What Smart Brands Are Doing About Tariffs (And You Should Too)
Apr 18, 2025
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Lara Guevara, CEO of Move Supply Chain and More Staffing, shares her expertise on navigating the complexities of tariffs affecting e-commerce. She discusses innovative sourcing strategies beyond China, highlighting the benefits and challenges of shifting to Vietnam. Lara emphasizes the importance of proactive inventory management and diversifying supplier relationships to mitigate risks. The conversation touches on how tariffs might even present unexpected opportunities for brands willing to adapt and optimize their supply chains.
Tariffs from China are significantly impacting e-commerce, pushing brands to reevaluate and adjust their supply chain strategies.
Vietnam is becoming a key alternative sourcing location due to lower labor costs, quality production, and better payment terms compared to China.
Businesses must establish resilient supply chains now to proactively navigate potential disruptions and maintain long-term sustainability.
Deep dives
Impact of Tariffs on Supply Chains
Recent discussions have highlighted the significant impact tariffs, particularly those from China, are having on e-commerce supply chains. In previous years, businesses faced tariffs ranging from 7.5% to 25%, leading companies to collaborate closely with vendors to minimize costs through strategic negotiations. Currently, escalating tariffs can reach up to 150%, making the existing models in China increasingly unfeasible. As a result, brands are compelled to reset their supply chain strategies to consider alternative sourcing locations to mitigate high costs.
Exploring Alternatives: Sourcing in Vietnam
Vietnam has emerged as a promising alternative for sourcing, especially for businesses that have relied heavily on China. The country boasts a growing manufacturing sector, competitive labor costs, and often, higher quality production standards, which can be advantageous for brands looking to pivot. As tariff-related pressures grow, businesses are encouraged to explore sourcing in Vietnam as both a viable and strategic option for their supply chains. The seamless geographical and logistical connections between China and Vietnam enable businesses to transition production with relative ease.
Advantages and Disadvantages of Sourcing in Vietnam
Sourcing from Vietnam presents several benefits, such as lower labor costs relative to China and more favorable payment terms, potentially allowing for net 30 or even net 60 arrangements. While Vietnam manufacturers often have higher minimum order quantities (MOQs) and longer lead times compared to Chinese manufacturers, the overall advantages, especially in quality control and government support for manufacturers, render it an appealing choice. Additionally, shorter production timelines can be achieved through advanced forecasting and staggered production workflows. Brands should assess the trade-offs associated with transitioning to Vietnam while keeping a close eye on quality, MOQs, and lead times.
Leveraging Cost-Saving Strategies
Companies are encouraged to seek immediate cost-saving measures while exploring alternative supply chains. Negotiating with existing suppliers for better pricing, optimizing warehousing arrangements, and utilizing freight solutions effectively can provide significant savings. For instance, combining shipments and employing efficient packing techniques can reduce logistics costs substantially. These strategies can be effective short-term solutions while brands work to transition their supply to more sustainable sources.
Future Planning for Supply Chain Optimization
It is crucial for businesses to develop resilient supply chains in anticipation of potential disruptions, rather than reacting only when crises arise. Establishing alternative vendor relationships, ensuring diversified supply sources, and streamlining operational costs can better position a brand to handle unforeseen challenges. Companies should consistently assess their supply chain structures, focusing on long-term sustainability over immediate cost reduction. By building robust supply chain strategies now, businesses can thrive in an unpredictable economic landscape and become more agile in responding to future changes.
MORE STAFFINGRecruit, onboard, and train incredible virtual professionals in the Philippines with my friends at More Staffing by visiting https://morestaffing.co/af. MOVE SUPPLY CHAINPay less for COGS, get shorter lead times, and improve payment terms in your supply chain with help from Move Supply Chain at https://movesupplychain.com.//Lara Guevara is the CEO of Move Supply Chain, a Philippines-based supply chain agency, and More Staffing, a hiring firm to help you find, recruit, onboard, and train incredible Filipino talent for your business. Visit Move Supply Chain at https://movesupplychain.com and More Staffing at https://morestaffing.co/af. //CHAPTER TITLES:
2:18 - Helpful Ideas To Work Through Tariffs For Ecommerce
7:59: Exploring Other Countries Besides China For Sourcing
12:00: Trade Offs Using Vietnam
23:09 - Stockpiling Inventory To Save Costs
36:02 - Could Tariffs Be Good For Ecommerce Brands?
