Taxed and Confused: Making Sense of Tariffs

Summary

The recent webinar by Cin7, "Taxed and Confused: Making Sense of Tariffs," offered attendees an insightful discussion on the current landscape of tariffs and their impact on businesses. With key speakers like Josh Fischer, Dimmitri Khan, Matt Lynn, and Patrick Fritz, attendees had the chance to engage with industry veterans providing clarity on tariffs and offering strategic advice for navigating this challenging time. The session included polls to gauge participants' current situations and concerns, and the panel addressed questions relating to cost recalculations, modeling impacts, and leveraging automation. Ultimately, the webinar aimed to leave business leaders feeling more equipped to tackle tariffs through efficient resource management and strategic pivoting.

Highlights

• Patrick Fritz explains the recent 90-day pause on tariffs affecting imports from China and Hong Kong into the US. ⏳
• Panel emphasizes the importance of understanding cost of goods sold (COGS) and landed costs in light of tariff changes. 💼
• Dimmitri Khan discusses the significance of automating backend processes to mitigate operational challenges. 🤝
• Matt Lynn outlines strategies for financial modeling to predict business impacts of tariff fluctuations. 💡
• Participants are encouraged to view current challenges as opportunities for strengthening supplier relationships and enhancing business resilience. 🌍

Key Takeaways

• Leverage automation to streamline operations and remain adaptable. 🤖
• Understand your supply chain variables, like HS codes, for better tariff management. 📦
• Engage with industry experts and peers for insights and support. 👥
• Explore opportunities amid the tariff challenges by reevaluating supplier relations. 🔍
• Stay informed and prepared for potential changes with proactive modeling and forecasting. 📈

Overview

This Cin7 webinar delved into the intricacies of tariffs and their implications for global trade, particularly for small to medium-sized businesses. The session was headlined by industry experts such as Josh Fischer from Cin7, Dimmitri Khan of Access Solutions, Matt Lynn from Accountfully, and Patrick Fritz from Avalara. Together, they demystified the complexities surrounding the ongoing tariff issues between major trade powers and educated participants on actionable strategies to effectively navigate them.

A primary focus of the session was understanding and managing tariff-related costs. The panel underscored the importance of accurate data management regarding HS codes, cost of goods sold, and landed costs. Matt Lynn highlighted the necessity of financial modeling for businesses to foresee and cushion the impact of volatile tariff conditions on their operations. Patrick Fritz gave an update on the current status of tariffs and the implications of the recent 90-day suspension of certain tariffs.

Additionally, the webinar shed light on the potential opportunities arising from the tariff turmoil. Businesses are encouraged to view this as a chance to reassess and optimize their supply chains. Dimmitri Khan suggested incrementing automation to alleviate the burdens of tariff management. Attendees were also motivated to maintain a forward-looking approach, leveraging AI and other technological advancements to stay agile and responsive in this evolving economic landscape.

Chapters

• 00:00 - 03:00: Introduction and Speaker Introductions The chapter introduces the live Q&A session titled 'Tax and Confused: Making Sense of Tariffs.' It highlights the presence of a panel of experts ready to engage with the audience. The host kicks off the session by introducing the speakers, starting with Josh Fischer, the Vice President of Product at Sin 7. Josh Fischer has over 20 years of experience in e-commerce and is noted for his strategic focus on modern commerce and development of e-commerce tools and back office features.
• 03:00 - 06:00: Poll Questions and Audience Engagement The chapter titled 'Poll Questions and Audience Engagement' includes an introduction to the facilitators of the session. The primary facilitator is Josh, who will manage the questions. Dimmitri Khan, founder of Access Solutions, is introduced as an expert in digital solution architecture with 18 years of experience. His expertise spans across e-commerce, digital transformation, and systems integrations. Access Solutions is presented as a partner of Sin7, assisting businesses in scaling their operations.
• 06:00 - 12:00: Current Tariff Situation and History The chapter titled 'Current Tariff Situation and History' introduces consulting services and strategic approaches offered to businesses, particularly focusing on agile software development teams. It highlights the role of Matt Lynn, a senior inventory specialist at Accountfully, who utilizes his expertise in inventory systems and operations to support growing businesses. Accountfully, a Sin7 partner, is noted as a U.S.-based accounting firm that aids in streamlining bookkeeping, taxes, and inventory for expanding businesses.
• 12:00 - 19:00: Understanding Tariffs, HS Codes, and Tariff Engineering The chapter introduces Patrick Fritz, a seasoned expert in global trade and supply chain management. Patrick works at Avalara and is dedicated to helping businesses navigate the complexities of international trade by simplifying tax compliance through automated tools. With over 20 years of experience across regions including AMIA, APAC, and North America, he is committed to reducing cross-border challenges for companies of all sizes.
• 19:00 - 29:00: Business Impact and Financial Modeling In the chapter titled 'Business Impact and Financial Modeling,' Avalara, a SIM7 partner, is discussed in the context of helping businesses maintain tax compliance. Avalara achieves this by automating sales tax calculations, filing, and reporting across more than 90 countries, all integrated into the businesses' existing systems. Additionally, the chapter introduces the use of polls aimed at gauging the audience's opinions and current positioning, which will assist the panelists in understanding the audience better.
