bag… that margin is gone.

👩‍🔬 What We Did: 4 Cost-Saving Projects

Instead of scrapping the product or pulling orders, we ran 4 “mini projects” to strategically pull that landed cost back down:

✅ 1. Supplier Negotiation (FOB -20%)

New FOB: $3.60
Tariff dropped too (since it’s based on FOB), down to $3.74.
💰 Savings: $1.84/unit

✅ 2. Switch from LCL to FCL

Freight dropped from $0.90 → $0.22
📦 We simulated a 20ft container with 0.5kg units, and the math checked out.
💰 Savings: $0.68/unit

✅ 3. Lower Packaging & 3PL Cost

Packaging: $0.50 → $0.35
3PL: $0.80 → $0.60
We did this by simplifying the unboxing and stacking cartons better.
💰 Savings: $0.30/unit

✅ 4. Combined Everything

When all 3 projects were applied together...
New Landed Cost: $8.81/unit

🧠 The Bigger Lesson

We didn’t do anything crazy for this exercise.

We haven't flown to another country yet.
We didn’t fire our supplier.
We didn’t rebrand the product.

We just:

• Talked to our factory
  

• Consolidated freight
  

• Cleaned up packaging
  

• And ran some math

Small wins stack up.
Especially when they come from different parts of your supply chain.

💬 What You Can Do Today

1. Know your real landed cost (not just FOB)
   

2. Run the simulation: What if tariff = 145%? What’s the damage?
   

3. Stack your savings: 3–5 small moves could save $3/unit
   

4. Stop reacting. Start modeling.

If you missed the workshop, just reply and I’ll send the replay + editable templates (I shared some below and you can find the rest on the link I’ll send you) that you can use to improve your supply chain strategies.

You’ll get:

• Negotiation Playbook
  

• Co-Loading and Documentation Guide
  

• And more…

No panic. Just math, margin, and next steps.
Lara

P.S. If you want help simulating this with your product, hit reply. We’ll hop on a call and do it live.