Which Industries Are Thriving and Struggling Post-Tariffs? Our Box Volume Data Tells Part Of the Story
Post-Tariff Impact Report: How Packaging Trends Reveal Economic Shifts in 2025
Key Highlights:
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Customer Behavior: More customers are becoming more reactive vs proactive by ordering less weeks-of-supply for boxes (leading to delayed orders for them), ordering less upgrades (drives less Repeat sales and higher Ad costs) and having to pay for priority production fees (all of which are new hidden costs on their business)
- Winners: Food, beverage, agriculture, medical supplies, and DIY/hobby industries are increasing custom box demand due to strong DTC and subscription trends
- Losers: Apparel, home goods, electronics, cosmetics, and promo gifting are cutting back on packaging as consumer spending softens and imports become costlier
- Regional Shifts: States like KY, IL, TX, FL, and AZ are seeing box order growth, while CA, NY, and WA are seeing slower packaging activity
- Tariff Impact: Small businesses (97% of importers but only 30% of import volume) are absorbing costs without scale advantages, making them more vulnerable
- Packaging Strategy: SMBs are optimizing packaging for cost (kraft, mono-materials) and marketing (QR codes), using it as both a cost-control and brand tool
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Strategies To help: custom packaging offsets to supply chain costs increase — a 0.4% sales lift covers the switch to branded boxes and helps pay for more than that
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Recommendation: the goal is the right one, but SMBs under $50M should be excluded from any tariffs as they don't have the resources to shift until long-term policies are finalized and large companies start re-shoring first
Introduction and Post-Tariff Context
At CustomBoxes.io, we strongly support the resurgence of domestic manufacturing. Our business thrives when American companies source locally, reduce lead times, and build more resilient regional supply chains. However, for small businesses, the path to buying and selling within the U.S. isn't always straightforward.
The current trade policy landscape is marked by volatility, complexity, and unpredictability. Sudden shifts in enforcement, unclear guidelines, and inconsistent implementation create significant barriers, especially for small and mid-sized firms without legal teams or global compliance departments. What's needed isn't just stronger protectionism, but a system that is fair, transparent, and navigable for growing small and medium-sized businesses.
This report aims to shed light on how today's tariff structures are impacting entrepreneurs, not through theory, but through real-world data. By examining thousands of packaging transactions across sectors and states, we can identify how economic pressure points are showing up in one of the most revealing places: the custom shipping box with a logo.
A Shifting Trade Landscape in 2025
As we move through 2025, American businesses are adjusting to a renewed wave of trade friction. Tariffs on imported goods, especially those tied to core manufacturing and packaging materials, have increased sharply before partially retreating following recent global negotiations. Despite these adjustments, tariff levels remain elevated by historical standards, continuing to weigh heavily on pricing, planning, and production. Fortunately, the sky high tariffs from China have come down to more moderate levels, but as you can see in this data from Peterson Institute for International Economics (PIIE) shows the variation in rates that these small businesses are learning to work around.
Meanwhile, trading partners have responded with their own retaliatory measures, creating new challenges in sectors ranging from electronics and consumer goods to agricultural inputs. The result is a patchwork of overlapping restrictions, penalties, and workarounds that make long-term decision-making difficult, particularly for smaller firms with lean supply chains.
CustomBoxes.io, which works with thousands of small businesses across the country, provides a unique window into these dynamics. By analyzing custom packaging order behavior and comparing it with regional and sectoral insights from sources like the Dallas Federal Reserve, we can see how economic uncertainty is shaping everything from procurement strategies to product launch cycles.
This report combines real-time platform data, industry segmentation, and on-the-ground behavioral trends to show how small businesses are adapting in a post-tariff economy; sometimes struggling, but often innovating in ways that policymakers and investors can learn from.
• Small businesses account for just 30% of total import volume
• Yet they represent 97% of all importing companies
• Tariff policy affects nearly every importing business, despite most lacking negotiating power, legal teams, or logistics scale
Where SMBs Import From Matters As Well
While tariffs have dramatically shifted the dynamics of global trade, our latest analysis of small business import data from the US Chamber reveals a clearer picture of where supply chains are realigning—and which countries continue to drive packaging demand. Of the $868 billion in small business imports, nearly 82% originates from just 25 countries, underscoring the concentration of sourcing relationships.
China remains the top source, accounting for over $157 billion in small business imports and more than 116,000 active importers. Despite years of trade tensions and tariff escalations, the volume of goods and relationships with Chinese suppliers remain resilient, especially in categories like consumer electronics, home goods, and private-label products where Chinese manufacturing retains a price and speed advantage.
Mexico and Canada are now the #2 and #3 sources by value, with $97B and $85.5B respectively, making North America an increasingly important regional trade zone. For SMBs, nearshoring not only helps reduce tariff exposure, but also accelerates fulfillment times and cuts down on oversized packaging, which we've seen reflected in the shift to smaller, more frequent box orders.
Countries like Vietnam, India, and Italy have also surged, combining moderate import values with high importer counts. These markets are especially attractive for SMBs seeking alternatives to China in apparel, textiles, packaging, and specialty manufacturing. Notably, Italy and Germany stand out with over 20,000 SMB importers each, a sign that premium materials, design, and niche industrial equipment continue to fuel demand, even as overall trade tensions rise.
For businesses navigating post-tariff supply strategies, the takeaway is clear: country of origin now plays a strategic role not just in cost, but in box sizing, fulfillment frequency, and environmental impact. By analyzing where your imports come from and how those partners affect your packaging needs, you can turn trade complexity into a supply chain advantage.
Industry-Level Impacts and NAICS Trends
Struggling Industries and Packaging Retraction
Our initial look at this data focuses on the April-May-June time frame, and we plan to update this data quarterly. Just as important as identifying growth sectors is understanding where packaging spend is falling. These declines often reflect broader pain points such as demand contraction, tighter margins, or sourcing disruptions.
1. Apparel Manufacturing (NAICS 315): Shifting to generic packaging
2. Furniture & Home Goods (NAICS 337): Below platform average
3. Consumer Electronics (NAICS 334): Increasingly cautious
4. Personal Care & Cosmetics (NAICS 3256): Below-average momentum
5. Gifting & Promotional Products (NAICS 5418): Trending downward
1. Apparel Manufacturing (NAICS 315) Once a booming category, apparel brands are now showing a directional decrease in custom packaging activity. This trend may stem from tariff pressures on textiles and the cautious spending habits of younger, price-sensitive consumers.