• 29:00 - 36:00: Automation and Digital Transformation The chapter begins with a brief introduction to the global audience attending a call or webinar, as a poll is conducted to ascertain the geographical locations of participants. The speaker expresses gratitude and excitement for the large attendance and notes the significant number of people online, with an observation that aligns with expectations given the time of day. However, the chapter largely focuses on the context of automation and digital transformation, setting the stage for discussion around how these topics influence various sectors and the global workforce.
• 36:00 - 43:00: Opportunities Amid Tariff Challenges The chapter discusses the topic of supplier switching due to the challenges posed by tariffs. It specifically notes the geographic distribution of participants, mentioning North America, Europe, and Asia Pacific. A poll is introduced to gauge whether the audience is considering changing suppliers due to increased duties or delays.
• 43:00 - 49:30: Resources and Tools The chapter 'Resources and Tools' discusses the excitement and efficiency of obtaining real-time insights, emphasizing the wish to constantly have a large group of people ready to provide input. It also highlights the divided opinions among participants regarding supplier switching concerns and hints at the forthcoming topics that will be beneficial for future discussions.
• 49:30 - 47:00: Q&A and Closing Remarks The chapter titled 'Q&A and Closing Remarks' discusses the current challenges and uncertainties surrounding cost calculations in the context of tariff changes. Many audience members are unsure about their current cost of goods sold (cogs) and margins, which is acknowledged as common and acceptable. The aim of the discussion appears to be to address these uncertainties and provide clarity on these financial figures.

Taxed and Confused: Making Sense of Tariffs Transcription

• 00:00 - 00:30 So, first of all, thanks again everybody. This is Tax and Confused, making sense of tariffs. Um, this is going to be a live Q&A. We've got a great panel of experts for you today. So, I'm going to start and get everything going. First, I'm going to talk about today's speakers. So, first we have Josh Fischer. He's the VP of product here at Sin 7. Um he's been leading product strategy with a very sharp focus on modern com commerce drawing on 20 years over 20 years of experience building e-commerce tools back office features
• 00:30 - 01:00 and supply chain solutions. He's going to be your facilitator today. So any questions that come through Josh will make sure to field those. Next up we've got Dimmitri Khan. Uh Dimmitri is the founder at Access Solutions, one of Sin7's partners. uh he is a digital solution architect with 18 years of experience in B2B and BTOC environments. He's an expert in e-commerce, digital transformation and systems integrations. And then I just want to give you a little information about access solutions. Uh they help businesses scale
• 01:00 - 01:30 up by providing them with consulting services, strategic approaches, and agile software development teams. Then we've got Matt Lynn. Uh Matt is a senior inventory specialist at accountfully where he leverages his expertise in inventory systems and operations to support growing businesses. And then again, account is another Sin7 partner and a US-based accounting firm that helps growing businesses streamline bookkeeping, taxes, and inventory
• 01:30 - 02:00 operations. And then we've got Patrick Fritz. Uh Patrick is uh in charge of global trade at Avalara. He helps businesses sell globally by creating automated tools that simplify tax compliance. He has over 20 years of experience in global trade and customer and customs across AMIA, APAC, and North America. And he's a supply chain expert on a mission to cut through crossborder red tape for companies of all sizes. Patrick, I know you gave me that bio, but that is well said. Um he again works
• 02:00 - 02:30 for Avalara, another SIM7 partner, and they help businesses stay tax compliant by automating sales tax calculations, filing and reporting across 90 over 90 countries right from their existing systems. So having said all that, I am going to go ahead and get us started with some polls. Um, these polls are just meant to help our uh, panelists best understand where you're at, what your feelings are, where your head's at
• 02:30 - 03:00 as it's associated with terrace. So, the first one, where are you in the world? Can you tell us where you're located? The poll should have popped up on your screen. Go ahead and take a second. Give you one more minute to get that filled out. Lots of you on the call. Really happy you're here. All right. No surprise due to the time of day, but we have a lot of you in
• 03:00 - 03:30 North America. We've got some in Europe and Asia Pacific. Fantastic. I'm going to go ahead and launch another poll. The next one is about supplier switching concerns. So, can you tell us, are you considering changing suppliers because of higher duties or delays? Go ahead and take a second.
• 03:30 - 04:00 Man, this is so neat. It's fast. Real time. Lots of answers. I wish we could just do this all the time. We just need a group of thousands of people that are willing and ready to give us insight. Yeah. All right, it looks almost 50/50 on this one. Uh, pretty split crowd in terms of supplier switching concerns. Just a few more. I promise this will be very helpful as we move forward. So, our next one is about
• 04:00 - 04:30 manual cost recalculations. Do you know what your current cogs and margins are with the current tariff changes? And the answer can be no. And that's totally fine. That's what we're here to talk about. All right. It looks like a lot of you aren't really sure and that's totally fine and and we'll get into that
• 04:30 - 05:00 today. Next, it's about tariff impact analysis. Could you quickly model how an incoming tariff change will affect your cost of goods sold and customer pricing? Could be yes, could be no, could be you don't even know where to start. And that would be fine,
• 05:00 - 05:30 too. Amazing. It looks like a lot of you are comfortable and familiar with this. So, great to know. And then our last one, I told you where there wasn't that many. Bulk updates under pressure. Have you recently had to change prices to keep up with your changing costs due to [Music] tariffs?
