Perhaps one of the most common words on people’s minds today is “tariffs.” It makes sense. For small and mid-sized businesses (SMBs), tariffs—which impose taxes on goods imported from other countries—bring unique, business-impacting challenges. They affect everything from supplier costs to sales channels and everything in between.
While it’s hard to quantify how much of an impact tariffs can have on your bottom line, there’s no question that profits are challenged, and as a product business, your internal panic scale may be rising.
Here at Cin7, we believe that the right tools can help ratchet down the concerns by mitigating the power tariffs have over your business.
How Tariffs Can Impact SMBs
As a small business, you may import your merchandise and/or materials to manufacture your products from foreign countries. You may also sell your products and services internationally, relying on favorable relations with trade partners around the world to stay afloat.
Tariffs can:
- Disrupt global supply chains
- Raise cost of goods and materials for SMBs
- Increase prices for customers
- Engender trade issues (including retaliatory tariffs)
- Raise inflation
- Reduce competitiveness
These and other potential issues hit you right in the wallet, reducing your cash flow and making tariffs difficult, if not impossible, to pay. On the flip side, tariffs may encourage consumers to purchase items domestically and incentivize businesses to manufacture their products on U.S. soil, which could bring additional business your way.
Still, uncertainty abounds when tariffs are afoot, which begs the question, How can product businesses like yours navigate such an unsettled marketplace?
The answer? With Cin7.
Managing Tariffs with Help from Cin7
Cin7 is modern, cloud-based inventory management software designed to help SMBs like you unify your inventory by connecting your inventory, suppliers, warehouses, and sales channels onto a single platform. As to the tariff-specific benefits of Cin7’s all-in-one solution, let’s start with financials.
Managing and tracking financials is a complex process even without adding tariffs into the mix. Thankfully, Cin7 offers a variety of tools designed to handle whatever is thrown your way.
Our seamless integrations with Xero and QuickBooks means you have specialized accounting features that offer real-time synchronization of and visibility into inventory, orders, and financial data. These integrations along with Cin7’s customizable reports deliver cash flow, revenue, and expense insights along with fixed asset management capabilities that help you make better decisions. You can also track your landed costs through automated COGS.
Having accurate, tariff-adjusted financials ensures that you have your finger on the pulse of all your financial needs, enabling you to adjust as inevitable economic headwinds try to blow you off course.
Smarter Supplier Management
With Cin7, tracking costs by supplier and SKU to identify tariff-heavy items is a cinch. This capability supplies you with the information you need to assess how your supplier base is—or is not—working for you. If it’s not working for you, it may be time to shift suppliers.
Additionally, Cin7 offers data-driven insights into real-time inventory quantities and values, operational workflows, and customer demand, all of which help simplify purchase orders and make renegotiating contracts (due to tariff-induced changes) a process that works in your favor.
Data-Driven Reporting
Speaking of data-driven insights, with Cin7, you have access to 100+ reports that uncover margin pressure points and optimize pricing or sourcing strategies. These reports also help you identify growth and cost-saving opportunities under new tariff structures. Understanding how you can modify and improve operations so that the full cost of tariffs doesn’t land on your customers will help your business continue to grow while your competitors stagnate.
Efficient Inventory Storage
Storing inventory sounds easy, but you know from first-hand experience that sounding easy and being easy are two different things. When you’re managing huge amounts of inventory that include raw materials, differing components, and finished goods, keeping track of where they are, where they need to be, and when they need to be there (as well as paying attention to over-and-under stocking, shifting customer demands, and warehouse inefficiencies) requires sophisticated inventory management software, like Cin7.
Cin7 gives you real-time visibility into every aspect of your inventory while automating the inventory process. Relying on Cin7 means you’ll be able to reduce carrying costs by streamlining warehouse operations and to improve accuracy and efficiency in inventory transfers and order picking. Every inch of efficiency and cost savings you get out of Cin7 is a foot-long benefit you pass on to your customers.
Multichannel Selling Flexibility
Tariffs or no, product businesses should be selling on more than one channel. Multichannel selling provides customers with options. If a customer wants to conveniently shop online, they can, and if they want to see and handle the product in-store before they purchase it, they can do that, too.
Additionally, as a business with multiple sales channels, you have a diverse revenue stream that gives you some wiggle room if one channel is impacted by tariffs more than the others. You can also see how well differing pricing strategies work in your various channels in response to tariffs, affording you insights into which direction is most profitable.
You can manage your multichannel selling needs within Cin7, quickly adapting your processes and workflows in response to tariffs. This includes utilizing our native integrations with platforms like Amazon, Shopify, and WooCommerce to ensure seamless fulfillment and inventory syncing even if you must make tariff-specific adjustments to your inventory.
AI-Powered Inventory Forecasting
A changing market is hard to read but not with Cin7 ForesightAI. As an AI-powered inventory forecasting software, it uses machine learning to predict demand and maintain optimal stock levels, helping you avoid costly overstocking or stockouts and freeing up capital for investing back into your business. It’s a powerful automated reordering tool that takes tariffs and other financial challenges into account, keeping businesses like you surefooted.
Managing Costs in Tough Times with Cin7
Managing your product business while juggling tariff costs is not the first unprecedented challenge you’ve faced. Just a few short years ago, the pandemic was the gale rocking SMBs’ bottom lines, but businesses that relied on Cin7 emerged on the other side stronger than ever, like ABC School Supplies.
In 2020, ABC School Supplies—an Irish business that offers over 20,000 educational resources for preschool, primary, and secondary students—needed a comprehensive inventory solution to replace its slow, laborious legacy system.
“When Covid happened,” says Managing Director Brian Higgins, “everything closed down. We got really busy, and I had to do a lot of orders myself. I realized we couldn’t continue this way.”
After researching 10 systems, Cin7’s pricing, speed of installation, and integrations with applications ABC School Supplies already used (including Xero and WooCommerce) made Cin7 the clear winner. “Pre-Covid, we were averaging around 50 orders a day, but now, we can realistically handle about 400 to 500 orders a day if need be.”
In addition to shaving their average order time from about 10 minutes to 2 minutes and 40 seconds, ABC School Supplies has:
- Reduced their error rate to less than 1%
- Increased their distribution capacity
- Supported their next-day delivery promise
- Quadrupled their business
And after ABC School Supplies implemented ForesightAI, they were able to find shortages before there were shortages and to input specific lead times based on individual suppliers. Brian says that ForesightAI also helps them determine the efficacy of each product.
“Now, if we have losers, we can act by removing them. When we find winners, we’re targeting them through things like our Google ad campaigns. With chasers, we’re giving products a chance. To be honest, for 20 years, we probably cut products that would probably be selling well today.”
The pandemic was a costly situation for SMBs, and tariffs may shape up to be just as costly. Fortunately, Cin7 is an all-in-one inventory, supply chain, and financial system that can adapt to changing global trade policies and unexpected events with finance, forecasting, and inventory tools that help you stay profitable.
Bottom line, tariff-related challenges are no match for Cin7. Request a free demo today to learn more.
