Tips For Businesses Impacted By Tariff Changes

Tariffs have always been a part of doing business internationally, but the way they are changing lately? It’s enough to give any business, big or small, a headache. If you’re a small business or e-commerce brand, it probably feels like the rules are shifting every time you blink. 

The latest wave of tariffs on imported goods, plus stricter trade rules, has made sourcing from abroad a lot more complicated and expensive. If you rely on overseas suppliers, you’re likely feeling some pressure. 

Here’s the good news: you don’t need to overhaul your entire business. You just need to know how to adapt. We’ll walk you through how these tariff changes could impact small businesses, the implications for your supply chain and how a more strategic inventory system can help protect your margins and your sanity.

How do tariff changes impact small businesses: Understanding tariffs and the supply chain

How do tariffs affect small businesses and entrepreneurs? Tariffs don’t necessarily make things more unpredictable; it’s when their rates change that things get more expensive and uncertain.  

When retail tariffs go up, your costs of goods manufactured do, too. This might cause retailers to order less from overseas, which means fewer shipments overall. Shipping time will be quicker with less traffic, but customers could end up waiting longer for their products or facing empty shelves. 

So, what exactly is a tariff? It’s a tax on goods imported from another country. Governments use them to protect domestic industries. While importing goods can still be cheaper than relying on domestic manufacturing, when tariff rates rise beyond what was anticipated, it raises the costs for everyone. Small businesses, though, often feel the impact more, since they have fewer financial resources and less experience handling price hikes. If those added costs aren’t correctly baked into your product pricing, they can throw off your margins, your forecasting and potentially result in taking a loss on your product.

This hits especially hard for retail businesses facing new tariffs, where margins are already slim. That’s why it’s crucial to understand how to compute the costs of goods manufactured and make sure you’re accounting for every new cost that’s showing up. 

Efficient inventory management for small businesses

If tariffs are squeezing your margins, your inventory is where you can start to regain control.

Efficient inventory management isn’t just about avoiding overstock. It’s about knowing where your money is, how fast it’s moving and whether operations are helping or hurting your bottom line. 

Setting up a strong inventory management system for your business helps you know what’s in stock and what’s on the way (Psst - this is where an open-to-buy tool can really help. We’ve written about that here). It also enables you to strategically adjust pricing with thoughtful retail price management and react quickly when costs or timelines shift. 

Too often, inventory management is treated as an afterthought, but when it’s done right, it’s one of your most powerful tools. 

Retail inventory management tools give you real-time visibility across your products, platforms and seasons, helping you stay on top of what’s selling and when. To truly get the most out of that visibility, though, it’s important to have strong reporting and data analysis so your decisions aren’t just fast, they’re informed and strategic. 

If your current process feels manual and messy, it’s probably time to explore new inventory management ideas. Our team can help you get organized, whether it’s through forecasting, scenario planning or navigating economic uncertainties.

Tips on inventory management and forecasting with the current economic climate

Here’s the reality: tariffs are a moving target. Many businesses aren’t making sweeping changes just yet. If you’re already sourcing your products from overseas, there’s a good chance tariffs are currently baked into your costs. The trick is making sure your inventory plan is strong enough to handle any increased costs without tanking your margins. 

This is where great demand planning comes in. The goal? Don’t waste a single unit. When every product costs more to get through the door, every unsold item stings a little more. Here are four expert-backed inventory strategies to help protect your business and keep things on track:

1. Forecast Proactively - Not Reactively

You don’t need a crystal ball, just better data. Planning for retail means knowing what’s selling, spotting what’s trending and having a rough idea of where new costs (like tariffs) might hit. To build stronger forecasts, track your product and category level performance, utilize rolling trends to understand the variance from your fixed monthly plans and build in a little buffer for any surprises.

2. Make Tracking Less of a Headache 

If you’ve been wondering how to keep track of your inventory more efficiently, start by identifying and eliminating blind spots. Set alerts for low inventory, know your vendor lead times and sort your products by performance or margin so you know what’s actually worth restocking. Stock management for small businesses doesn’t need to be complex, it just needs to be consistent. 

3. Explore Raw Materials Forecasting 

If you’re working with products you manufacture or assemble, raw materials forecasting can give you more flexibility and fewer delays. It helps you stay nimble with what you produce, avoid overcommitting to finished goods and negotiate better terms with suppliers. Even if you don’t manufacture your own products, forecasting raw material and component item needs can help you negotiate better costing with your vendor. By committing to larger quantities of raw materials with trigger dates to call what version of your product they’ll ultimately become, you can take advantage of volume discounts.

4. Don’t Rely on Just One Supplier

A small business inventory management tactic to try: diversifying your suppliers. You wouldn’t rely on one marketing channel, so why put all your eggs in one country or vendor basket? If you don’t know where to start, try mixing domestic and international suppliers, partnering with flexible fulfillment teams and comparing landed costs from different sources. A little variety in your retail operations gives you way more wiggle room when things change fast. 

5. Focus on Value

In uncertain times, it’s tempting to try everything to cut costs, but don’t hurt your customer base by lowering your quality. Your customers are watching their budgets, but they’re still watching your brand, too. This isn’t the moment to scale things back too far. Stick to what you do best, lean into value and make sure every offering delivers more bang for their buck. That’s how you keep trust with your customers strong, even when the market’s shaky.

6. Set Yourself Up with Support from Demand Planning Experts 

Demand planning is your secret weapon when the market gets messy, but it’s a whole lot easier to navigate complexity when you have a team of experts in your corner. Our team can help with smart, informed decisions so you know what’s in stock, when to pivot and how to avoid costly inventory missteps. It’s not just about having a plan, it’s about having the right team behind it. 

With solid forecasting, efficient inventory systems and a willingness to adjust your supply chain where needed, your business can stay ahead of the curve and keep your customers happy. 

If you need a hand at turning your planning from “chaotic” to “crushing it”, we’ve got ideas. Reach out to us to set up a discovery call with our team.