• 05:30 - 06:00 Amazing. So, it looks like a lot of you have and that's good for us to know um and just to have a good understanding. So, now that I've gone through all of that, your quiz is over, I promise. I'm going to go ahead and hand this over to Josh. But just so you have a good understanding today, we're going to talk about what's hitting your bottom line. Um we're going to talk about where SMBs typically get stuck and how Sin7 can maybe help you pivot faster. and then we'll talk about how to plan ahead with tools, tactics, and smarter supply chain
• 06:00 - 06:30 moves. So Josh, I'm going to hand it over to you. Um, I think we're going to talk a little bit about the current landscape of things, and then we'll dive into some questions. Great. Thank you, Lauren. Uh, first of all, I just want to thank you guys for joining us today. Um, and I want to thank Matt, Patrick, and Dmitri for agreeing to do this. This was, um, very last minute. We reached out to these guys. Obviously, you know, I heard 20 years of experience over and over again. These guys have been in the business for a long time and um have a
• 06:30 - 07:00 lot of experience in this space. So hearing uh the details from them, I think I'm our sincere hope is that you take information away from this today that you can um educational information that you can apply to your business to help you through some of these times. So, um, first of all, I think hopefully everybody's, you know, um, uh, heart pressure went down a little bit this week because we had some news. Right before we jumped on, Patrick was giving us an update on some of the timelines
• 07:00 - 07:30 and what this means exactly. And Patrick, that was great information. If you don't mind, could you just share what you shared with us around the timelines and what happened this week that changed things? Sure. So the big change uh Josh was um the 90-day pause imposed on products the the tariffs imposed on products from China and Hong Kong into the US. If you remember a couple of weeks ago there was a a tit fortat escalation between the two giants. You know sort of slugging it
• 07:30 - 08:00 out. Um they were increasing by 10 20 30 40% u it seemed like every day. Um and it got to 145% plus plus for China origin into the US. Um China uh reciprocated and and increase their tariffs as well uh in the other direction. Uh but yes, you're right. 90-day pause came into effect 1 minute past midnight yesterday. So we're on the clock. Uh it doesn't mean to say this is
• 08:00 - 08:30 over. Uh you're right. The blood pressure has gone down. Uh but um but yeah, it's uh it's it's not resolved. uh we we know that and the other let's not forget the other 90-day pause which uh began uh back in um April for the reciprocal tariffs for all other countries uh not China and Hong Kong but all all other countries uh we're we're only we're not even halfway through that 90-day pause. So July the 9th is when
• 08:30 - 09:00 that port the reciprocal tariff pause that is um um is is comes to an end and we're going to have to see where we're standing. Yeah. Yeah. And it's hard to tell what's going to happen between now and then. Um, and everybody's got their fingers crossed, hoping for the best. But, you know, I'm sure everybody here has seen I've seen plenty of Reddit posts where people are, um, you know, getting their invoices from items that they've brought in from China and the increases that they're already seeing in these spurts of time. It's obviously
• 09:00 - 09:30 having an impact on business. So, so Patrick, while we're on this line, can you kind of help help us understand like how did we get here? Well, it really started at the beginning of the year, Josh, um when the uh uh current uh US administration uh declared war on fentinel um and uh counterfeit goods uh coming into the country. Um so the response by the early February by the US administration was to increase
• 09:30 - 10:00 tariffs uh to control this flow. Um and uh we had if you remember uh we had uh liberation day on the 2nd of April where the reciprocal tariffs were declared. Uh prior to that we even had Canada retaliating on some US origin products going over the border going north into Canada. Uh so there was a variety of different responses by different countries around the world. Um and then of course as I just mentioned a few moments ago there was the the
• 10:00 - 10:30 heavyweight uh contest between China and the US as they increase that the tariffs between the two countries. Uh and we've culminated uh today uh we're in this 90-day pause uh for both rest of the world and uh China and um Hong Kong. Yeah. But okay, but tariffs have actually been around forever, right? It's just the fact that this we're we're experiencing a spike. Is that is that correct? May maybe you can just tell us a little bit about exactly what tariffs
• 10:30 - 11:00 are. And Sure. They've been around uh you're right, they've been around centuries. Um and it's basically um a way for it's a number of things, but governments use it to u mostly to protect domestic market, domestic industry. So uh to prevent foreign goods flooding the country uh and putting out of work uh the individuals within that country. So uh tariffs were put in place when a when a product enters a country
• 11:00 - 11:30 uh it is assessed and the duty is then determined and must be paid to the government uh before it's allowed to enter the country. But we have not seen anything as disruptive as this in living history. Some people compare it. They said, "Oh, Brexit, we had Brexit a few years ago. Uh Brexit was nothing compared to this. Brexit was three years in the making. Everybody knew the the the the changes. It was all very very transparent. This is happening. This is like a roller coaster. This is happening
• 11:30 - 12:00 over um a period of weeks and in some case in days. Changes are made from day to day. So uh yeah, we've not seen anything like this in living memory. Yeah. Yeah. That's a really good analogy between this and Brexit. Um, okay. So, this is my last fundamental question for you before we open it up to everybody. Um, you HS codes are incredibly important when it comes to calculating your expected tariffs. I know Aalera, you do a lot of work around HS codes. Can you just help define what HS codes
