What Retail and Consumer Businesses Need to Doin the Next 90 Days

By Joe Henwood — former VP Global Omni Channel Inventory Management, Levi Strauss & Co.

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Most retail and consumer businesses I talk to have spent the last two years building tariff scenarios. Few have built the capacity to act on them. That is the real exposure.

The mistake I see most often is treating tariffs as a finance problem. They are not. They are an inventory problem, a sourcing problem, a pricing problem, and a planning problem — and they show up in margin twelve months after the decisions that caused them. The businesses that come out of this period in better shape than they went in will be the ones that move now, in the right sequence, on the right levers.

Here is the 90-day operator playbook I have used to stabilize and reposition a $2.6 billion inventory book across 23 international markets through repeated tariff disruption. It is not exhaustive, and every business has its own constraints. But the sequence holds.

Days 1–14: Get the baseline right

Before you make a single decision, you need a clean view of three things: country-of-origin exposure by SKU, current and projected duty cost as a percentage of landed cost, and contracted vendor commitments through the next 18 months.

This sounds basic. It almost never exists in the form you need it. Sourcing data lives in one system, vendor contracts live in another, and HTS classifications are usually owned by a customs broker who does not talk to merchandising. Get those three streams into one view in the first two weeks and you will already be ahead of most of your peer set.

While you are doing that, run an HTS classification audit. Misclassification is more common than people think, and the upside on getting it right is real — sometimes 200 to 400 basis points of duty cost on individual categories. Do not wait for a CBP audit to do this work.

Days 15–30: Stabilize

Three immediate moves.

First, freeze new commitments outside of stocking minimums. Every PO you cut at the wrong country mix in the wrong week is a margin problem in Q3. The cost of holding a buy for two weeks is small. The cost of locking in 90 days of inventory at the wrong duty rate is not.

Second, reset open-to-buy. Most planning teams have OTB built off pre-tariff cost assumptions. That number is wrong now. Rebuild it on landed cost, not FOB, and re-run the receipt plan. You will find capacity you did not know you had — and exposure you did not know you had.

Third, open the vendor cost-share conversation. Not a memo. A direct call from a senior commercial leader to each strategic vendor. The ask is simple: how do we share this. The answer varies — payment terms, MOQ flexibility, packaging, freight terms, sample cost — but the conversation has to start. Vendors who hear from you in week three will be more flexible than vendors who hear from you in month four when everyone is calling.

Days 30–60: Move the structural levers

This is where most teams stall. The first 30 days are stabilization. The next 30 are about moving the things that actually cost something to move.

Country mix. Identify your top 10 SKUs by tariff exposure and run a true alternative-source analysis. Not "could we move this," but "what is the all-in cost — including tooling, transition risk, and lead-time impact — of moving this versus absorbing the duty." For most businesses, the answer is not "move everything." It is "move the top 20% of exposure, accept the rest, and use pricing for the gap."

Pricing. Do not pass through across the board. Build a category-by-category pricing model that takes into account elasticity, competitive set, and brand permission. In one program, we moved 60% of duty exposure into price on roughly 18% of the assortment, with no measurable elasticity hit. The rest absorbed.

Buffer strategy. This is where I disagree with most of the conventional advice. The instinct is to pull inventory forward. Sometimes that is right — particularly on long-lead categories with stable demand. Often it is wrong. Pulled-forward inventory at the wrong assumption rate is just trapped working capital. Be selective. Only pull forward where you have demand certainty and where the duty arbitrage is meaningful.

Days 60–90: Position for the new equilibrium

Two final levers most teams under-use.

Foreign Trade Zone optimization. If you have meaningful import volume and you are not running an FTZ strategy, there is real money on the table — particularly on inventory that may be re-exported, transformed, or held for extended periods. The setup cost is non-trivial. The return is durable.

First sale valuation. If you import through a middleman structure and you can document the manufacturer-to-middleman price, you can often base duty on that lower price. This is a legitimate and well-established strategy. It requires real documentation discipline and broker support. It is also one of the highest-ROI duty strategies available to mid-market importers.

Three mistakes to avoid

One. Treating this as a one-time event. Tariff policy is now structurally unstable. Build the capability to repeat this exercise quarterly, not the capability to survive the next round.

Two. Under-resourcing customs and trade. Most mid-market businesses run trade compliance as a back office function. In this environment, it is a margin function. Either elevate it internally or engage outside help with real depth.

Three. Optimizing for cost over agility. The most expensive position to be in is locked into a low-cost source you cannot move. The next 24 months will reward businesses with optionality. Build it now.

This is execution work. It does not lend itself to a deck. The businesses that will gain share through this period are the ones that decide, sequence, and move — and that is what this work requires.

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Joe Henwood is part of The Convened's Operational Excellence practice. To discuss a tariff response or supply chain resilience challenge, contact us.