The beauty industry is, historically, a total cash cow. In 2023, global market sales grew to $446 billion, up 10% from 2022, according to a 2024 McKinsey report, which also projected that, by 2028, that figure would reach $590 billion (roughly the GDP of Sweden). This seemingly limitless beauty opportunity owed in part to lightning-in-a-bottle factors like the increasing demand for skin-care and personal-care products, or the growing influence of the creator economy.

But in 2025, the beauty world is facing new challenges — namely, the Trump administration’s “liberation day” tariffs — which have slapped remarkable fees on key beauty hubs like South Korea, France and Italy and a staggering 145% tax on Chinese goods, which a majority of brands rely on for componentry and other crucial parts of their supply chains. The impact has been immediate (but also confusing, as tariff specifics seem to change daily); tariffs have threatened to push prices higher for consumers and squeeze profit margins for brands.

This is especially pertinent for those indie companies that remain reliant on overseas sourcing and manufacturing. Smaller brands — which may be working with less capital and smaller margins for disruption — are disproportionately affected and left scrambling for solutions that come with steep costs and complicated logistics. So, what do those solutions look like? We spoke to a range of experts, including “It” brand executives, private equity investors and supply chain specialists, about the three primary methods for small beauty brands to consider as they navigate the volatile global economy ahead.

Raising prices

This is the obvious one, and it’s also likely one most brands will avoid by any means necessary if they’re able. Price increases can be a kiss of death, eroding customer loyalty and potentially leading a brand to lose its competitive edge.

“Some price increases are likely unavoidable, as most indie beauty brands can’t absorb the added costs entirely on their own,” says Rich Gersten, co-founder and managing partner of venture capital and private equity firm True Beauty Ventures, whose portfolio reads like a who’s who of industry prodigies, including K18, Ami Colé and Crown Affair. “Still, given the current uncertainty and more cautious consumer spending, many brands are delaying pricing decisions and watching how negotiations evolve.”

For Gersten, price increases are a last-ditch effort. Instead, he says, he’s encouraging brands to focus on optimizing their supply chains and identifying cost-saving opportunities, like exploring new suppliers, diversifying sources, and shifting parts of production away from impacted countries like China.

Among True Beauty Ventures’ portfolio is Dieux, the TikTok-favorite skin-care label founded in 2020 by cosmetic chemist Joyce De Lemos, licensed esthetician Charlotte Palermino and creative entrepreneur Marta Freedman (who departed the company in 2024). Palermino, now chief brand officer, explains that localization continues to be a priority for the brand, trade war or not. (She also discusses the impact tariffs are having on the cost of beauty products regularly on her popular social channels.) Unfortunately, she says, the options to domesticate manufacturing remain limited.

“Policy and retaliation is changing so quickly, it’s making it challenging to plan ahead, especially as most of our production isn’t in China,” she says. “If my production was in China, based on the relationship we’re seeing with the U.S., I’d be exploring other options where there are replacements.”

Still, certain beauty sellers are in fact turning to price bumps, should it make sense for their business. E.l.f. recently announced plans to raise prices by $1. In April, Stockholm-based skin-care device company Foreo enacted its own tariff-induced price increases of up to 20-30%. 

“This is one of the most aggressive tariff hikes we’ve seen in years,” Mario Gomez, Foreo’s global commercial director, told The Hollywood Reporter last month. “At 130%, it fundamentally reshapes the cost of bringing our products into the U.S. Still, our first priority is our customer — which is why we’re capping our price adjustment well below the actual tariff burden.”

Diversifying suppliers

Nick Benson, a former beauty brand founder and CEO of product innovation and manufacturing platform Atelier, explains that the impact of these tariffs has the potential to be particularly severe because indie beauty brands typically lack the infrastructure and resources to pivot quickly. At Atelier, which aims to help beauty brands streamline their supply chain, tariffs have prompted three distinct response patterns.

First, there’s the aforementioned last resort — price-increase planning — which risks eroding their hard-won customer base. For indie brands, Benson says, even a 10% price increase can significantly impact their competitiveness and brand trust.

Second, is what Benson calls panic-driven reshoring, wherein brands are frantically trying to move production to the U.S. without fully understanding the complexity involved.

“One brand with about $500 million in revenue sent us 30 separate emails in a single week, each about a different product or component they believed they needed to relocate,” says Benson.

And third, which is where Benson says the most forward-thinking brands are focusing, is multi-shoring, which is when brands establish parallel supply chains and sourcing strategies. Companies like Atelier are facilitating this with data-driven, flexible manufacturing models, helping brands adapt swiftly.

“One example is two chains — one serving the U.S. market and another serving the rest of the world — and another is brands determining which components should be reshored and diversifying only those,” Benson explains. “This approach maintains margin integrity while avoiding the vulnerability of depending on a single geographic region.”

Focusing on high-margin items — amid the potential slowing of innovation

Speaking of margins, Gersten recommends that smaller companies shift focus to high-margin products, because in this environment, he says, “strong unit economics are more essential than ever.”

With companies now being forced to react defensively, having to divert valuable resources from R&D, some brand founders are sharing concerns that tariffs may slow down innovation — especially when access to cutting-edge ingredients and technologies is hindered. Dieux, Palermino says, is largely missing out on technology with packaging, textures and formulas that other nations will have access to.

“Tariffs risk narrowing access to specialized materials and technologies that elevate the category, whether it’s a breakthrough active ingredient or a uniquely engineered brush or applicator,” adds Elaine Choi, CEO of “It” girl hair-care label Crown Affair. “I do worry that, long-term, these barriers could make the U.S. beauty market feel more insular or slower to evolve, at a time when consumers are more curious and informed than ever.”

Though less than two months into Trump’s tariffs, most brands are recognizing that reshoring production fully is unlikely and are instead looking to innovate in other, more localized ways. — staying nimble, in other words. Choi mentions that brands like Crown Affair consider diversifying suppliers, deepening collaborations and making thoughtful decisions about where to invest in domestic capabilities, versus where international partnerships remain essential.

“Shifting production back to the U.S. sounds appealing, but in reality, the expertise, materials and manufacturing sophistication often still sit overseas,” she says. “The key is finding the right balance — honoring global innovation while building a resilient, adaptable brand.”

So, what’s the long-term outlook?

After all, the technology exists to further modernize even the most contemporary supply chains. Going forward, Benson believes that companies will prioritize adaptable, data-driven supply networks; customer-centric approaches like micro-manufacturing, involving smaller, localized production and distribution centers, will become essential.

The reality, he says, is that supply chain volatility is the new normal. Brands that invest in resilience now will maintain their competitive advantage through whatever comes next — whether that’s additional tariffs, natural disasters, or the next global crisis we haven’t yet imagined.

“My primary advice is to view this disruption as an opportunity to build a more resilient business, not just a short-term crisis to weather,” says Benson. “The brands that will thrive aren’t just reacting to today’s tariffs but preparing for tomorrow’s inevitable disruptions.”

Fashionista’s audience includes 1 million site visitors, 110,000 newsletter subscribers and 4.74 million social media followers. Want to know how to reach them? Learn more.

#Experts #Share #Tariff #Advice #Indie #Beauty #Brands