• 12:00 - 12:30 are and what they mean to merchants? Yeah, harmonized system codes. Uh, basically the HS code is the Rosetta stone of global trade. it ident it's a numeric um uh code which I and the in the case of the US it's 10 digits and it identifies specifically what that product is so whether it's footwear whether it's textbooks whether it's a an engine part it every product has its own HS code and that is um every country is
• 12:30 - 13:00 different that's what makes it confusing uh Bolivia have got 12 digits US as I mentioned 10 digits Japan has nine digits Europe has eight digits it. So, so it becomes very very confusing if you're shipping in and out of uh countries around the world uh because every country has a different code. So, it is inextricably linked to the amount of duty that is paid on that product. So, a HS code could have a duty rate of zero because it's humanitarian uh or or
• 13:00 - 13:30 it's educational uh uh product uh but it could be as high as we saw in the escalations. It could be as high as 145% uh last last week when the escalations uh peaked. So it's it's the Rosetta Stone and it's crucial to know what your HS codes are for your for your product catalogs. Yeah. Okay. So now um for for the folks that are watching the typically small to mediumsiz businesses
• 13:30 - 14:00 um they're selling products obviously they're sourcing goods from around the world. What? Let's just go around the circle, guys. Tell me what kinds of changes um these businesses should expect from um everything that we're talking about around tariffs. What's what's ahead of them? Well, I mean, I think from a, you know, coming at it from a financial or an accounting standpoint, uh, there there's going to be a lot of volatility right now, not just with the tariffs, but with
• 14:00 - 14:30 a lot of people racing to bring in new inventory potentially, you're going to see a lot of volatility in freight rates, too. Increases in freight rates, increases in tariff have a direct impact on the landed cost of goods of these businesses and what they're selling. So what they can expect is to see those landed costs increase, hopefully decrease some over the near future. And it's really just getting an understanding behind that of if my landed cost changes, how does that impact my business? And we're going to
• 14:30 - 15:00 have to see a lot of modeling, a lot of financial projections being ran for people to stay ahead. Understanding if my if tariffs are a certain percentage and my freight goes up, how does that impact the cost of the units I'm selling, my cost of goods? from that understanding what you sell that unit for, getting an idea of your margin, how is that margin impact changing over time. So, we're seeing going to see a lot of rise in people needing to get partners and projections and just understanding how when they're rising and even if they're falling again, how
• 15:00 - 15:30 it's going to be impacting them. Yeah. Yeah. That's um absolutely. And that's, you know, going back to the poll that we took earlier, you know, modeling, um, I think, uh, 25% of the folks on the call, they made the comment they they don't even know where to start. So, help me understand, Matt, if you were going to build out a model to help you forecast the impacts that your business might face, how how do you even do that? Where do you start? Well, you kind of have to start with understanding what it is you're you're buying or you're
• 15:30 - 16:00 producing. Uh it it's a lot simpler if you're buying a single finished product, understanding what is the price I'm paying to that overseas factory to produce that for me. Um it could be a little bit more granular if you're sourcing if you're in a manufacturing operation and you have to source various products from various places around the world. Which of those products exactly are impacted by tariffs? So understanding the cost of your finished good that you're buying from that factory or the components you're buying to put together and then how an
• 16:00 - 16:30 increased tariff is going to increase that cost. If it's a finished good not cost me $10 uh and my tariff rate goes up from $1 per unit to 10. My landed cost of goods is now $20. I've got to take that compare it to how much I sell it for. If I sell it for $30, my margin is now $10 per unit. Can I absorb that into my business? Am I going to need to look to increase my my prices uh and spread that across my consumers? It's going to be some very hard decisions
• 16:30 - 17:00 that have to be made. Yeah, that's rough. Actually, Dimmitri, this this kind of sets you up perfectly. So, Demetri, you have a background in helping businesses with their back office operations and then how that relates to their customerf facing frontends, like the actual sales channels where they're engaging with customers. So what do you see businesses doing when it comes to their um selling motion to their customers? What are they changing that's being driven by some of
• 17:00 - 17:30 these ch these tariff issues? Right now it's all over the place and uh this volatility drives both the price changes, inventory availability, different marketing responses. uh for example um I think 50% of the people in Nepal responded they're considering new suppliers. This is an opportunity uh that's for everyone here. Uh your products need to be discoverable because there are lots of others. If there's 50% of us here considering new
• 17:30 - 18:00 suppliers, probably 50% of people on the market are currently looking for new suppliers as well. If your product's not discoverable, uh then you're not going to be seizing that opportunity. someone else might grab it. So being able to reflect pricing, actual inventory which changes possibly dayto-day as it was mentioned earlier and having to deal with large volumes of data and if you have multiple suppliers you have to consolidate aggregate all across the board that's a
