How Tariffs Will Impact Your Inventory-Based Business

Our team has spent the better part of the last decade helping inventory-heavy businesses navigate financial challenges. President Trump’s recent “Liberation Day” tariff announcements represent a significant shift in the economic landscape that will affect virtually all businesses with physical inventory—even those without direct international operations.

Understanding the Ripple Effect of Tariffs

Many of you may initially believe tariffs won’t affect your operations because you don’t directly import products. This is a dangerous misconception. If you maintain inventory in your business, here’s why you should be concerned:

  • Indirect Supply Chain Exposure: Even if you purchase exclusively from U.S. suppliers, those suppliers may import components or materials, passing tariff-related price increases to you.
  • Competitive Pricing Shifts: Your competitors may have different supply chains with varying exposure to tariffs, potentially changing your competitive position in the market.
  • Customer Sensitivity: Your customers’ ability to absorb price increases may be affected by their own tariff-related challenges.

Services to Help You Navigate Tariff Challenges

1. Supply Chain Vulnerability Assessment

Our team can map your entire supply chain to identify direct and indirect tariff exposure. This assessment includes:

  • Identifying which of your products contain components from affected countries
  • Calculating potential cost increases at various tariff levels
  • Prioritizing which product lines face the greatest risk

One client recently discovered that 63% of their “American-made” product line contained components subject to the new tariffs—information that proved crucial for their planning.

2. Fractional CFO Support for Strategic Planning

In uncertain times, having experienced financial leadership becomes essential. Our fractional CFO services provide:

  • Scenario-based financial modeling under different outcomes
  • Cash flow forecasting to ensure liquidity during price adjustment periods
  • Strategic pricing recommendations to maintain margins
  • Assistance with supplier negotiations

3. Inventory Management Optimization

Tariffs fundamentally change inventory equations. Our operations consultant can help:

  • Reassess optimal order quantities as carrying costs change
  • Identify alternative sourcing opportunities
  • Develop strategic inventory buildup plans before tariff implementation
  • Implement advanced inventory tracking to monitor margin changes by SKU

4. Cost Structure Analysis & Restructuring

When external costs rise, internal efficiency becomes even more critical. We offer:

  • Comprehensive cost structure analysis to identify offset opportunities
  • Process reengineering to improve operational efficiency
  • Overhead reduction strategies
  • Activity-based costing implementation to pinpoint profitability by product line

Next Steps to Protect Your Business

The businesses that thrive during tariff implementation will be those that act quickly and strategically. We recommend taking these steps immediately:

  1. Schedule a Tariff Impact Assessment: We can quickly evaluate your specific exposure.
  2. Review Your Pricing Strategy: Determine which costs you can pass through versus absorb.
  3. Analyze Your Supplier Contracts: Identify terms that may offer protection or flexibility.
  4. Develop a Communication Plan: Prepare to explain necessary changes to customers.

We’re Here to Help

The tariff landscape will continue evolving in the coming months, but with proper planning and expertise, your business can navigate these changes successfully. Our team specializes in helping inventory-based businesses adapt to economic shifts through data-driven strategies.

Contact us to schedule your tariff impact assessment and protect your business from this significant market disruption.

Christine Gervais

Christine Gervais is a licensed CPA, using her skills to help businesses grow and achieve their fullest potential. Christine has a Master’s degree in accounting from Southern New Hampshire University in addition to holding her CPA license for over a decade. Notably, Christine is a nationally recognized speaker providing education to other CPAs on how to best serve clients as well as instruction on a wide variety of topics for business owners on how to maximize success. Christine prides herself on the value she can bring to clients with her extensive tax knowledge and provides strategic, forward-thinking financial strategies to help clients grow. When not behind her desk, you can find Christine spending quality time with her daughter and stepson or tending to the family’s excessively loved farm animals.

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At Cultivate Consulting Group, we understand that you want to achieve lasting financial stability that leads to the legacy you envision for your company and family. The problem is traditional CPA firms are not known for proactive communication, which leads to uncertainty when it comes to your business’s tax efficiency and financial standing.

Based in Berwick, Maine and serving the USA
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