Tariffs Are Back—Now What? A Retail Supplier’s Guide to Staying Afloat
- The HRG Team
- May 5
- 3 min read
Let’s be honest: if you’re a retail supplier right now, it probably feels like the floor just shifted underneath your feet. Again. With a fresh wave of U.S. tariffs rolling in, landed costs are rising, buyers are becoming tight-lipped, and forecasting has become more of a dart throw than a data-driven process.
We’ve been here before—sort of. But what’s different this time is the scope, the speed, and the sheer number of unknowns.
Boyd Evert, CEO of HRG, put it bluntly on a recent episode of The Savvy Supplier: “There’s no baseline for this. No historic analog. This is uncharted territory.” And when you're operating without a map, every decision feels riskier.
Who’s Going to Eat the Tariff Costs?
Short answer: everyone.
Suppliers, retailers, and consumers are all in this stew together. But here’s the kicker—if you try to absorb too much of the cost yourself, your margins will tank. If you pass it all to consumers, demand may plummet. If you try to split the difference, you’re still guessing in the dark.
Let’s take a real-life-inspired (but fictional) example.
A mid-sized kitchen appliance brand sees its COGS jump 18% due to new tariffs. Their options?
Raise prices: Risk losing shelf space and sales.
Eat the costs: Watch profits evaporate.
Negotiate with retailers: Get creative—consider bundling items, reducing pack sizes, or adjusting promotional timing.
They went with option three. The result? A collaborative markdown plan with their buyer that preserved both margin and sell-through velocity.
That’s the power of proactive communication.
The Forecasting Fog
If you're struggling with forecasting right now, you're not alone. Traditionally, you would look at previous years’ data to model lift from promotions, markdowns, or seasonal trends.
But now? There is no playbook. We're not just forecasting demand—we're forecasting policy.
Add in the fact that consumers are being choosier with their wallets, and even dependable categories are shaky. Big-ticket items, like TVs or furniture, might see panic buying before tariffs take effect. But mid-range goods? They’re at risk of being passed over entirely.
It’s not just about forecasting sales. You need to forecast sell-through and markdown risk, and that’s where many suppliers get blindsided.
The Hidden Tariff Trap: Overstock and Deductions
Imagine this: You ship pallets of a best-seller ahead of a promotional window. But then, foot traffic is soft. Your forecasted lift never materializes.
What happens next?
Retailers hit you with markdown demands. Then clearance fees. Then returns. Suddenly, your “smart inventory play” becomes a deduction nightmare.
Boyd gave a gut-punch example from a past client: the buyer pushed in more inventory than agreed upon. When it didn’t sell, a new buyer claimed the supplier must have insisted on it—and hit them with the clearance bill.
The lesson? Don’t overestimate your control. Deductions happen when forecasting fails. And tariff volatility increases that risk exponentially.
Know Your Product—Really Know It
One of the most eye-opening moments in the podcast? A supplier was all set to roll out the product during COVID. Ingredients? Check. Packaging? Check. Labels?
Nope.
It turns out that the ink for their label printing came from a country under lockdown. The product was ready, but couldn’t be shipped.
That’s how fragile the modern supply chain is. From chips to zippers to bottle caps—every tiny component can be a liability. Boyd recommends building a deeper line of sight into what’s in your product and where it’s from.
Because in the world of tariffs, what you don’t know can absolutely hurt you.
A Better Way Forward
So what’s a supplier supposed to do? Here’s Boyd’s advice in a nutshell:
Start communicating now. Don’t wait until you're underwater. Let buyers know what’s coming and why.
Partner strategically. If you want to avoid demand-killing price hikes, work with retailers to craft smarter offers.
Prepare for deductions. Tariffs increase volatility, and volatility increases invalid deductions. Don’t let them pile up unnoticed.
HRG has helped clients recover millions in deductions, often tied to exactly these kinds of disruptions. And while we can’t predict the next tariff, we can help you minimize the financial fallout.
Take Action: Tariffs are the storm. Deductions are the flood you didn’t see coming. Don’t wait until you’re knee-deep in chargebacks—reach out to HRG for a free assessment today.
Learn more at The Savvy Supplier podcast.