• 18:00 - 18:30 lot of challenges. So some uh businesses are getting overwhelmed. So my recommendation here would be to invest into automation and it doesn't necessarily mean uh putting a significant effort and going all in this. It's making small baby steps just to alleviate the immediate pain. Okay. Okay. So so it sounds like as Patrick pointed out understanding the HS codes of your products incredibly important. Matt you pointed out you know you have to understand your COGS and your and
• 18:30 - 19:00 your um landed costs. Is there like a list of um what I'm looking for are keywords that the listeners can jot down and these are things that they can look into in their own businesses. Is there a list of metrics that you would recommend that they pay close attention to in this time? Yeah, I mean you know some of your large metrics just starting your landed costs. Now what goes into that? Uh one one phrase a lot of people probably hear is FOB the the the free on freight on board cost of the goods. It's what
• 19:00 - 19:30 you're you're actually paying for the item that's coming in. Uh now, those HS codes and those tariff rates are based on that cost. It's not based on the selling cost or the selling price. That seems to be a pretty big misconception that's out in the market. It's actually based on the cost you're paying, not what you're charging your consumer. So, you're going to look at your freight rate per unit, your um your duty or tariff cost per unit, and how that's going to impact. and if you have any other overhead type costs directly that
• 19:30 - 20:00 are going to increase that. So you want to look at your overall unit cost, your overall margin is a huge metric. Uh and then otherwise just your your forecasting your cash flow projections. Uh a lot of CPG or SMBs, you know, they're running pretty tight cash and they're running pretty tight margins. So you want to understand how that impacts so you can plan for it. if we need. Right now, we're in that 90-day pause. Maybe you need to take the cash that you have that you've been saving and buy up
• 20:00 - 20:30 inventory because we're not sure what's going to happen in 90 days if those rates go back to 120 130%. The cost of that just went a lot higher. Uh so really just want to kind of keep a firm grasp on all of that. Okay. And for for everybody that's listening, like when the group talks about modeling, really what that means is just developing a spreadsheet where you have these metrics that that um Matt and and others have shared and you're you're just playing with the numbers like you don't know
• 20:30 - 21:00 what's coming. You just need to forecast some possibilities and see what the end results are going to be. And you just go through multiple different scenarios of what could happen so that you can understand what is potentially going to happen to your business. You know, how is your cash flow going to be impacted? How is your revenue going to be impacted and so on. Um, so that's it. It's it may sound like a very complicated process, but from a business perspective, that's something that is actually relatively easy to do, and once you learn how to do it, you can do it all the time for so
• 21:00 - 21:30 many different um topics. Now, Dimmitri said something that was really interesting. He talked about this as an opportunity to start analyzing the suppliers that you're working with. And it reminds me, a mentor told me years ago when we were going through the housing crisis, I remember him saying, "A crisis is a terrible thing to waste." And basically, this is a very obviously a bad situation. That's why we're all here uh talking about it today. But as business leaders, um you always have to
• 21:30 - 22:00 look for the upside. So I'm I'm curious to hear from everybody like give me some positive things to be optimistic about. What are some upside opportunities that the business leaders here have? Well, I I I would say um I speak to customers just like yourself, Josh. I speak to customers and partners day in day out and the hot topic obviously uh in my line of work is tariffs. So, I'm getting a feel for um what how how businesses are reacting to this and and
• 22:00 - 22:30 to your point seizing it as an opportunity. So um what one anecdote if if you uh will indulge me um it would beauty care beauty care a company here in the US importing uh beauty finished goods uh uh beauty products in from Asia and have made the decision in these last few weeks uh they know the uncertainty they know things are never going to go back to where they were there's going to be tariffs they're going to be in place so they've made that decision to invest in um um equipment manufacturing
• 22:30 - 23:00 equipment here in the US where they will import raw materials from different origins, not just that one that they were having a problem with, that Asian origin they were having a problem with, but from different origins using tariff engineering to keep those u uh tariffs at a minimum and creating jobs and manufacturing here in the US, the finished product for for for sale and distribution. So this has been their opportunity uh to to change their model,
• 23:00 - 23:30 bring bring it back, bring it back to the US first and foremost, but secondly, it gives them the opportunity to spread that risk across other suppliers of these raw materials rather than importing the finished good into the US. So they're already committed and uh and and and that I think that's a good thing. That's a healthy thing for a business to do to look at it um and and say, "Okay, let's change it up." Yeah, I totally agree. Okay, so learning learning how to model out um financials
• 23:30 - 24:00 and forecasting, that's a that's a win. Um being critical of the suppliers that you're relying on today, uh and and then hopefully finding um better suppliers or more cost-effective suppliers, that's a potential win. So, and these are things that businesses probably think about all the time. Unfortunately, their arms being twisted into doing it now, right? So, I guess that's a win. Um, Dimmitri, you you mentioned automations earlier.
