Sharpen Your Pencils—August 1 Is Coming

Jon Allen
Jul 8
3 min read

Will Your Retail Margins Survive the Tariff Hike?

There’s a moment every summer when back-to-school season starts to sneak in. You see it in the aisle resets, the clearance bins, and the sudden run on #2 pencils. For suppliers, this

August brings a different kind of “back to school” vibe—except the stakes are your bottom line.

New U.S. tariffs are set to take effect August 1. That’s your deadline. And just like test day, it’s coming whether you’re ready or not.

So sharpen your pencils.

Because if you’re leaking cash through avoidable retail deductions—and you haven’t run the numbers on how tariffs will hit your landed costs—then you’re walking into the next quarter unprepared.

The Quiet Before the Quake

In April, the administration announced a sweeping round of tariffs that could affect billions of dollars in imported goods—especially from China, Vietnam, and other countries without reciprocal trade agreements. The launch was paused. Then paused again. But not forever.

August 1 is the line in the sand.

If you’re importing $5 million annually in finished goods, a 20% tariff means a $1 million cost surge. Add in a couple hundred thousand in annual deductions and you’ve got a double hit to your margin—before you’ve even renegotiated pricing or freight.

And yet… many brands still aren’t running scenarios. They haven’t dusted off deduction ledgers. They’re waiting to “see what happens.”

That’s like waiting to study until the fire alarm goes off.

Deductions and Tariffs: One Weakness Amplifies the Other

Let’s play out a real-world (but fictional) scenario.

Say you’re “Everbright Kitchen Co.” You sell premium cookware to national retailers. Half your SKUs are imported. You already know freight rates are volatile, and your buyers are holding your pricing flat. Suddenly, tariffs kick in—and your COGS rises by 15% across 60% of your line.

So you go looking for savings. And you realize: You’ve been writing off $25K–$50K a year in small chargebacks. A mislabeled pallet here, a late ASN there. Nobody ever circled back to dispute them.

Now you’re in a cash crunch. And those small hits? They’re suddenly the difference between break-even and a P&L with red ink.

Here’s the Move: Sharpen Up Before August 1

There’s no good time for a margin squeeze. But there is a smart time to fix what you’ve been ignoring. And that time is right now.

Here’s your 3-step action plan:

Identify recurring deduction patterns—especially those tied to compliance, shortages, or shipping missteps.
Quantify your exposure—what will the new tariffs actually cost you? Build models.
Bring in experts—like Woodridge Retail Group and our partner HRG, who specialize in deduction recovery and prevention.

You can’t control tariff policy. But you can control what’s happening in your ledger.

The Woodridge Edge

At Woodridge Retail Group, we help small and mid-sized suppliers think bigger—and operate smarter. Our deduction recovery services, powered by HRG, bring experienced eyes to your retail accounts. We identify recoverable dollars, dispute invalid deductions, and help prevent new ones from happening in the first place.

It’s not magic. It’s just disciplined work, done by people who know what to look for.

And in this season of uncertainty, that discipline is your biggest asset.

Final Bell

This isn’t fearmongering. It’s a reminder. The test is scheduled. The margin math is real. And you’ve got just enough time to sharpen your pencils before class starts.

Let’s talk before August 1 hits.

Book a call