TFT: Are Tariffs a Time to Pivot?

Rising costs might not just be a threat they could be your signal to rethink pricing, product strategy, or even customer focus.

Let me start with saying I understand that the current tariff situation is putting some serious strain and pain on small businesses. Paying 1.5 times for inventory basically over night is not a good thing and will challenge the best businesses. I do think that any time we are faced with a great challenge we have an opportunity for great success. Yes, just like Spider-Man’s great responsibility. :-) But consider what these tariffs will challenge us to do?

• What innovation will come?

• What new business model will you come up with?

• What customers will you encourage to leave?

These are the questions we’ll be looking at today. Thanks for your time and attention. Remember someone else could benefit from this too so why not share it with them.

Are Tariffs a Time to Pivot?

Tariffs Can Trigger Innovation

Tariffs often create cost pressure especially for businesses dependent on global supply chains. Given our globalization of the past decades pretty much every supply chain is global at this point. But instead of only absorbing the hit, use this moment to explore new revenue streams.

• Can you develop a product with domestic components?

• Offer a premium version?

• Enter a less price-sensitive market?

• Is it time to go international?

Consider the fact that the tariffs only apply to bring that product into the US. You could drop ship them directly into Europe and open an entirely new market for yourself. Take this time to reflect on what you could change for your US customers, but also remember there is an entire world out there.

Your Business Model Might Need to Evolve

Sometimes, tariffs reveal over-dependence on one material, region, or customer type. Step back and ask: Is our current model too fragile? Should we source differently, sell to a new segment, or pivot to higher-margin offerings? You may also look to lease products that you sold before. Or lease to own depending on the product. Maybe there are items that you can reclaim in house and set up a used product offering. Yes it is great to increase your pricing and protect your margins, but what else should you be considering. Being small and nimble is something that gives you an advantage over any bigger competitors. Use that. Talk to your customers and see what they would like to have change. You many just need to increase your price and that could help you also.

Price Increases Are Not Always Bad

Customers expect price increases in inflationary or protectionist environments what matters is how you do it. If you’re delivering real value, and if you’re transparent about why prices are changing, your best customers will stick with you. Or some will not and that is ok too. Sometimes you need to make room for more customers that are willing to pay for your value.

When you are increasing prices start with a conversation. Remember your customers read the news too. They know the tariffs are in place and they know you are being impacted. If you competition is not talking to them about it some other supplier is. So just let them know.

“Hey customer, we’re looking into the impact of these tariffs on our products. There is likely a pricing increase coming and we’re looking at implementing that in a month.”

Feel free to add any humor to additional details that fit your relationship with your customers. Try to give them time to digest the information. Also this will give them time to ask your competition what their increase is going to look like. Finally the timeline let’s them know when they need to stack their orders on you before the price goes up.

Action Step:

Pick one product or service you offer. Map out three ways to reposition or reprice it in response to rising costs or supply chain shifts.

• What changes can you make to your supply chain?

• What business models can you test this week?

• What script to you need to develop for your customer conversations?

Schedule 30 mins this week to answer one of these questions.

Recommended Reading:

“How Small Businesses Can Survive the Next Wave of Tariffs” - Harvard Business Review

“When and How to Raise Prices” – Harvard Business Review

“Inflation, Tariffs, and the Opportunity to Rebuild Supply Chains” – McKinsey

• Are you looking to improve your sales process or hire your first sales professional?

• Are you a technical expert ready to transition into sales and need guidance?

If so, we’re here to help! Reach out to us with your specific challenges, and we’ll schedule a time to discuss how we can develop a customized plan to meet your goals.

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