• 24:00 - 24:30 So, obviously everybody that's listening there hopefully they'll take this away and now they have some work to do to help them arrange the business. What help me understand, you know, this is this is unplanned work, right? So, you know, from a product perspective, that's how I would look at it. I didn't see this coming and now I have to fit it into my schedule. What are some automations that they can do um to to make their life easier? Uh there is a very wide spectrum depending on where you fit in this digital maturity. Um if
• 24:30 - 25:00 you are really early on, it's almost like uh great god-given opportunity to start doing it finally. It's almost like COVID all over again just for businesses because I know that during COVID lots of people who were working on pen and paper and literally very successful businesses running like that for decades uh had to shift at least to Google Sheets and start doing some things electronically, right? That actually added a significant degree of operational stability. They
• 25:00 - 25:30 actually could start using the remote resources, access to remote staff. they could start hiring remotely because they could start using those digital assets to collaborate. So, we're kind of going through the same thing here. Uh if you're early uh in your digital transformation, maybe it's even things like Zapier. So, there are lots of inexpensive connectors and automation platforms that are really meant for consumers costing sometimes a couple dozen dollars a month uh could go into a
• 25:30 - 26:00 couple hundred dollars a month and they're extremely capable. And now with AI being built into those platforms, you can do really significant uh things just within the platform. If you don't know how to do it, not a problem because there's a whole lot of consultants out there on platforms like Upwork and I'm sure people like Matt, they know how to do it and they can give you that nudge in the right direction. Then you could go up a little bit and if you're already on sin 7 for example, you could start building better uh real time or near
• 26:00 - 26:30 realtime integrations between your multiple systems so that your accounting visibility, your inventory visibility, all of those things are tied together, right? One of the things I heard a story from somebody who had their tariff charges going up like roughly 10 times and that was actually a bone crushing experience for the business. Really hit their margins. So having that visibility, knowing how to prepare for that is crucial, right? So building middleware, which is a fancy term for
• 26:30 - 27:00 basically a little piece of software that sits as a connector in between two different or more platforms and allows you to quickly transform the data and put it from take it from one system, put it into another so that people like Matt again can run those reports. Your CFO, your VP of procurement can have real time visibility. We're running low on stock. we're uh tight on cash, things like that. And uh there is also a little bit of this genie in the bottle with AI, right? Some of the things we're doing
• 27:00 - 27:30 right now, there could be one-time events or they're unpredictable and it only makes sense to automate a recurring need. So if you're not sure if it makes sense to invest into full scale automation, you could use AI to sort of semi-automate it. For example, if you're not an Excel genius, but you need to build a complex uh formula, AI will help you do that just based on the verbal description of what you're trying to do. So consider all of those different opportunities and uh ask for help quite
• 27:30 - 28:00 importantly. Yeah, I I 100% agree. The comment about AI is really relevant. So, like even in the last couple weeks, I've been having a lot of conversations with ChatGpt about this topic and it's it's gotten to the point it's really good at giving you up-to-date news so you can find out exactly what's going on. But then also like and and actually this is a question for everybody like I I didn't know where do you even go to get information? Like obviously you can
• 28:00 - 28:30 watch the news but the news is only going to tell you the headlines and like what you need to understand. like give me the numbers like where do I go to find the HS codes? Where do I go to understand the percentages associated with the different HS codes? Where where are their data sets that are available to merchants? Like what are your favorite sources for this is for anybody? I could start with that and this ties to a question already asked by Allen in the uh Q&A. Um so the the the the place where um where we source our
• 28:30 - 29:00 uh content from is government bulletins uh executive orders um uh uh customs bulletins that are released by by countries and in those bulletins um they they detail the HS codes that are impacted and the subsequent duty that will be applied to those HS codes. Remember, there's 20,000 HS codes, so they're very, very extensive. So, of
• 29:00 - 29:30 course, you could uh read all the executive orders. You could read read all the customs bulletins yourself. Uh you'll probably get into a bit of a muddle because there's a lot of information. Uh but but at Abala, that's what we do. We consume that content and we turn it into software. So you enter your HS codes, you enter your country of origin, you enter your country of destination and we will present to you the accurate duties and tariffs to be paid on that particular product and we update our system. So at 1 minute past midnight when an executive order comes
