Jul 7, 2025

The 2025 U.S. tariffs, especially on Chinese imports, have disrupted supply chains, hiking expenses and challenging profitability. During this time of economic uncertainty, supply chain digitization and diversification are critical to small business owners as they boost efficiency, reduce costs, and enable resilience in adapting to trade disruptions. Using cloud-based SaaS solutions across the Internet of Things (IoT), AI, and cloud computing allows SMBs to manage a diversified supply chain that reduces the impact of changing tariffs and economic changes. What Is Supply Chain Digitization? Supply chain digitization integrates cloud-based technologies into supply chain management to streamline operations, enhance visibility, and enable data-driven decisions. Unlike traditional supply chains reliant on manual processes, digitized systems automate and optimize key functions. These technologies include: Inventory of Things : Tracks inventory and shipments in real-time. ShipBob offers IoT solutions that integrate with its Warehouse Management solutions, with cloud-based tracking for SMBs, enabling faster fulfillment, with better accuracy, and real-time shipment and returns monitoring. AI and Machine Learning : Powers demand forecasting and inventory optimization. Cogsy provides AI-driven tools for eCommerce, including demand forecasting and planning tailored for small online retailers. Cloud-based SaaS applications : Solutions like Shopify, ShipBob, and Cogsy work together via the cloud, allowing instant access across all your locations, seamlessly integrating, and providing real-time insights into your online business. For small eCommerce brands, digitization transforms supply chain management into a competitive edge. According to Flowspace , real-time inventory visibility can prevent stockouts and overstocking, saving significant costs. The Impact of U.S. Tariff Changes on Small Businesses Supply Chains U.S. tariff policies targeting Chinese imports have created significant hurdles for small eCommerce brands. Since President Trump's second inauguration, tariffs on Chinese imports have ranged from 20% on two-thirds of imports to 145% on most Chinese goods, and are currently at approximately 50% on all Chinese imports. These tariffs impact over $400 billion in goods imported from China annually, hitting key eCommerce sectors. MORE FOR YOU Tesla CEO Elon Musk Confirms Wild Rumors As $37 Trillion ‘Emergency' Predicted To Blow Up Bitcoin Price Texas Flood Live Updates: White House Says Blaming Trump For Flooding A ‘Depraved Lie' As Death Toll Hits 94 Student Loan Forgiveness Payment Counts Halted By Department Of Education On July 2, the Trump Administration announced a new tariff policy with Vietnam , placing a 20% tariff on Vietnamese products and a 40% tariff on products deemed to be trans-shipments (targeting Chinese goods being rerouted through third-party countries in order to avoid the higher Chinese tariff rates). These tariffs pose significant challenges, including: Increased Costs : Higher tariffs raise import costs, squeezing margins or forcing price hikes that may deter customers and reduce sales. Supply Chain Disruptions : Shifting from Chinese suppliers is resource-intensive, as SMBs often lack the means to onboard new suppliers quickly. Economic Uncertainty : These new tariffs may cost U.S. households between $1,100 and $1,700 per year, according to the Yale Budget Lab , and will likely drive households to seek substitutions based on increased prices. Unlike large corporations, small businesses often rely on a limited supplier base, making them vulnerable to these disruptions. Four Ways Supply Chain Digitization Addresses Tariff Challenges Digitization offers SMBs cloud-based tools to navigate tariffs and trade disruptions. Here are four key ways digital solutions help, with SMB-focused SaaS providers driving impact: Enabling Supplier Diversification Challenge : Reliance on Chinese suppliers is unsustainable due to high tariffs. Solution : Digital supplier platforms connect SMBs with global suppliers in low-tariff regions like Vietnam or Mexico. Gembah is an SMB-friendly platform for sourcing suppliers worldwide, reducing dependence on high-tariff countries. Impact : Diversified suppliers lower tariff costs and enhance resilience, maintaining competitive pricing. Optimizing Inventory to Manage Costs Challenge : Tariffs increase the cost of holding inventory, especially for high-duty goods. Solution : Cloud-based inventory management software, like