Tariff Series - Best Practices for B2B Distributors and Manufacturers in a Tumultuous Time

December 10, 2019 Brooks Hamilton

In the U.S., another round of tariffs was announced last week on imports from Argentina and Brazil, building upon the substantial tariffs imposed on Chinese imports in August and a looming $300 billion tariff action proposed for January 2020. The ripple effects are being felt by manufacturers, whose costs are rising for certain inputs, and distributors, who are paying higher prices to their suppliers and having to pass that cost on to their customers.

Nearly every customer we work with is impacted by tariffs in some form or fashion. The administrative burden alone is an unforeseen curve ball, as some companies have had to dedicate one or more full time employees to the cause. This is because the products included in each tariff exclusion changes each month, bringing substantial additional paperwork and a steep penalty for underpayment or nonpayment.

Beyond administration, tariff actions are highly impactful to financial results. The challenges revolve around changing cost basis, updating prices and making inventory decisions that incorporate tariff considerations. If a company’s costs are increasing due to tariffs, they do have a number of options on the table for an effective response.

The right tariff strategy is unique to each business, so our expert team has put a lot of thought into various pricing game plans based on real-world customer experience.

The discussion continues in our Talking Tariffs series, where we cover:

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Talking Tariffs - What are Tariffs, How Do They Work, and What Does It All Mean for B2B Pricing
Talking Tariffs - What are Tariffs, How Do They Work, and What Does It All Mean for B2B Pricing

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