2. Furniture & Home Goods (NAICS 337) Packaging demand in this segment has moved below the platform average. Key challenges include dependency on imported components, elevated LTL freight costs, and overall declines in discretionary household spending. As a result, many brands are scaling back premium packaging formats.
3. Consumer Electronics (NAICS 334) Small and mid-size OEMs in this space are increasingly cautious. Packaging orders from these firms are declining as delays in part shipments and longer product development cycles take hold. These businesses are opting for bulk, standardized corrugated mailers instead of highly customized designs.
4. Personal Care & Cosmetics (NAICS 3256) Once one of the most dynamic packaging categories, this sector is showing below-average momentum. Challenges include influencer marketing fatigue, rising costs of specialty components like pumps and glass, and a general pullback from luxury materials. Brands are increasingly turning to recyclable, unprinted packaging to maintain margins.
5. Gifting & Promotional Products (NAICS 5418) This category is trending downward. Factors such as corporate cost-cutting, fewer in-office events, and a move away from elaborate onboarding kits are contributing. Packaging investments are shifting from premium aesthetics to more basic, functional needs.
How Struggling Industries Are Adapting
Industries experiencing demand declines, especially in discretionary goods or high-CAPEX sectors, are cutting packaging complexity to reduce overhead. Their approaches include:
- Ordering black ink on Kraft boxes (similar to Amazon) instead of color ink on white boxes
- Smaller, more frequent order sizes to manage cash flow and inventory risk
- Opting for 32 ECT boxes that are lighter than 200# heavy duty to reduce shipping costs
- Avoiding multi-material designs to streamline production and reduce cost per unit
These companies aren't eliminating branding, but they are shifting toward cost-effective packaging that still tells a story. QR codes enable this by transforming a basic kraft box into an interactive brand platform, without the need for multi-color prints or expensive inserts.
Which Industries Are Thriving Post-Tariffs?
According to the CNBC data, there's not a one-size fits all impact by industry for tariffs, and we can also confirm how this is actually impacting SMBs with our own data as well. Using Q2 2025 order activity from CustomBoxes.io, segmented by NAICS categories, we can now identify which industries have not only weathered tariff shocks but are actively expanding. Here are the segments with the most pronounced packaging growth:
1. Food Manufacturing (NAICS 311)
2. Beverage Manufacturing (NAICS 3121)
3. Crop Production (NAICS 111)
4. Medical & Health Product Packaging (NAICS 3391)
5. Hobby, Art & Creative Supplies (NAICS 3399)
1. Food Manufacturing (NAICS 311)
Custom packaging demand from food producers has jumped well above average. This includes:
- Specialty snack brands
- Gluten-free and allergen-sensitive food packaging
- Frozen meal prep startups
These companies are investing in insulated mailers, brand-forward cartons, and sustainable box inserts, especially as grocery eCommerce maintains its momentum.
2. Beverage Manufacturing (NAICS 3121)
Artisan sodas, direct-ship coffee roasters, and micro-distilleries are experiencing increased traction. Growth in this category is tracking higher than trend. Many of these brands leverage unboxing experiences with:
- Custom bottle carriers
- Subscription-ready branded boxes
- Recyclable corrugated shippers
The surge may be due to both consumer loyalty and a pivot toward online fulfillment.
"If your business is selling coffee beans from Thailand, Columbia, Brazil or anywhere else you literally can't get those products in the United States, and should therefore be excluded from any policy."
3. Crop Production (NAICS 111)
Farmers and seed supply businesses have experienced one of the more noticeable rises in average packaging order size. Many are now shipping directly to consumers via CSA boxes, starter kits, or direct-to-consumer educational products like mushroom grow kits.
4. Medical & Health Product Packaging (NAICS 3391)
CustomBoxes.io has seen a marked increase in packaging volume from small-scale medical kit suppliers, testing providers, and wellness subscription boxes. These orders are often shipped in:
- Rigid mailers with product foam cutouts
- White-label tamper-resistant cartons
These clients increasingly use QR-enabled packaging to support reordering and remote instructions.
5. Hobby, Art & Creative Supplies (NAICS 3399)
Surprisingly resilient, this segment—ranging from small paint kits to DIY projects—has shown consistent growth. This may be due to:
- Ongoing consumer interest in at-home hobbies
- Rising demand for custom kits for events, camps, and content creators
Packaging Volume Growth by Industry (Q2 2025)
Avg
Avg
Avg
Key Highlights
- • CustomBoxes.io's packaging volume analysis shows major growth in Food, Beverage, Crop Production, and Medical
- • State-level data indicates strongest growth in KY, IL, AZ; significant declines in CA, NY, and TN
- • Small businesses absorbing costs, reshaping sourcing patterns, and shifting branding budgets into packaging
- • Policy instability—more than tariffs themselves—primary deterrent
- • Packaging has emerged as both a trust signal and conversion tool in 2025 SMB playbook
Executive Summary
The 2025 tariff environment has fundamentally shifted how small businesses approach packaging strategy. Essential sectors like food manufacturing, beverages, and medical products are experiencing significant growth, while discretionary categories face headwinds.
Small businesses are absorbing costs internally rather than passing them to consumers, leading to innovative approaches in sourcing and brand positioning. Packaging has evolved from a shipping necessity to a strategic marketing channel.
Regional patterns show Midwest and Southern states (Kentucky, Illinois, Arizona) outperforming traditional coastal hubs, suggesting a geographic rebalancing of economic activity.
The key insight: Policy uncertainty, more than tariff levels themselves, is the primary growth deterrent. Companies need predictable trade rules to plan effectively, regardless of the specific rates involved.
