Tariff volatility has become the new norm, and for DTC brands, it often hits where it hurts most: margin. But while tariffs can feel like external shocks beyond your control, the smartest brands aren’t just reacting—they’re using this as an opportunity to get leaner, faster, and more resilient.
The answer? Strategic operational investment. With the right moves, you can offset rising costs and turn today’s disruptions into tomorrow’s advantage.
Here’s your deep dive into how.
Rethinking Global Sourcing During a Tariff Crisis: Go Beyond China
For years, China dominated global manufacturing. But as tariffs rise and geopolitical uncertainty persists, relying on China as your primary sourcing base is becoming a high-risk move. Diversification isn’t just about minimizing disruption—it’s about future-proofing your brand.
Sourcing Outside of China Due to Tariffs
- Vietnam: A rising star in apparel, footwear, electronics, and home goods manufacturing. Lower labor costs, increasing infrastructure investments, and favorable trade agreements make Vietnam a top alternative.
- India and Indonesia: Competitive for textiles, beauty products, and some consumer electronics. With large labor pools and growing export infrastructure, these countries offer cost-effective alternatives.
- Latin America: Mexico and Central America provide nearshoring benefits for North American brands—faster shipping times, cultural alignment, and fewer tariff risks.
Vendor diversification doesn’t just minimize exposure—it gives your brand the leverage to negotiate, adapt, and move faster when conditions shift.
Vendor Strategy: Diversify and Negotiate
Vendor diversification within any country (or region) is a smart hedge even if you’re not fully shifting away from China. It prevents single points of failure and gives you leverage when it comes to pricing, timelines, and terms.
Here’s how to optimize:
- Split Production Across Multiple Vendors: Avoid total dependency on any single partner.
- Negotiate MOQs and Payment Terms: Especially important during uncertain economic cycles.
- Leverage MOVE’s Factory Network: MOVE helps DTC brands secure better pricing and production flexibility by connecting them with vetted factories in Vietnam, China, and beyond, while handling on-the-ground sourcing, inspections, and negotiations.
Freight and Fulfillment: Cut Costs Without Compromising Delivery Due to Tariffs
Shipping costs, customs delays, and last-mile inefficiencies add up quickly—and are often overlooked. Tariffs may increase your landed cost, but there are several levers within your logistics network to reduce the impact.
Strategies to Reduce Freight Costs:
- Audit Your Freight Carriers: Are you paying premium rates for inconsistent service? Regularly benchmark your freight partners.
- Consolidate Shipments: Fewer, larger shipments can reduce per-unit costs, especially when negotiating with 3PLs or forwarders.
- Switch Shipping Modes Where Possible: For certain SKUs or markets, slower shipping methods may free up cash flow while keeping costs low.
- Re-evaluate 3PL Partnerships: A 3PL audit can surface avoidable fees, long-term storage issues, or outdated pricing models.
MOVE’s 3PL audit and logistics optimization services help uncover operational inefficiencies that silently drain profit, especially important when every dollar counts.
Inventory and SKU Strategy: Streamline to Protect Margins
Inventory management is a high-impact area often overlooked during tariff reviews. Every SKU adds complexity. Every stockout or overstock situation creates financial pressure. Now is the time to tighten your SKU strategy and build smarter systems.
Quick-Turn Inventory Systems
- Smaller, More Frequent Orders: Reduce exposure to tariff-driven cost spikes.
- Faster PO to Fulfillment Pipelines: Shorter lead times mean more accurate demand planning and fewer surprises.
- Bridge the Gap Between Marketing and Ops: Align promotions with available inventory to prevent underperformance.
Re-think SKU Breadth
- Consolidate or Bundle: Remove underperforming SKUs or bundle them into higher-margin packages.
- Dual-Source High Volume SKUs: One vendor in Vietnam, another in China—build options into your system.
- Prioritize Profitability: Not all SKUs are created equal. Invest in those that return the most per unit after tariffs and freight.
Labor Strategy: Offshore Operations to Stay Lean
As tariffs inflate product costs, one of the easiest ways to recover margin is through labor. But cutting headcount isn’t the answer—offshoring is.
Offshore hiring allows you to reduce payroll costs significantly while maintaining the same output. The key is to hire for the right roles and set up the right systems.
Roles That Work Well Offshore:
- Supply Chain Coordinators: Help with PO tracking, vendor follow-ups, freight quotes, and inventory analysis.
- E-commerce Admins: Manage product listings, Shopify updates, and promotion schedules.
- Customer Support Specialists: Deliver consistent CX at a lower cost across time zones.
- Operations Assistants: Track KPIs, coordinate with vendors, prepare weekly reports, and assist with logistics scheduling.
More Staffing offers fractional and project-based offshore hiring, so you can scale ops without ballooning overhead.
Strategic Tariff Moves That Drive Results
Whether you’re trying to respond to a recent tariff hike or proactively prepare for future shocks, these five areas offer the biggest opportunity for impact:
- Diversify your sourcing beyond China
- Negotiate better terms with your vendors
- Conduct 3PL and freight audits
- Streamline your SKU and inventory strategy
- Tap offshore talent to lower payroll costs
These aren’t just operational tweaks—they’re strategic decisions that can mean the difference between surviving and scaling.
Conclusion: Invest in Your Supply Chain Like It’s a Growth Channel
Marketing gets the credit for growth. But supply chain is what makes it profitable. In a world where tariffs, inflation, and global disruptions aren’t going away, your operations team is your moat.
Smart DTC brands are already investing in long-term supply chain resilience. They’re sourcing smarter, negotiating better, reducing hidden costs, and building agile systems that can thrive no matter the climate.
If you’re ready to move from reactive to strategic, talk to Move Supply Chain. But if you want to improve your operations, hire with More Staffing today.
