One moment you’re laser-focused on influencer campaigns and conversion rates—the next moment, your packaging costs to your supply chain have doubled and your margins are shrinking. If you’re a DTC brand owner, you know that what happens behind the scenes can make or break your business.
Supply chain isn’t always the star of the show—but in today’s environment, it’s becoming impossible to ignore. With tariffs on the rise, geopolitical tensions heating up, and global disruptions showing no signs of slowing, e-commerce brands are being forced to reevaluate long-standing sourcing strategies.
For direct-to-consumer (DTC) brands, the pressure is on to adapt—or risk falling behind. This blog, inspired by an episode of the Andrew Faris podcast featuring More Staffing CEO and supply chain expert Lara Guevara, will show you why diversifying your supply chain is no longer optional. We’ll share expert insights from Lara and actionable strategies to future-proof your operations. Ready to take control? Let’s dive in.
Why Tariffs Are Hitting E-Commerce Brands Harder Than Ever
Section 301 tariffs on Chinese imports have been a growing challenge for businesses, driving up costs and reshaping trade strategies since 2019.
- What Really Happened?
- Since 2019, Section 301 tariffs on Chinese imports have steadily increased.
- Tariffs now range from 7.5% to 150%.
- How It Affects Businesses and Supply Chains:
- Increases cost of goods sold (COGS), cutting into profit margins.
- Forces businesses to adjust pricing or manage inventory differently.
- Real-Life Example:
- Andrew, a mid-sized DTC founder:
- 11% of his revenue was spent on packaging due to high tariffs on cardboard from China.
- No immediate alternatives, leading to reduced profitability.
- Andrew, a mid-sized DTC founder:
- Main Point:
- Over-reliance on one sourcing destination, like China, can leave businesses vulnerable to rising costs. Diversifying sourcing is crucial to stay competitive.
- Takeaway:
- Over-relying on one country, no matter how efficient or familiar, is proving to be a major vulnerability. And in today’s environment (we all know the ongoing tariff rollercoaster and we can’t forget the global wake-up call of COVID-19), that kind of risk is no longer manageable, it’s a flashing red warning light.
The good news is that you don’t have to overhaul everything overnight. But you do need a plan. Assess your supply chain now, diversify your sourcing options, and stay ahead of geopolitical shifts. Building resilience into your supply chain isn’t just about avoiding disruption—it’s about unlocking smarter, more sustainable growth in the long run.
Why Vietnam Is Emerging as a Strategic Sourcing Alternative for Your Supply Chain
Vietnam is quickly becoming a sourcing hotspot for e-commerce brands looking to extend their supply chains. Here’s why it’s capturing global attention:
- Lower labor costs make Vietnam a competitive alternative to China, especially for labor-intensive sectors like apparel and footwear.
- Government incentives include tax breaks, reduced tariffs for exporters, and support for foreign investments.
- Skilled manufacturing capabilities extend beyond textiles to electronics, furniture, and more.
However, it’s not all smooth sailing. Longer lead times and higher minimum order quantities (MOQs) compared to Chinese suppliers can pose challenges. Successful transitions require thorough planning, as illustrated by a DTC home goods brand that achieved a 15% reduction in production costs by pre-sourcing suppliers in Ho Chi Minh City while staggering orders during peak seasons.
How to Diversify Without Disrupting Your Current Supply Chain
Switching sourcing strategies doesn’t mean jeopardizing your business’s operations. According to Lara Guevara, resilience is rooted in preparation and strategic foresight.
Her golden rule? Always secure 1–2 backup vendors with approved samples. This eliminates the migraines of scrambling for alternatives if your primary supplier falters.
Additional tips to ease the transition include:
- Pre-sourcing suppliers and placing blanket purchase orders (POs) as a way to stabilize cash flow.
- Planning sourcing timelines of 30–45 days with reliable partners to reduce disruptions.
By creating a diversified portfolio of suppliers, you’ll mitigate risks while maintaining agility in unpredictable markets.
The Real Cost Comparison Vietnam vs. China
When analyzing supply chain alternatives, cost is the most critical factor. Here’s a clearer picture of comparing Vietnam and China as sourcing hubs.
- Unit costs: Vietnamese suppliers often offer competitive rates across key industries, closing the gap with China.
- Payment terms: Chinese vendors may demand 50% upfront and the rest before shipment. Vietnamese suppliers, however, frequently extend net-30 terms, which are advantageous for cash flow.
- Financing implications: With longer payment terms, businesses can plan inventory financing more effectively and free up working capital for growth initiatives.
Small Supply Chain Tweaks That Deliver Big Results
You don’t always need a complete operational overhaul to see meaningful savings. Incremental adjustments can have an immediate impact.
- Renegotiate vendor contracts: Work with existing suppliers to review costs and explore volume discounts or extended payment terms.
- Optimize freight options: Consider switching to slower (and cheaper) freight options or consolidating shipments to reduce transit costs.
- Evaluate packaging strategies: Standardize sizes and optimize pallet configurations to drive down third-party logistics (3PL) fees.
Small, focused changes like these can significantly reduce expenses and improve efficiency without significant disruption.
Countries to Watch Beyond Vietnam
While Vietnam is currently leading the charge as an alternative sourcing hub, other countries are emerging as viable players on the global supply chain stage.
Top contenders include:
- India for textiles and IT components.
- Bangladesh for affordable garment production.
- Mexico for nearshoring opportunities to the US.
- Thailand and Malaysia for electronics and automotive parts.
- Turkey and Colombia for fashion-forward apparel and accessories.
Each of these nations comes with its strengths and challenges, such as tariff implications and production capabilities, so careful research is vital.
Emergency Supply Chain Tactics for Goods Already in Transit from China
What do you do if your goods are already on the move and you’re caught off guard by tariff spikes?
- Consolidate shipments to fill full container loads (FCL) instead of relying on costly air freight.
- Partner with proactive freight forwarders who can help you adjust routes and minimize tariff timing risks.
- Strategically classify goods to optimize duties while planning inventory so non-critical items can be shipped during less volatile periods.
Acting quickly and strategically can alleviate financial strain while protecting your supply chain integrity.
Why This Is the Wake-Up Call DTC Brands Needed
For many DTC brands, the ongoing tariff crisis serves as a sobering reminder that the supply chain is often the most under-optimized part of their operations. By ignoring inefficiencies, businesses leave valuable margins on the table.
This wake-up call also shifts the narrative from growth-at-all-costs to margin-driven growth. Brands prioritizing sustainable OPEX discipline and building resilient supply chains are positioning themselves for long-term success.
Resilient brands operate proactively—not reactively. With proper planning and diversification, navigating volatile supply chains doesn’t have to be a disruptive risk but an opportunity to bolster your business operations with agility and strength.
Build Supply Chain Resilience Today With More Staffing
Ready to build a resilient team to support your growth? More Staffing offers tailored staffing solutions to help optimize and strengthen your business. Let us help you find the right talent for long-term success. Reach out today to get started!