How Industry Trends Are Shaping Packaging Strategy By NAICS
Industries with strong or rising consumer relevance, like food, beverage, healthcare, and CPG, are reimagining packaging as more than just a container. It's now a digital touchpoint that supports:
- Brand education: With QR codes linking directly to product videos, sourcing transparency, or personalized how-to content
- Post-purchase engagement: Dynamic links can drive repeat visits, solicit reviews, or activate loyalty programs
- Loyalty loop reinforcement: Smart packaging keeps customers connected even after the unboxing, fostering brand affinity and retention
These industries aren't just printing pretty boxes; they're enabling two-way communication via QR codes that adapt in real time. That means businesses can update the destination URL after the box is produced, allowing for time-sensitive offers, seasonal messages, or rotating campaigns, all without reprinting packaging.
Strategic Divergence, Backed by NAICS Trends
The NAICS industry data underscores this divide:
- Essential goods and lifestyle-driven segments (e.g., personal care, health supplements, shelf-stable food) are investing in packaging as a marketing channel
- Non-essential, long-cycle categories (e.g., industrial tools, high-end fashion, or B2B tech hardware) are seeing pullbacks in packaging investment
In both cases, dynamic QR codes offer a flexible, affordable bridge—enabling storytelling, education, and post-purchase interaction without adding material costs. For fast-moving or uncertain sectors, it's a future-proof solution that adapts as your business—and customer—evolves.
Regional and State-Level Insights
Our order data for April - June of 2025 offers a clearer picture of where packaging demand is rising and falling. The following state-level insights are derived from direct CustomBoxes.io order activity, offering directional (not absolute) indicators of small business momentum by geography.
States with Below-Average Packaging Activity
These states recorded notable directional declines versus prior periods:
- California (CA): Significant contraction in packaging volume — likely due to tech sector layoffs and DTC retrenchment
- Tennessee (TN): Sharply lower directional movement — possibly from reduced furniture and home goods output
- Michigan (MI): Below average, reflecting challenges in automotive supply chains
- Missouri (MO): Mild drop below trend — potentially linked to gifting and artisan slowdown
- Washington (WA): Packaging activity slightly under trend — likely reflecting tech-related disruptions
- New York (NY): Also lower than average — potentially linked to macro softness in retail and startup packaging
These states, particularly California, Tennessee and New York, may be seeing demand softening in sectors like tech hardware, apparel, and discretionary eCommerce, all of which are vulnerable to price sensitivity and shipping volatility.
States with Above-Average Growth (Ranked by Directional Momentum)
These states saw the most significant positive deviation from their historical averages:
- Kentucky (KY): Highest directional increase — driven by light manufacturing and industrial restocking
- Illinois (IL): Among the top performers, likely reflecting strong Chicago-area DTC and B2B growth
- Arizona (AZ): High growth linked to solar-tech startups, warehousing, and fulfillment operations
- Colorado (CO): Markedly higher than average — supported by maker economies and specialty food sectors
- Pennsylvania (PA): Strong upward trend in rural and wellness-focused eCommerce packaging
- Louisiana (LA): Above average — particularly in beverage and small food manufacturing
- Florida (FL): Healthy directional rise — possibly tied to the state's business-friendly migration and growing CPG presence
- Texas (TX): Moderately above average — driven by diversified manufacturing and scale-up ventures
- New Jersey (NJ): Notable lift above its typical levels — supported by B2B services and retail kits
- Ohio (OH): Also tracked higher than average, mostly due to DTC packaging and regional distribution
What State-Level Growth Suggests About the Economy
Packaging orders are not a perfect GDP proxy, but they are a powerful early signal of market momentum. When businesses grow, they ship more. When they pause or contract, packaging is one of the first expenses to slow.
Our updated state dataset reveals a few macro themes:
• The Midwest and South are quietly powering ahead: High-growth states like KY, IL, OH, and PA show business investment is not confined to the coasts
• Legacy coastal hubs are slowing: California and New York may be facing higher costs, regulatory headwinds, or startup ecosystem saturation
• New business formation is active: Orders from new clients highest in states like AZ and CO
States with Above-Average Packaging Growth
1. Kentucky (KY): Light manufacturing and industrial restocking2. Illinois (IL): Strong Chicago-area DTC and B2B growth
3. Arizona (AZ): Solar-tech startups and fulfillment operations
4. Colorado (CO): Maker economies and specialty food sectors
5. Pennsylvania (PA): Rural and wellness-focused eCommerce
States with Below-Average Activity
• California (CA): Tech sector layoffs and DTC retrenchment• New York (NY): Macro softness in retail and startups
• Tennessee (TN): Reduced furniture and home goods output
When trade policy changes like tariffs hit, they don't land evenly across the map. We leveraged data from the US Chamber coupled with our own analysis to show which states have the highest penetration of importers as a penetration of all businesses. The states that feel the strongest headwinds are often those where small business import penetration is highest (darker the blue below the higher the penetration of import companies). Places like New York and California aren't just import hubs for big box retailers; they're home to dense networks of SMB importers who rely on overseas suppliers to fuel local jobs and niche eCommerce brands. In these states, importing is deeply woven into the fabric of the small business economy. That means even modest shifts in trade costs ripple quickly into packaging orders, product margins, and growth plans, especially for Shopify entrepreneurs and lean teams with limited pricing power. The states in the yellow areas in the chart below will feel the impacts the most.
Business Strategy Shifts in a Tariff Economy
How Businesses Are Absorbing Costs
According to early 2025 directional data from the Dallas Federal Reserve's survey of manufacturers and service providers, businesses are taking a wide range of approaches in response to heightened tariffs:
• 42% are raising retail prices
• 35% are absorbing costs internally
• 28% are switching to domestic suppliers
• 18% are pre-purchasing inventory
Among the CustomBoxes.io small business user base, we observe that absorbing costs internally is the most common strategy, though it's often paired with creative operational adjustments to avoid customer churn. Unlike large corporations, SMBs rarely have the brand power or pricing leverage to shift rising costs onto consumers without risking lost sales. Instead, they adopt a mix of lean practices and tactical innovation.
In many cases, packaging itself becomes a decision point: where once businesses defaulted to highly branded, laminated finishes, they are now choosing black ink on Kraft box designs that cut both print and environmental costs (smart choice since Amazon also uses black ink on Kraft). These decisions often result in:
- Reduced material waste
- Lower printer setup charges
- Simplified recycling and eco-messaging alignment
While these may seem like incremental shifts, the accumulated effect across order volumes is considerable, helping brands maintain margins and align with shifting consumer preferences.