• 29:30 - 30:00 into an effect here in the US, our content is updated. So it's real time. It all happens in real time. U so those are the two ways. You can uh you can do it yourself by reading all the government releases or uh or you can just use simple software. Yeah. Yeah. The um Okay. So, that's really great to know and I'm sure that you know a smart technically minded person could use AI to try to take their you know if you had a 100,000 uh uh SKUs in your database
• 30:00 - 30:30 like just having the intern fill in the HS codes is a slightly unrealistic task, right? But there's there's probably AI tools that can um help you do that either through manual steps or I I think you know Avalera offers solutions like this that can um fill everything in for you. But I the the root of that um advice is that your your data having your data in your source of truth around all of your products is incredibly
• 30:30 - 31:00 important. And the more prepared people were, let's say back in November, the more prepared they were with appropriate data inside the system about all of their product, the better situation that they're going to be in um right now. Absolutely. Yeah. So, go ahead and prepare yourself for the next one because the, you know, the world's changing mile a minute. Okay. So, let me see if there's any other questions that I Josh, I was just going to bring up there are two questions sitting in the
• 31:00 - 31:30 wing, but I just want to remind everybody if there are other questions, you can go ahead and add them to the Q&A. One question that came up that I think is a good level set and just a good reminder that we are breaking everything down. So, no question is a bad question. Please keep them coming. But one question that came in is what is tariff engineering? Yeah. So tariff engineering is um uh it's been around a while but it's become even more important recently. It's where you as a buyer um where you um you have
• 31:30 - 32:00 a to you have tools um to allow you to investigate uh the products and their HS codes and you can change the country of origin to see the impact that it will have when it arrives into the US. remember all countries there's free trade agreements there's punitive rates there's retaliatory rates there's all of these things going on at the moment so by acquiring that particular HS code that product from Vietnam versus New Zealand
• 32:00 - 32:30 you may get a preferential duty rate a legitimate preferential duty rate so um buyers procurement teams purchasers manufacturers who are importing um raw materials they are using tariff engineering to work out a can I acquire this product from this particular country and b what will be the duty rate what is the relationship between the US and that country and do I get a preferential duty rate therefore
• 32:30 - 33:00 reducing my costs so that is in summary what tariff engineering is right so so Matt and Dmitri you guys work handinhand with um businesses just like the ones that are on this call right now do you guys have examples of mistakes that you're seeing some of these businesses make that we we should advise others to avoid. I mean I I think from a you know overall standpoint uh trying to take everything
• 33:00 - 33:30 on yourself can can be a huge mistake. Um, you know, there are experts, there are consultants in so many fields from the accounting standpoint, pure accounting to financial and cash flow projections and modeling to where may maybe like Demetri said, you're not great at Excel and you want to have somebody bring someone on who can kind of help build that out for you so you have an understanding. Mhm. Um, so I think being afraid to ask for help and from, you know, the accounting standpoint, I I think it's um not
• 33:30 - 34:00 properly accounting for it. Maybe you're not really sure uh and you're kind of doing just cashbased accounting. You're just expensing immediately to your P&L those big tariff charges as they come in. Instead of baking it into the value of your inventory and expensing it over time as you sell those goods, it's going to have an immediate impact to that month when that happens. you're out that cash, your margins are are going to be take a really big hit one month. Uh so it it's just understanding how
• 34:00 - 34:30 everything plays together uh and and finding those that can help you. Just make sure you're on the right path. Yeah, that's that's great. That I 100% agree with that. Ask for help. That's that's the bottom line. whenever you're in this this kind of jam. One one thing that I I learned through talking to customers is, you know, customers pointed out the fact that um if you're doing average cost accounting um basically it's hard to see how your costs are being impacted by these different tariffs. So, um, you know, if
• 34:30 - 35:00 you have a $10 item and that you typically sell at $10 and now there's a t tariff associated with it, that's that's going to increase the cost for you to get that good. If you were typically selling that item at $20, now selling it at $20 may leave you with no or negative margin in some cases. So, you have to be very conscious of what kind of price adjustments you should be making and how that impacts the forecast uh for the future. So, what about you, Demetri? Do you have any good examples?