ShipBob, manages stock levels and helps prevent overstocking of tariffed goods. Impact : Reduced inventory costs and fewer stockouts improve profitability and cash flow. Streamlining Logistics for Efficiency Challenge : Tariffs and supplier shifts cause delays and higher shipping costs. Solution : Logistics software optimizes shipping routes and reduces transit times. ShipStation provides cloud-based logistics solutions for SMBs, automating shipping and tracking in real-time. Impact : Streamlined logistics improve delivery times and offset tariff-related expenses, boosting customer satisfaction. Enhancing Transparency and Compliance Challenge : Complex tariff regulations are tough for resource-constrained SMBs. Solution : Compliance software ensures adherence to trade rules. Avalara offers cloud-based tax and duty calculation tools, simplifying cross-border compliance for SMBs. Impact : Enhanced transparency and compliance build trust with customers and regulators, minimizing risks. The Role of Geographically Diverse Supply Chains Digitization facilitates geographic supplier diversification, offering SMBs: Reduced Tariff Exposure : Sourcing from low-tariff countries like Vietnam or India lowers costs compared to Chinese suppliers. Given current tariff rates, U.S.-based suppliers may be more cost-effective and have the benefit of no tariffs. Improved Optionality : A diverse supplier base allows quick pivots in response to tariff changes or other supplier-related disruptions. Enhanced Resilience : Geographic diversification mitigates risks from regional issues, ensuring stability. For U.S. retailers, this ensures price competitiveness and supply chain stability. McKinsey , focusing on global trends impacting businesses, highlights how digital supply chains enhance agility, critical for business when addressing volatile trade environments. Netsuite digs deeper into this concept, specifically addressing the capabilities needed by SMBs. Real-World Examples of Supply Chain Digitization in Action Here are examples showcasing how small eCommerce brands leverage SMB-focused SaaS solutions: Supplier Diversification : Use Gembah to build a Mexican supply chain, avoiding high Chinese tariffs. Given Mexico's geographic proximity, lower cost labor pool, real-time supplier data enables cost-effective sourcing with faster supply chain timelines. Inventory Optimization : Employ Cogsy's AI-driven tools to forecast demand. This reduces the stock of tariffed goods by focusing on low-duty alternatives while ensuring maximum demand capture. Or, purchase smaller batches of high-tariffed inventory if you expect tariff rates to decline shortly. Logistics Efficiency : Integrate with ShipStation, ShipHero, or ShipBob to automate shipping, track deliveries in real time, and negotiate better rates, offsetting tariff costs. Improving your operational efficiency will increase margins and give you more flexibility in addressing tariffs. Compliance : Uses Avalara to automate tariff calculations, ensuring compliance and avoiding penalties on international shipments while reducing supply chain delays associated with non-compliant imports. Data-Driven Insights: Comparing Traditional and Digitized Supply Chains Digitized supply chains provide significant advantages over traditional supply chain management approaches. The table below summarizes these benefits: It may seem daunting to implement these small business tools, but you'll find most of these solutions cost between $25 to $500 per month, and your total cost outlay will likely range from $500 to $1,500 per month. Implementing these solutions will save most business owners 10 to 20 hours per month in supply chain management activities. Many of these tools will also automatically alert you to supplier price changes, tariff changes, transportation price changes, and other cost savings opportunities that will allow you to rapidly respond to opportunities to speed up your supply chain while reducing costs that translate into increased profitability. Conclusion Supply chain digitization is a lifeline for small U.S. eCommerce brands facing tariffs and global trade challenges. By leveraging SMB-focused SaaS solutions, small businesses can enhance agility, cut costs, and compete with larger players. As tariffs reshape global trade, digitization is a necessity. With a modest upfront investment of time to deploy these tools, SMBs will enjoy long-term benefits: resilience, profitability, and growth. For U.S.-based retailers, the path forward is clear: digitize to thrive.