Additionally, there is a growing trend of packaging postponement: many brands are delaying rebrands or new product launches until macroeconomic conditions appear more stable. This "wait-and-watch" mindset reflects broader caution across the SMB landscape.
The Sourcing Puzzle – Domestic Isn't Always Cheaper
With rising tariffs, global instability, and calls for more resilient supply chains, many business leaders are re-evaluating overseas production. The dominant narrative suggests that bringing manufacturing back to the U.S. will solve quality, ethical, and logistics concerns in one stroke. But for small and mid-sized businesses, especially those scaling quickly or operating on lean margins, onshoring often introduces a new set of hurdles.
While the intention is clear, greater control, faster lead times, and alignment with domestic values, the execution is rarely straightforward.
Challenges with Domestic Sourcing for Small Businesses
1. MOQ Misalignment: U.S. manufacturers require minimum orders in thousands, misaligned with small business needs2. Customization Constraints: Domestic facilities optimized for standardization, not flexibility
3. Manual Processes: U.S. vendors rely on manual workflows vs. streamlined digital systems overseas
4. Higher Unit Costs: Even with freight/tariff savings, domestic production remains significantly higher for small volumes
1. Domestic MOQs Misaligned with Business Needs
U.S. manufacturers often cater to enterprise-level clients, requiring minimum order quantities in the thousands. For emerging brands still validating products or adapting to market feedback, these volumes don't align with demand, cash flow, or inventory strategies.
2. Customization Constraints
Many domestic production facilities are optimized for standardization, not flexibility. This can lead to limited material options, restricted specifications, and fewer configuration choices—making it harder for brands to differentiate or iterate quickly.
3. Manual and Slow Quoting Processes
Unlike the streamlined digital quoting systems common among overseas suppliers, many U.S. vendors still rely on manual workflows and legacy communication channels. This slows down critical timelines, from prototyping to production planning, especially when rapid market response is required.
4. Higher Unit Costs for Short Runs
Even with savings on freight and tariffs, unit costs for lower-volume domestic production remain significantly higher. Labor, overhead, and setup costs make it difficult for smaller businesses to achieve cost efficiency without scale, something most are still building toward.
Business Strategy Shifts in a Tariff Economy
How Businesses Are Absorbing Costs
Challenges in Sourcing from Domestic Suppliers
AI Will Encourage More People to Start Their Own Businesses
AI is going to act like a spark plug for entrepreneurship. As tools become better at handling tasks that once required a full team—copywriting, design, customer support, fulfillment coordination—people will feel increasingly empowered to start something on their own. With AI agents now capable of running basic ops, marketing, and even product research, the barrier to entry drops significantly. Combined with growing job uncertainty, it’s likely more individuals should start "hedging" their 9-to-5 roles by launching side hustles or microbrands that may evolve into full-time ventures.
This shift could fuel a massive wave of new business formation—especially in eCommerce. We may see a new era where solopreneurs scale like mini-agencies, using AI to multiply themselves across functions. That means more stores, more packaging needs, and more demand for low-friction infrastructure (like what we offer at CustomBoxes.io).
AI Will Create Near-Term Headwinds for SMB Marketing
While AI lowers barriers to entry, it’s also going to squeeze visibility for small businesses in the short term. As AI-native platforms (like ChatGPT, Google SGE, and Perplexity) become the preferred search layer, traditional organic SEO will take a hit—especially for long-tail keywords where SMBs typically thrive. These models are trained on large brand data and typically surface authoritative sources, meaning the early benefit will skew toward big companies unless models are tuned for fairness. And unlike paid search, there's no clear “pay-to-play” model yet.
This creates a paradox: while AI enables more SMB creation, it also raises the cost to grow. As free Google traffic dries up and paid acquisition becomes even more competitive, small businesses will face rising CAC without the usual offset from SEO. It reinforces the need for owned channels—like email, packaging, and loyalty—and may force founders to invest more in brand and box early on, as those become their most dependable and defensible touchpoints in a fragmented AI-led ecosystem.
In 2025, rising digital ad costs across platforms like Meta, Google, and TikTok are pushing small businesses to rethink where—and how—they connect with customers. With limited retargeting options, increased privacy restrictions, and unpredictable algorithm changes, packaging has emerged as the one brand-safe channel businesses truly own.
At CustomBoxes.io, we've seen firsthand how smart brands are flipping the script, turning the humble shipping box into a powerful post-purchase engagement engine. The result? More loyalty, more shares, and more long-term value per order.
The Rise of "Box-as-Brand" Strategies
Savvy eCommerce brands are no longer treating packaging as an afterthought. Instead, they're layering in dynamic content and intentional design elements that drive real business outcomes:
- QR Codes That Evolve With Campaigns: a D2C farm/food company uses CustomBoxes.io's dynamic QR codes let businesses update repeat customer landing pages even after boxes are in the hands of customers, unlocking real-time promotions, product education, and UGC campaigns without reprinting anything
- Referral & Loyalty Activation On the Box: A hat focused customer prints referral incentives and loyalty offers directly on box panels makes every unboxing a growth moment, converting customers into advocates with zero additional ad spend
- Creator & Community Co-Branded Inserts: clothing brand we serve is integrating creator-driven content or cause-related messaging via QR cards, tying packaging to larger brand missions or influencer-led storytelling
- Gamified Brand Experiences: One pet brand we work with tucked trivia challenges inside every box, rewarding correct answers with monthly perks, driving repeat traffic and building habit-forming engagement
- Story-Driven Touchpoints That Spark Reviews: A skincare brand recently added a "Brand Origins" QR panel to the underside of its mailer, resulting in a noticeable uptick in thoughtful customer reviews and social media mentions
Packaging = Recession-Proof Brand Equity
As economic pressures shift the focus from top-of-funnel growth to retention and repeat revenue, packaging is proving itself as a high-ROI investment. Thoughtful design not only protects the product; it elevates perceived value, increases trust, and builds emotional connection. Here's what works in 2025:
- First-Touch Confidence Clean, custom boxes with simple logo design make even small brands feel premium on delivery, essential for winning that first impression
- Smart Layouts That Support Bundling Efficient internal layouts reduce damage, save on DIM weight, and let brands upsell with confidence
- Subtle Luxury Cues Adding certain tactile experience that surprises and delights customers, leading to lower return rates and more organic sharing
- Built-in Educational Slots Many brands are now designing boxes with spaces for instructional content, upsell prompts, or personalized thank-you notes
- Sustainability Signaling That Aligns With Values Eco-friendly logos, recycling instructions, and kraft-based packaging build credibility with modern, conscious consumers
Using our ROI calculator you can see why a lot of these brands are using custom packaging to offset tariffs and cost increases in other areas; we've found that companies that use custom shipping boxes need just a 0.4% increase in sales to offset the costs (most get a 5-15% increase in repeat sales). Thus, when brands shift their mindset from "shipping cost center" to brand-owned media, the results compound. Your box is the one message your customer is guaranteed to open, and with the right blend of design and dynamic QR integration, it can drive conversion long after the ad budget runs out.
