Featuring Josh Bartel
In this video, Josh Bartel, Co-founder and CEO of Hydrian, discusses how to navigate the turbulent import tariff environment. He shares three key observations and strategies to help businesses adapt.
First, Josh notes significant price relief from suppliers due to tariffs. He advises importers to contact suppliers for potential discounts and domestic businesses to leverage existing inventory bought pre-tariff. Competition for these deals is high, so act quickly.
Second, Josh observes a shift towards domestic sourcing, though he cautions that increased demand affects pricing and lead times. A hybrid approach, maintaining some import sourcing, is recommended.
Finally, Josh addresses preparing for a potential economic downturn. He emphasizes responsive forecasting and inventory control, especially for long lead-time items. Prioritize inventory dollars over service levels for lower-volume products and actively manage open purchase orders to adapt to changing demand.
Price changes in business-to-business relationships require careful consideration. Unlike online retailers who can adjust prices dynamically, B2B companies must prioritize long-term relationships. Sudden price hikes can damage trust and client retention. Transparency and open communication about price adjustments are key to maintaining strong partnerships. Sharing anticipated changes early on allows clients to adapt and strengthens collaboration. A measured approach to pricing fosters stability and demonstrates respect for established connections
While some suppliers exhibit flexibility in mitigating tariff impacts through discounts, others use tariffs as a pretext for raising prices even without direct exposure. Businesses must be vigilant in scrutinizing price increases and requesting justification. Arming yourself with market information about actual tariff rates and competitor pricing empowers you to negotiate effectively. Don’t hesitate to push back against suspicious price hikes. Transparency and open communication are crucial in these negotiations.
The current economic landscape, marked by fluctuating tariffs, inflation, and supply chain disruptions, is not a temporary anomaly. Businesses should adapt their operations to this “new normal” rather than waiting for a return to previous stability. This includes developing flexible sourcing strategies, nurturing relationships with secondary suppliers, and adopting a more responsive forecasting approach. By acknowledging the ongoing nature of market volatility, businesses can proactively mitigate risks and maintain a competitive edge.
The allure of buying large quantities of inventory when prices appear low can be tempting, but it’s a risky strategy. Commodity prices are inherently volatile, and attempting to time the market is often futile. Instead of speculating, focus on maintaining appropriate inventory levels to meet customer demand. A responsive forecasting model and close monitoring of sales and profitability are more effective than gambling on future price movements. Concentrate on core business strengths and leave market speculation to the financial professionals.
Timestamp: [00:00:46]
One surprising observation Josh shares is the flexibility shown by importers directly affected by tariffs. Many are willing to work with clients to mitigate the impact, offering discounts or sharing the burden. He advises businesses to actively engage with suppliers and explore potential cost-sharing arrangements. This proactive approach can lead to mutually beneficial outcomes and strengthen supplier relationships.
“Importers who are directly exposed to tariffs have shown a surprising amount of flexibility in working with our clients. An example might be they have a 25% tariff that applies to all the goods they sell, and they’re willing to give you a 10% discount.”
Timestamp: [00:02:06]
Josh discusses the effect of inflation on pricing decisions. While inflation remained relatively low at the time of recording, the anticipation of rising inflation among businesses is influencing their behavior. This includes taking more aggressive inventory positions, anticipating higher prices, and bracing for potential economic slowdowns. This forward-looking perspective highlights the need for adaptable strategies and a proactive approach to managing potential risks.
“What’s important about that fact is that if they believe that’s the case, and they do, they’re going to respond by doing a few things. One is taking more aggressive inventory positions, buying more stock now before inflation happens.”
Timestamp: [00:05:47]
Josh underscores the importance of flexible sourcing strategies. Having backup suppliers, even if they are not as price-competitive, can be invaluable during times of disruption. He advises businesses to not just identify these secondary sources but to actively cultivate relationships and maintain a baseline level of purchasing. This proactive approach ensures a readily available alternative in case of disruptions with primary suppliers.
“We recommend not only knowing who those companies are, but starting to have some level of buying with them. So, let’s say you import your product from overseas, you get really great pricing, maybe reserve 10% of your purchasing for a domestic source that’s not nearly as price-competitive, but you maintain that relationship.”
Timestamp: [00:03:35]
Josh discusses emerging supply chain disruptions, noting instances of empty shelves and product shortages. He draws parallels to the COVID-related shortages, although he anticipates a milder impact. He emphasizes that scarcity drives prices upward, impacting both acquisition costs and selling prices. Businesses need to be aware of these potential disruptions and factor them into their pricing and inventory strategies.
“One more thing I want to mention, too, is supply chain disruptions. We are starting to see, in June 2025, as we predicted a couple of months ago, some supply constraints. In other words, we’re seeing empty shelves among certain retailers, certain products.”
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