The Real Impact of Tariffs on Retailers

Tariffs might seem like something that only affects governments or global corporations, but the truth is, they ripple through the entire supply chain—impacting everyone from manufacturers to retailers to the end consumer.

Right now, I’m constantly hearing, “It’s too early to understand where we’re going to land with these tariffs—things are changing by the hour.” 

What Are Tariffs, Really?

At a basic level, tariffs are taxes placed on imported goods. They’re often used to protect domestic industries or as leverage in international negotiations. But when tariffs are imposed—especially without much warning—it creates pricing pressure across the board.

For retailers, this can be a major challenge. Will the higher price be absorbed by the retailer, or the end consumer? Should they split the difference?

Here’s How It Impacts Retailers:

1. Higher Costs of Goods: Retailers who import products from countries facing tariffs are hit with immediate cost increases. These costs often can’t be absorbed, so they’re either passed down to the customer or cut from the retailer’s margins.

2. Pricing Instability: It’s hard to set pricing strategies when your cost basis is shifting every few weeks. This creates a huge challenge in inventory planning, especially for seasonal goods.

3. Disrupted Supply Chains: Tariffs force many companies to rethink sourcing—often moving operations to new countries or suppliers. That’s not just a cost issue—it’s a time and relationship issue too.

4. Strategic Pivots: Retailers have to make tough calls. Do you raise prices and risk losing customers? Eat the cost and hurt your bottom line? Or pivot to new products or suppliers entirely?

Let us know what you think will happen next!