"The box is my handshake—it needs to feel like a brand promise, not just a shipping container." - CPG Founder
BRANDING BUDGETS ARE integrating with THE BOX TO HELP COVER RISING COSTS
SMBs are getting squeezed elsewhere in addition to tariffs as well. In 2025, rising AI usage will increase digital ad costs across platforms like Meta, Google and TikTok are pushing small businesses to rethink how they connect with customers. With limited retargeting options, increased privacy restrictions, and unpredictable algorithm changes, packaging has emerged as one brand-safe channel businesses truly own.
The Rise of "Box-as-Brand" Strategies
QR Codes That Evolve With Campaigns
CustomBoxes.io's dynamic QR codes let businesses update landing pages after boxes are delivered—for real-time promotions, product education. Without reprinting
Creator & Community Co-Branded Inserts
Integrating creator-driven content or cause-related messaging via QR cards
First-Touch Confidence
Clean, custom boxes making even small brands feel premium on delivery—essential for intentional ad-spend
Gamified Brand Experiences
Designing boxes to serve as instructional content, upsell prompts, or personalized thank-you notes
Packaging = Recession-Proof Brand Equity
First-Touch Confidence
Clean, custom boxes making even small brands feel premium on delivery—core time
Sustainability Signaling That Aligns With Values
Eco-friendly logics, recycling instructions, and black ink and kraft-based
Macroeconomic Indicators and Market Sentiment
The Russell 2000 – A Small-Cap Barometer
Total Returns
2023, 2024 and YTD 2025
The Russell 2000, which tracks small-cap stocks and is a strong proxy for U.S. small and mid-sized business health, shows a clear trend: small businesses are underperforming relative to larger firms in 2025.
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In 2023, small-cap stocks delivered 18.9% growth, already trailing large-cap gains of 28.3%
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In 2024, the gap widened further: small caps grew just 11.5%, while large caps posted 25.0%
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So far in 2025, small caps are up only 7.1% YTD, lagging large caps (7.8%) and mid-caps (7.4%)—despite macro narratives of recovery
Q1 2025: 3.2% year-over-year sales increase
But this growth was driven by:
• Weaker U.S. dollar (temporary export margin improvement)
• Inventory front-loading before additional tariffs
Reality: Sales spike appears artificial and short-lived, not robust organic growth
This stagnation isn't just a financial story—it reflects real challenges on the ground, particularly:
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Tariff pressure without volume leverage: SMBs make up 97% of U.S. importers but lack scale advantages, leaving them to absorb rising costs directly
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Unpredictable policy swings: CustomBoxes.io data shows SMBs shortening planning cycles and splitting shipments, increasing costs and reducing margins
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Financing friction: As rates stay high and policy remains murky, smaller firms are delaying launches, cutting SKUs, and placing smaller packaging orders more frequently—signs of cautious, reactive behavior
In short: while large companies may be hedging or negotiating around trade headwinds, small businesses are feeling them directly—and the Russell 2000 is reflecting that strain.
These indicators are consistent with what CustomBoxes.io observes in its customer base: a tentative rebound followed by cautious retrenchment.
Inflation Rebounds and Policy Gridlock
After easing from its 2022 peak, inflation showed signs of renewed pressure in early 2025. Despite expectations that inflation would stabilize near target levels, more recent projections indicate a moderate upward drift. This shift is being driven by a combination of:
- Fresh tariffs on imports such as consumer electronics, textiles, and packaging plastics
- Port congestion and logistics slowdowns, which continue to ripple through supply chains
- Raw material disruptions in sectors like construction and agriculture, linked to retaliatory trade measures
Price indicators are flashing mixed signals. While the Fed's benchmark inflation measure had been expected to stay relatively flat, recent movements suggest it is edging upward. Similarly, headline consumer inflation has remained persistently elevated rather than declining, pointing to what economists describe as a "sticky inflation" environment.
This emerging pattern is placing the Federal Reserve in a bind:
- Lowering interest rates too aggressively could reignite inflation, especially in energy and goods categories
- Holding rates steady risks stifling investment, particularly among small- and medium-sized enterprises facing tighter credit conditions (perhaps the White House could negotiate with Fed to reduce rates if they excluded SMBs from tariffs...putting less upward pressure on prices)
From what CustomBoxes.io observes across our customer base, ongoing policy uncertainty and economic headwinds are forcing small businesses into reactive operating cycles, and the consequences extend far beyond growth strategy.
Rather than holding 8–12 weeks of shipping supply like they used to, many brands are now keeping just 2–4 weeks of boxes on hand. This leaner inventory posture may help with cash flow in the short term, but it often leads to stockouts, delayed fulfillment, and missed revenue opportunities, especially when sales spike or suppliers back up. The ripple effects are costly:
- Lost repeat customers when orders arrive late or incomplete due to box shortages
- Increased reliance on rush production or last-minute box orders to keep fulfillment moving
- Expedited shipping costs to hit delivery windows that wouldn't have been a problem with better supply planning
These added expenses, priority print fees, air freight surcharges, and overnight delivery upgrades, function as hidden taxes on small businesses. They're rarely budgeted, never scalable, and disproportionately impact brands that already operate with tight margins and limited resources.
At a time when larger competitors can afford to plan, stock, and buffer for delays, smaller operators are forced to absorb costs just to stay reliable.
