When tariffs shift unexpectedly, businesses operating across borders face more than simple cost increases. They confront fundamental uncertainty about whether products already ordered will remain profitable when they arrive. An ASBN interview with Unbound Merino’s co-founder describes that challenge at the Canadian apparel company, which the report says has more than $100 million in sales and sells in more than 100 countries. The report does not specify a period for that sales figure.
Dan Demsky, Co-Founder and CEO of Unbound Merino, has watched tariff policies reshape the economics of his business with little warning. The company manufactures apparel in countries including China, Vietnam, Japan, Portugal, Italy, and Canada, creating complex exposure to shifting trade rules. Because most of its revenue comes from the U.S. market, changes in American tariff policy hit the company directly.
“We’re okay for now because we prepared for it, but it feels like the tariff policy can change on a dime,” Demsky said. He said the company sometimes faces inventory lead times of six to ten months. By the time goods arrive, tariff rates can change significantly enough to wipe out the profit margin that existed when the order was placed.
The Cost of Unpredictability
Unbound Merino’s Canadian-made pants illustrate the dilemma precisely. When entering the U.S. market with tariff increases in place, Demsky faced two choices: raise prices to preserve existing margins or absorb the additional cost and accept losses on products that were previously profitable. Neither option is painless.
The situation also reveals how tariffs affect businesses in the country imposing them, not just foreign suppliers. While Unbound Merino is headquartered in Canada, Demsky said the current environment has created more uncertainty for the company’s U.S. operation, which includes American employees and a U.S. distribution warehouse.
Demsky cautioned against viewing the dispute as affecting only one side of the border.
Preparation and Financial Flexibility
Unbound Merino has managed the disruption partly because the company entered the tariff period with cash reserves and time to plan ahead. According to the interview, that preparation helped it absorb some of the disruption.
For other entrepreneurs facing similar uncertainty, the lesson is less about predicting where tariff policy will go and more about building flexibility into the business itself. Demsky remains optimistic that trade tensions will eventually be resolved, although he acknowledged that relying on that outcome introduces its own risk. He described preparation as a response to uncertainty, not a way to predict the next policy decision.
From Travel Apparel to Direct-to-Consumer Scale
Before tariffs became a major planning concern, Demsky was focused on finding a gap in the apparel market. After discovering Merino wool, he saw an opportunity to create clothing designed specifically for travelers. ASBN describes the company’s products as versatile pieces that resist odors and wrinkles while regulating temperature, helping travelers pack less. Existing Merino products tended to focus on outdoor and activewear, while Demsky wanted pieces that could transition from a hike to an evening out.
He launched Unbound Merino through Kickstarter, initially hoping to generate $30,000 in presales during the first month. The campaign ultimately generated roughly $400,000. The company has since built its business almost entirely through e-commerce and direct-to-consumer sales without relying on traditional retail or wholesale distribution.
Now, Demsky sees those channels as the next phase of growth. The company continues to rely heavily on digital marketing, using paid advertising, search, influencers, and constant testing to find effective ways to acquire customers. Demsky said that approach gives smaller companies an opportunity to compete with much larger brands.
Possible New Sales Channels
Demsky described testing marketing channels, identifying what works and then investing more heavily in those areas.
Future growth could include Unbound Merino’s own retail locations and wholesale distribution. These remain possible next steps in the account, rather than completed changes to the business. For now, the company continues to rely heavily on its e-commerce and direct-to-consumer model while managing uncertainty around the costs of future inventory.