Tariff Shock: What It Really Means for Your Bottom Line (And What To Do About It)

When tariffs hit, they don’t knock politely. They kick the door in.

One week you’re forecasting a solid Q3, maybe even thinking about expanding your line. Next, your container costs jump 12%, your email pings with a rate update from your 3PL, and your buyer casually asks, “Are you planning to absorb that or raise your price?” That moment? That’s when the shock hits.

We’ve Seen This Movie Before

Rewind to 2018. The U.S. hit Chinese imports with sweeping tariffs. Over the next two years,

American companies paid roughly $80 billion in additional duties. That wasn’t just a blip on the P&L. It was a seismic shift. Margins thinned, promotional plans got scrapped, and many supplier-retailer relationships got tense—fast.

But here’s the thing: not everyone lost.

Some suppliers used that disruption as fuel. They reshored strategically. They renegotiated freight contracts. They made bold, informed decisions and positioned themselves as problem-solvers for their retail partners. And while others were bleeding margin, these suppliers were building trust—and sales.

What’s At Stake This Time Around?

With new rounds of tariffs now taking aim at imports from key global partners, the pressure is back on. And the stakes might be even higher this time. Why?

Because retailers have less patience for surprises.Because consumers are more price-sensitive than ever.And because your competitors are already making moves.

Let’s talk about what you should be doing right now—before the pressure turns into panic.

1. Know Your Real Cost—Down to the Penny

Start with your fully loaded cost per SKU. And we mean really loaded.

• FOB isn’t enough.

• Add freight, duty rates, brokerage fees, tariff surcharges, and compliance costs.

• Then factor in your retail programs—markdown allowances, new-store discounts, and promotional fees.

If you don’t know exactly what each unit is costing you after tariffs, you’re flying blind. And blind pricing is how margin leaks turn into margin floods.

Fictional example: One supplier we spoke with had been quoting $1.88 per unit to their retailer—but post-tariff, their actual landed cost had risen to $2.03. They were losing money on every sale and didn’t know it.

2. Model “What If” Like Your Bottom Line Depends on It (Because It Does)

Nobody has a crystal ball—but scenario planning is the next best thing.

• What if tariffs go up another 10%?

• What if freight surcharges increase before the holiday season?

• What if your retailer resists price increases—how long can you hold?

You need a clear decision tree—model three to five realistic outcomes. Don’t wait until the cost hikes are already on your invoice.

3. Don’t Just Email Your Buyer—Talk to Them

Here’s a reality that’s easy to overlook: your buyer doesn’t know what’s happening in your supply chain unless you tell them. Yes, they’ve heard about tariffs. But they haven’t done the math on how that impacts your items.

So come prepared.

• Bring your cost breakdowns.

• Explain the changes.

• Offer solutions—not just problems.

Maybe that means suggesting an alternate pack size. Or timing a price change with a seasonal reset. Or offering short-term support to keep promotions alive.

The key? Be proactive. Be transparent. And be someone your buyer can trust when things get tough.

What You Don’t Want to Do

Wait. Hope it blows over. Or worse—absorb the hit and quietly bleed cash.

Tariffs are sticky. Once they’re here, they rarely go away fast. Even temporary ones can linger for years. If you’re taking the hit now with the idea that it’ll disappear next quarter, that’s wishful thinking dressed up as strategy.

Final Thought: Don’t Let Tariff Shock Become Margin Erosion

The best suppliers in retail aren’t just reactive. They’re resilient.

They stay in the know, speak up early, and plan like their profits depend on it—because they do.

And when the dust settles, those are the brands that buyers remember. Not because they had all the answers, but because they showed up prepared.

Not sure where your costs really stand—or how to communicate it to your retailer? Let’s fix that. Woodridge Retail Group can help you navigate the tariff impact, protect your margins, and build the kind of transparency that strengthens buyer relationships. Let’s talk.