Market analysts from multiple sources, including Mauldin Economics and Yardeni Research, have flagged a growing risk of what some term a "policy-induced recession." In this scenario, it's not just macroeconomic forces at play, but also regulatory hesitation and tariff unpredictability that dampen confidence.
In essence, the 2025 inflation rebound isn't just about rising prices. It's about a business climate clouded by indecision, where growth opportunities are put on hold not for lack of demand, but for lack of clarity.
The Trade Policy Whiplash Effect
Perhaps the most disruptive force in the current tariff environment isn't the size of the tariffs, but the instability and abrupt reversals that accompany them.
Since the start of 2025, small and mid-sized businesses have been forced to adapt to a wave of trade policy volatility, including:
- A broad escalation in tariffs across hundreds of import categories.
- Select and partial rollbacks following international negotiations, primarily targeting heavy industry and bulk inputs.
- Shifting procurement rules at the state level increasingly favor domestic-only sourcing.
Again, this inconsistency makes long-term planning nearly impossible. Many SMBs are shelving growth initiatives, delaying product launches, and shrinking forecasts, not because of immediate financial strain, but due to uncertainty about future inputs and regulations.
CustomBoxes.io's platform data reflects this sentiment. There's been a notable uptick in small-batch, high-frequency "test orders", designed to limit exposure in case of sudden pricing changes. Brands that once committed to 2–3 month packaging cycles are now ordering in short spurts, often paying more in rush production to avoid holding excess inventory in uncertain times.
Ultimately, the unpredictability of trade enforcement is acting as a drag on momentum. Even the most resilient brands are finding it hard to stay proactive when the rules keep changing without warning. As you can imagine, if these companies can't commit to a few more weeks of supply of boxes which they will most certainly need how can we expect them to make larger Capex and hiring expenditures.
Global Supply Chain Realignment
THE TRADE POLICY WHIPLASH EFFECT
Trade Policy Volatility in 2025
Instability deterring growth initiatives, causing caution among SMBs
Global Supply Chain Realignment
DIVERSIFICATION AWAY FROM CHINA TOWARD
CHALLENGES
Tariff disruptions are also accelerating shifts in global sourcing. Many small U.S. businesses are now diversifying away from China, not toward domestic manufacturing, but toward countries like:
- Vietnam: Emerging as a key producer of textiles and lightweight packaging
- India: Supplying paperboard and kraft at moderate quality and favorable cost
- Mexico: Gaining ground in print and assembly for NAFTA-adjacent clients
While these shifts offer modest relief, they also present challenges:
- Longer lead times from Southeast Asia
- Compliance concerns in non-Western production markets
- Customs delays due to misaligned documentation practices
Still, the net effect is a more distributed global sourcing strategy, even among businesses with limited procurement bandwidth. The old binary of "China vs. U.S." is being replaced by a more agile, multi-region model, though it comes at a managerial and financial cost.
Small Business Advocacy and Regulatory Response
In today's tariff-laden environment, small businesses are not just weathering economic crosswinds; they are stepping forward to demand a fairer playing field. As a proud graduate of the Goldman Sachs 10,000 Small Businesses (10KSB) initiative, CustomBoxes.io is part of a growing network urging smarter trade and tax policy that reflects the realities of operating a small business.
Pushing Through Headwinds with Resilience
Despite challenges, many small businesses remain optimistic and continue to plan for growth. However, this determination is often constrained by real-world obstacles. Access to funding has tightened considerably, with many business owners finding it harder to secure loans or lines of credit. This squeeze has caused them to scale back expansion efforts, delay hiring, and reevaluate long-term investments.
At the same time, tax complexities and uneven enforcement of trade policy are disproportionately affecting smaller firms. Many owners feel that existing regulations and fiscal structures tilt in favor of large corporations, leaving small enterprises at a disadvantage in both pricing and compliance.
Advocacy in Action, but Policy Lagging Behind
Rising import tariffs continue to strain small and mid-sized businesses that rely on global supply chains for critical inputs they can't source domestically. While industry groups have pushed for targeted relief, such as exemptions or credits for businesses without viable U.S.-based options, Congress has made little progress, and the White House has largely dismissed these proposals.
We would propose several policies that could help:
- More streamlined import rules to prevent costly classification errors
- Exemptions or financial relief for companies with modest annual revenues <$50M
- Short-term funding solutions tied to tariff-related cash flow issues
- Exclude SMBs under $50M from tariffs for next 18-24 months until dust settles
This lack of progress has left many small businesses on their own to navigate rising costs, shifting rules, and growing compliance burdens.
Small Business Advocacy and Regulatory Response
- • Despite challenges, many small businesses are pushing forward
- • Access to funding has tightened, limiting expansion plans
- • Tax and trade policies favoring big business impact harder on smaller firms
Tariff Impacts
Key Policy Proposals
Key Policy Proposals
Current Challenges
Insights from the 10KSB Network
Through its participation in and graduation from the Goldman Sachs 10KSB program, CustomBoxes.io has been able to participate in the surveys they send out to the 17,000+ companies that have graduated from their program. Through this survey data, GS10K has made the following observations: Small business owners currently feel (36%) or expect to feel (38%) negative impacts from tariffs. Of those who reported feeling or expecting to feel negative impacts from the tariffs most (77%) cite uncertainty as the cause.
CustomBoxes.io has the ability to prove what these surveys are saying: small businesses are becoming more cautious. They're breaking larger initiatives into incremental steps, postponing product launches, and placing smaller, faster-turnaround packaging orders to remain agile in an unpredictable policy climate helping prove out what businesses are saying in these surveys.
The majority of business owners surveyed across the 10KSB network feel underrepresented in national policymaking. They cite red tape, limited access to capital, and uneven support systems as key issues stifling growth. There's strong demand for reform, particularly in simplifying bureaucracy, making funding more accessible, and enforcing fairer procurement opportunities for smaller firms.
