How Inventory Management Became a Competitive Edge in the Age of Tariffs

How Inventory Management Became a Competitive Edge in the Age of Tariffs

As tariffs and trade disruptions shake global supply chains, accurate inventory management has never been more important. In a recent episode of the Disruptive Minds podcast, Racklify Co-Founder Bill Carlin sat down with Jeff Annaraj, founder of Cybership, to explore how smart inventory practices can be leveraged as a competitive advantage.

Inventory Is Cash—and Risk

Inventory isn’t just a list of products on a shelf. For operators in today’s environment, it represents working capital and strategic risk. In an era of steep tariffs and rising fulfillment costs, stock that doesn't sell quickly ties up capital and limits a brand’s agility. The key is to treat inventory as a financial position—not just a physical asset. Understanding how much is held, how long it's held, and the total cost tied to it (including landed cost, tariffs, and storage) is the first step in improving profitability.

Lot Tracking, ABC Classification, and Inventory Flow

Precise tracking is no longer optional. Lot tracking helps sellers understand what they paid and when, which is essential when prices are rising rapidly. Combined with ABC classification—sorting inventory by sales velocity and value—brands can prioritize their most impactful SKUs. A-inventory moves quickly and should be tightly managed to avoid stockouts, while B- and C-inventory might offer higher margins and pricing flexibility.

Inventory flow is equally important. Businesses must manage what’s on hand and what’s in motion. Sellers who forecast well and flow inventory strategically will fare far better when supply chains are strained.

Returns Are No Longer Just a Cost Center

In a high-tariff world, returned inventory can become unexpectedly valuable. A unit that cost $3.50 last quarter may cost $8.50 to replenish—making that returned item a high-value asset rather than a write-off. Brands with systems to inspect, process, and reintegrate returns will unlock new margin opportunities.

The Right WMS Enables All of This

Visibility and control over inventory are only possible with the right warehouse management system (WMS). Yet too often, brands choose systems with features they don’t need—or fail to fully implement the features they do. The best WMS isn’t the one with the most bells and whistles. It’s the one that fits your business and makes it easier to maintain accurate inventory records, handle returns, track lot-level costs, and perform cycle counts without friction.

Bonded Warehousing: Powerful, But Not for Everyone

Bonded warehouses, which allow companies to delay tariff payments until goods are sold, are gaining popularity. But they only make sense for businesses with high-value, slow-moving inventory. Sellers of luxury goods, specialty medical products, or industrial equipment might benefit. However, for fast-moving, lower-cost items, the added cost and complexity may outweigh the benefits.

Strategic Thinking Beats Reactionary Moves

In times of disruption, success doesn’t come from reacting quickly—it comes from acting intelligently. Rather than rushing to raise prices or implement new systems, sellers should assess their margins, understand their customer expectations, and identify areas of inefficiency. Long-tail inventory, for instance, might become more valuable if tariffs affect mainstream competitors more.

Inventory is money. Treating it with the same rigor as cash flow or ad spend could be the key to surviving—and thriving—in the next wave of logistics uncertainty.

Listen to the full episode of Disruptive Minds and learn more about Cybership, a modern warehouse management solution built by 3PL operators who understand the challenges firsthand.