How to Manage Tariff Risk in Distribution

In today’s global economy, tariffs can shift overnight — and for distributors, those changes ripple quickly across pricing models, supplier relationships, and customer expectations. While tariffs are nothing new, the pace and complexity of trade updates in recent years have made it harder for teams to react quickly and plan confidently.

If you’re a U.S.-based distributor running Epicor Prophet 21 ERP — particularly one sourcing products from international suppliers — understanding and mitigating your tariff exposure has become a critical part of your supply chain strategy.

When deciding how to manage tariff risks, companies need to consider risk mitigation solutions and risk management strategies.

Key Considerations for Managing Tariff Risks

• Solution: Implement automated tariff management tools like the Recurrency Tariff Manager
• Solution: Leverage third-party software for real-time data and alerts
• Solution: Diversify supplier base to reduce dependency on high-tariff regions
• Strategy: Conduct regular tariff exposure assessments
• Strategy: Establish contingency plans for sourcing and logistics
• Strategy: Collaborate closely with trade compliance experts and consultants

The Tariff Challenge: Limited Visibility, High Stakes

Tariff exposure often hides in plain sight. Vendor records might show countries of origin or product categories, but few ERP systems offer a clean, consolidated view of which suppliers are likely to be impacted by new tariffs — and what those impacts could mean financially.

Procurement and finance teams are often left piecing together spreadsheets, customs data, and supplier intel to make urgent decisions. And by the time a potential risk becomes clear, the cost implications may already be felt.

Oversight, Strategy, and Control: Three Ways to Get Ahead of Tariff Risk

1) Invest in Strategic Supplier Diversity

By diversifying your supplier base across multiple countries or regions, you reduce reliance on any one source that may become tariffed. Your ERP system should help track and categorize suppliers by region, and your team should regularly audit where your critical parts or products are coming from.

2) Improve Cross-Functional Visibility

Tariff risk isn’t just a procurement issue — it touches pricing, forecasting, inventory, and even customer experience. Integrating trade visibility into dashboards accessible to operations and finance leadership is key. This means making tariff exposure a regular part of your supply chain reporting, not a fire drill when changes hit.

3) Use Purpose-Built Tools for Trade Risk Management

Rather than rely solely on generic ERP reports, modern distributors are turning to specialized tools that augment their ERP environment. These tools often bring in external data, enrich vendor records with AI insights, and suggest actionable strategies like pre-purchasing inventory or temporarily shifting pricing models.

If you use Epicor Prophet 21, there’s a new solution available that may be worth exploring: the Recurrency Tariff Manager.

This lightweight dashboard plugs directly into your P21 system and uses AI to analyze your vendor list for likely tariff exposure. In under 15 minutes, it can show you where you’re at risk — and help you take action, whether that means sourcing alternatives, adjusting purchasing, or planning pricing changes.

It’s a smart way to bring clarity into a complex challenge — without requiring months of development or a full system overhaul.

Managing tariff risk isn’t just about compliance or cost control. It’s about building resilience into your operations — so that when change comes, you’re prepared. By improving visibility, sharing insights across teams, and using the right tools, you can turn tariff challenges into strategic opportunities.

If you don’t want to explore things like how to manage tariff risk in distribution ERP without industry experts helping you the mitigate risks, our team at EstesGroup is always available to help you make sense of your data and identify the right tools for your ERP and business strategy.