Strategic Takeaways and the Role of Packaging in 2025
What Businesses Can Learn from the Packaging Data
Strategic Takeaways and Role of Packaging in 2025
Psychological Touchpoint
Packaging is no longer just operational—it's a critical point of trust
Costs Absorbed by SMBs
Small businesses are bearing the brunt, driving adaptive creativity
Challenges of Sourcing Domestically
High MOQs and inflexibility deter domestic production for <$10M revenue firms
Regional Growth Shifts
States like KY, IL, and AZ are ascending as legacy economies retreat
Insights into Consumer Behavior
Packaging trends reflect changes in customer habits and preferences
Over the course of this analysis, one theme has become abundantly clear: packaging behavior is economic behavior. From our updated NAICS segmentation to granular state-level shipping trends, packaging orders serve as a real-time window into how American businesses are navigating volatility.
Key strategic takeaways include:
Strategic Takeaways: What Packaging Data Reveals
• Packaging is psychological: The box is a touchpoint of trust in a digitally mediated retail world• Cost absorption patterns: Small businesses absorb more costs than larger counterparts, forcing adaptive creativity
• Domestic sourcing challenges: High MOQs and inflexible options remain impractical for most businesses under $10M revenue
• Regional growth shifts: States like Kentucky, Illinois, and Arizona show explosive growth while coastal states retreat
• Customer behavior insights: Packaging reveals deeper shifts in consumer habits beyond branding preferences
Policy Recommendations from the Ground
POLICY RECOMMENDATIONS FROM THE GROUND
SMARTER TARIFF RELIEF FOR SMALLER FIRMS
- Tiered exemption system based on firm size
- Carve-outs and rebate frameworks
CONNECT SMBs TO LOCAL MANUFACTURING
- Publicly-supported matching platform
- Curated directories and certification hubs
REAL-TIME ECONOMIC VISIBILITY FOR POLICYMAKERS
- Leverage sectoral platform data
- Enable timely regulatory response
SMARTER ACCESS TO GROWTH CAPITAL
- Expand government-backed funding channels
- Pilot flexible repayment programs
Based on extensive conversations with small business customers and trends observed across the CustomBoxes.io platform, a handful of pragmatic policy levers emerge that could empower American small businesses to thrive amid trade volatility.
Policy Recommendations from the Ground
1. Smarter Tariff Relief for Smaller FirmsTiered exemption system for firms below enterprise revenue scales with upfront carveouts or simplified rebate frameworks
2. Connect SMBs to Local Manufacturing
Publicly-supported matching platform to bridge information gap between small brands and U.S.-based suppliers
3. Real-Time Economic Visibility for Policymakers
Partner with platforms like CustomBoxes.io for real-time indicators by sector and region
4. Smarter Access to Growth Capital
Expand government-backed funding, pilot flexible repayment programs, create hybrid capital models
1. Smarter Tariff Relief for Smaller Firms
Smaller businesses should not be burdened with the same compliance structures and cost thresholds as multinational corporations. A tiered exemption system could offer relief to firms operating well below enterprise revenue scales, especially when alternative sourcing isn't realistically available. Whether through upfront carveouts or simplified rebate frameworks, such models would help level the playing field without compromising trade enforcement. When large enterprises return it's almost certain the SMB will follow.
2. Connect SMBs to Local Manufacturing
One recurring theme we hear is that many businesses want to source locally, but don't know where to start. A publicly-supported matching platform, similar to existing tools that connect lenders and borrowers, could bridge the information gap between small brands and U.S.-based suppliers. Whether curated directories, trade association tools, or regional certification hubs, better visibility into local options would support reshoring without requiring individual businesses to do the research on their own.
3. Real-Time Economic Visibility for Policymakers
Many of the trade policy responses we've observed are based on outdated or backward-looking economic data. Partnering with platforms like CustomBoxes.io, which can offer real-time indicators of packaging activity by sector and region, would allow chambers of commerce and policymakers to spot slowdowns as they happen, not after the fact. Expanding such tools through public-private collaborations could enhance both regulatory precision and crisis responsiveness.
4. Smarter Access to Growth Capital
Access to capital remains one of the most cited barriers to small business expansion. Many firms lack the collateral, cash flow, or traditional credit profile to qualify for standard loans, especially in times of inflation or market instability. Several opportunities exist to close this gap:
- Expand government-backed funding channels to support high-potential local businesses
- Pilot delayed or staggered repayment programs that align with business ramp-up cycles
- Create hybrid capital models that mix asset-backing with performance-linked investment vehicles, ensuring both lender security and founder flexibility
The Case for Main Street Investment
Too often, small businesses fall outside the spotlight of national economic policy. Since nearly 90% of SMBs think their voice is NOT being heard in Washington DC, and current policy isn't giving these businesses any indication they are listening now. Yet these firms are driving innovation, job creation, and community resilience across every state. With targeted tools, designed specifically for their scale, speed, and resource constraints, policymakers can unlock outsized returns from modest investments.
CustomBoxes.io urges federal, state, and private stakeholders to engage not just with metrics, but with the lived experiences of entrepreneurs navigating this new economic era. From more inclusive capital models to modernized sourcing platforms, the road to long-term resilience starts by meeting small businesses where they are, and giving them room to grow.
Conclusion & Final Thoughts and the Road Ahead
The 2025 trade environment has introduced undeniable friction into small business growth. But it has also catalyzed a new era of creativity, agility, and customer-centric design. Packaging, once an afterthought, is now a strategic lever, a diagnostic indicator, and an economic microcosm.
If inflation moderates, trade policy stabilizes, and sourcing options expand, the businesses that leaned into adaptive packaging strategy will be those best poised to scale. For now, the goal is survival with style, and sustainability with strategy.
To policymakers: clarity matters more than rates. To businesses: your box is speaking. Make sure it's saying something customers will remember.
As the 2025 trade environment continues to evolve, one truth has become clear: small businesses are not waiting for certainty; they're building resilience in real time. Despite elevated costs, regulatory ambiguity, and a tightening capital landscape, these businesses are adapting, experimenting, and in many cases, thriving. And through it all, packaging has become a surprising, but deeply revealing, indicator of this transformation.
From our vantage point at CustomBoxes.io, where we process thousands of packaging orders, we've seen firsthand how cardboard boxes are telling a broader economic story. When brands reduce order volume or shift to cheaper materials, it's not just a cost-saving tactic; it's a signal of deeper shifts in consumer behavior, sourcing constraints, or macroeconomic concern. When they double down on QR-driven loyalty programs, it reflects an intentional pivot toward retention, storytelling, and brand equity in a world where every new customer is harder to earn.
