If you're a retailer that does a lot of international business, you're likely experiencing significant issues relative to the trade war. As tariffs are unpredictable and seem to be constantly increasing, it's important to manage them effectively. Here are a few tips.
Be Transparent with Your Customers
Most customers know that tariffs are being levied and that the trade war is going on. Be transparent with your customers. Let them know if prices are increasing and why they're increasing. If items are being held in customs, they should know. You can tell your customers the exact amount that the tariffs are costing you, and explain why these tariffs are directly impacting your business.
Consider Price Increases Carefully
Price increases can be tolerated by the market or they can be rejected. It depends on the price tolerance of your customers and your competition. If your competition is under-priced compared to you, then your customers may leave. At the same time, if the tariffs increase too far, then you may not be able to survive without significant price increase.
Take a Look at Domestic Suppliers
While domestic suppliers have traditionally been more expensive than overseas suppliers, it's possible that your domestic suppliers are now the more affordable option. Domestic suppliers also tend to be faster. Consider looking for suppliers domestically or closer suppliers, which aren't subject to the tariffs.
Keep an Eye on the Tariffs
The tariffs are increasing rather unpredictably, and some announcements are being made through unofficial venues. Make sure you keep an eye on the tariffs, because that can impact the cost of your products later on. Plan for the future: figure out how much your costs are going to be moving forward, and price your goods accordingly.
Reduce Your Overhead
If you can't increase the costs of your product, you need to reduce your overhead. During times of economic recession, it's usually prudent. Tariffs can be treated similarly. Try to reduce your overhead to compensate for the overall cost of the tariffs. You may need to downsize your operations, cut back on labor, or reduce your product line. Either way, the tariffs are likely to be temporary, and you just need to weather the immediate future.
Are you worried about how tariffs will impact your business? Are you unsure of how to continue? An international trade attorney can help. A trade attorney will give you information about your company's responsibilities during this time.