Rathna Sharad, CEO of FlavorCloud, the cross-border, AI-powered platform, said when calculating actual and final landed costs in the current global trade war market, it all comes down to country of origin. Take the same product, but different origin and there will be a different tariff bill.
“As retailers go into peak season and supply chain and logistics networks brace for it as well—it’s the country of origin that determines a final consumer cost or whether a retailer can make margin on an item that’s sourced in one place, manufactured in another, held in yet another and sold in yet another,” Sharad told Sourcing Journal.
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Here, Shara shares insights into the challenges facing retailers and brands in managing trade disruptions and market challenges and explains how to mitigate the impact.
Sourcing Journal: When it comes to sourcing and pricing, what are the challenges retailers and brands face amid tariffs and other disruptions?
Rathna Sharad: The biggest challenge is making sourcing decisions months ahead while the economics can change before the product reaches the customer. Tariffs, freight costs, currency movements and customs requirements all affect profitability. A lower factory price does not necessarily translate into a lower landed cost.
Brands also face a difficult pricing decision. How much of that added cost can they absorb, and how much can they pass on to the customer without losing the sale?
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