This report has highlighted how real-world behavior, across states, industries, and company sizes, reveals a quiet recalibration of strategy. From Kentucky to California, from food manufacturing to personal care, businesses are responding not only to tariffs but to an entire economic context shaped by uncertainty. And notably, it's not just about how much they're spending; it's about how they're spending: shortening timelines, splitting sourcing, testing new SKUs in smaller packaging runs, and leaning into post-purchase touchpoints.
More than ever, the packaging order has become a microeconomic footprint, a tangible reflection of confidence, constraints, and calculated risk-taking.
At the same time, we've outlined how policy remains misaligned with the needs of these builders. Trade regulations are often blunt, reactive, and outdated, disproportionately burdening those who lack large legal teams or cash reserves. Capital access remains uneven. Tariff enforcement is unpredictable. And the systems meant to support innovation, such as procurement opportunities, SBA financing, and economic stimulus, still tend to favor scale over scrappiness.
But the opportunity is enormous. When supported with clear policy, accessible capital, and streamlined trade rules, small businesses have the agility to rebuild supply chains, innovate at the edge, and reconnect regional economies. These aren't just shipping boxes; they're growth signals waiting to be read.
So what does the road ahead look like?
It's one where custom packaging becomes more than a cost center; it becomes a platform for brand storytelling, customer education, and operational leverage. It's one where policy meets data, allowing real-time behavioral signals from small businesses to shape smarter regulation. And it's one where Main Street gets a stronger seat at the table, not just through advocacy, but through measurable contribution to domestic resilience.
In short: boxes may seem simple. But the choices behind them, how they're sourced, printed, packed, and optimized, reveal some of the most important economic decisions being made in America today. At CustomBoxes.io, we believe small businesses deserve clear, consistent rules, not surprises that derail planning. Through our data, partnerships, and role in the 10KSB network, we're advocating for smarter trade frameworks and more inclusive economic policy. We continue to call for transparency and reliability, so that SMBs, product innovators, and every entrepreneur in between can focus on building, not just reacting. We plan on participating in Goldman Sach's 10,000 Small Business Summit in Washington DC later this year to help spread the word and prove the importance of policies changes to help small businesses continue to grow.
Frequently Asked Questions (FAQs) On This Article:
Q: How is “packaging volume” measured in this report?
A: Packaging volume refers to the number of custom box orders placed through CustomBoxes.io, including changes in order size, frequency, material complexity, and value. It tracks both quantitative and qualitative aspects of packaging orders (e.g. more/less customization or premium features) rather than just raw square footage of box material.
Q: Over what time period is the data in this article collected, and how often is it updated?
A: The data covers orders from Q2 2025 (April–June) and compares those to historical trends. It also integrates supporting data (state‐level, NAICS industry data, etc.). The article reflects the most recent trends as of mid-2025; future updates may include later data as it becomes available.
Q: How representative is this data of the broader U.S. economy or all small businesses?
A: While the insights are drawn from thousands of small and mid-sized businesses using CustomBoxes.io across many industries and states, it's directional rather than perfectly comprehensive. Some sectors or regions with fewer users of this platform may be under-represented. The data is best used to spot trends, not to predict exact volumes for every sub-industry.
Q: What kinds of tariff changes or trade policies are driving the shifts in packaging volume?
A: The article indicates that increased import tariffs (especially on packaging materials or related goods), trade friction (such as retaliatory tariffs), and regulatory uncertainty are key drivers. Also relevant are shifts in sourcing (nearshoring or diversifying suppliers), lead time costs, freight costs, and material supply constraints.
Q: Are there specific NAICS codes or industries that are most sensitive to tariffs for packaging?
A: Yes. The report highlights certain growth industries (e.g. Food Manufacturing NAICS 311; Beverage Manufacturing NAICS 3121; Medical & Health Product Packaging NAICS 3391) that seem resilient or growing, and others (e.g. Apparel, Furniture & Home Goods, Electronics, Personal Care & Cosmetics) that are more strained. Sensitivity depends on how much the industry relies on imported materials, the cost of raw inputs, and shipping/leadtimes.
Q: How are small businesses coping with cost increases brought on by tariffs?
A: Several strategies are being used:
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Reducing packaging complexity and using simpler or more sustainable materials
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Ordering smaller, more frequent batches instead of large run orders
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Shifting to domestic suppliers where feasible
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Incorporating branding or QR codes that add value without excessively raising costs
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Absorbing part of the increased cost, rather than passing it entirely to customers
Q: What are some risks or limitations in using packaging order data as a signal of economic health?
A: Some limitations include:
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Packaging order volume can lag behind or lead real demand depending on inventory, seasonality, or supply chain disruptions.
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External shocks (e.g. raw material shortages, shipping delays) can distort trends independent of underlying demand.
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Platform-specific bias: data comes from those using CustomBoxes.io, which may have its own customer profile and may not perfectly map to all SMBs.
Q: How could businesses use these insights in their own strategy?
A: Businesses might:
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Benchmark their own packaging spend or trends against these industry & regional norms to detect early warning signs.
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Reevaluate sourcing, packaging design, or lead time strategies in light of tariff pressures.
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Use packaging as a branding/touchpoint tool to drive loyalty or differentiation, especially when marketing or advertising becomes more expensive.
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Monitor regulatory or policy changes more closely, potentially engaging in advocacy or seeking relief where available.
What was your data sources & Methodology?
The insights in this article are based on order-level data, chat support interactions, and advisory sessions with thousands of small and mid-sized businesses that use CustomBoxes.io. We analyze trends in ordering behavior, lead time preferences, box size selections, rush production frequency, and repeat customer impact to better understand how economic conditions and operational constraints affect real-world decision-making.
In addition to transactional data, we incorporate anecdotal feedback from customer support logs, custom design requests, and DIWM/DIFM (do it with me/do it for me) consultation sessions. These qualitative signals help contextualize the shifts we observe in supply chain planning, sourcing strategy, and packaging investments—especially among eCommerce brands, local retailers, and startups adapting to demand volatility and margin compression. While we have 1000s of data points, the data is still fairly volatile and meant to be directional only.