• 35:00 - 35:30 I'd say u not investing in the data quality. Um talking about data is generally kind of a buzzword. Um a little too abstract, but realistically this is just the raw information that all of your reporting and all of your business decisions is going to be based on. So, this is really a wake-up call because the rapid response uh the ability to make good decisions quickly. Having the optics into what's going on in your business is crucial. So, I see
• 35:30 - 36:00 people kind of uh going on two different u parts of the spectrum. Either not doing anything at all because they're overwhelmed or going allin and a little too quickly. And you can get a little too far ahead of yourself, especially with automation. uh because if we're talking automation, it's not cheap and uh it takes a while to implement but sometimes uh it's being perceived as kind of a magical solution. The reality though is uh automation only does what you're already doing just at a scale and
• 36:00 - 36:30 more efficiently. So you want to start with the business goals in mind and walk backwards. Identify what's going to be the biggest bang for the buck. Also what's going to be the quickest because you don't want to wait for something for six months. um and take a structured logical approach. I know it's difficult, but take a deep breath and plan it out. Yeah, it's great advice. Yeah. The other thing with automations is a lot of times they're replacing um uh tasks that are being completed by humans that are
• 36:30 - 37:00 relatively redundant and monotonous and the there's no human value for that particular task. And yes, it may take time to get the automation working properly and it may be costly to get it up and running. But imagine what you can do with those human resources if you can just let a machine take care of these tasks. Like humans are meant to be the creative ones, the ones that are, you know, building relationships with the market and understanding the products and building relationships with the suppliers and so on. let the humans do that and use these tools that have been
• 37:00 - 37:30 built for the automating automation parts. Okay? As a matter of fact, that's a great opportunity to start paying extra attention to your customers so your salespeople instead of sending out the spreadsheets and taking those midnight emails, right? talk to your customers, call them down, uh speak to your suppliers, potentially figure out a a plan, uh to work, you know, a better, more viable financial model for your relationship. So, people are afraid of
• 37:30 - 38:00 AI. Uh it's a known fact, but reality is AI cannot treat you to steak dinner. And it's the relationships that really matter, the reliability uh of all of those supply chain relationships that are the decision-making factor uh often times. So, it's to be embraced, not to be afraid of. Yeah. Okay, Lauren, I'm I'm afraid of running out of time and not We've got loads of questions coming in at this point and so I would love to to start picking all of your brains. Um, one question that just came in and I
• 38:00 - 38:30 already mentioned um that the question was, "Is there any other webinars or content or any other resources that you would recommend um that this this particular audience watch um or be aware of? Not just exclusively with tariffs, but is there anything specific to inventory or supply that they should be following?" Of course, uh I put in there we're we are going to be sending out an email after this with this recording with other resources from Sin7. Um but I wanted to leave it to all of you. anything else that you would call out um
• 38:30 - 39:00 that's valuable for for our attendees to know? Avala, we do um free of charge. We do a weekly web webinar on Tuesdays. Um and you just have to sign up your name, your company uh details, that this that and the other. And uh we we're we're on air um every Tuesday at 11:00 Eastern, 8:00 a.m. uh Pacific. uh and we run through for 45 minutes the changes that have happened in the last seven days and the implications. So people are you you
• 39:00 - 39:30 folks uh members of the Sin7 uh community are more than welcome to join. That's great. That's great. I'll say Lauren I'll send you the sign up form so you can include it in the posteinar uh dispatch. How about you Demetri and Matt? like do you have any favorite blogs or favorite resources? Um, I love B2B e-commerce association. Um, they're kind of 50/50 split between the practitioners and consultants. Uh,
• 39:30 - 40:00 but there's a lot of good advice and also if you're thinking about automation, it will help you get the perspective of the other side so you can work more efficiently with your consultants. Got it. That's great. Yeah. Honestly, uh, end up looking for podcasts related to it. uh spent a lot of time on on LinkedIn finding that uh at accountfully you know our our CEO and and owner uh kind of helps lead some of those podcasts and talk about that. So really it's just looking at the information online and and kind of
• 40:00 - 40:30 picking and choosing what seems interesting and relevant to listen to. Yeah. You know, recently I found a a it's a YouTube video uh with a retired expert in supply chain management specifically focused on container logics or logistics. And he's talking about all the open- source tools that you can use to see the ships that are leaving China and they're on the way to the US, one of the ports. You can see the information about the ships. And he said that, you
• 40:30 - 41:00 know, right now in the in the news there's a lot of talk about empty ports and um you know the basically there's a lot of fear uh from a consumer's perspective that we're going to run out of retail items. But he he he pointed out if you actually look at the open source data, you can actually see all these ships that are still moving around. It's the typical volatility. Maybe there's a spike or a drop one week, but um it's nothing. And so I've been watching that once a week just to kind of check in and get a pulse on the
• 41:00 - 41:30 the reality of it. And I guess those are open source tools that anybody has access to as well. So you can kind of see the flow of uh goods across the ocean. You know, Lauren, maybe what we should do is after this we should put together a Google doc with a list of resources. We can ping more experts in our community and then we can share that Google doc with um with the audience. Yeah, you'll all be receiving some follow-up emails, but Matt, Patrick, Demetri, I'll reach out to you individually and and Josh, we can figure out any other experts you want to
• 41:30 - 42:00 include and I'm happy to share that with everyone here. Um, I know that we had a 45m minute mark on this webinar, so if you have to drop, totally understood, but there are a couple other questions in here. If the team wants to peek at them, you should have access in the Q&A. Um there are some people who are just looking for um ju just some guidance and and maybe your personal opinion. So as comfortably as you're willing to share um on on this next 90-day reprieve um
• 42:00 - 42:30 how confident are you that it will hold. Um do you have any opinions on that? Well um on that one of course you know safe safe harbor and all the rest of it. This is just an opinion. Um I I don't um have a a a hotline to the White House so I don't know for certain but I would have thought that the rest of the world 90 days uh the one that's um that was announced uh first which expires in July um I would expect that one to hold. Uh too many countries are impacted by that. I will I expect there'll be a rush of
• 42:30 - 43:00 deals done before that expires. So that one I think will hold. um the the US China one, the latest one that started yesterday. Um we're going to have to see how talks go between those two heavy weights. So um you know that one that one um I'm less certain of I suppose in terms of you know will it see the 90 days? Um you know we all hope so. Uh but but anything as we know anything can happen.
• 43:00 - 43:30 Yeah. Yeah. I don't I don't want to get super political, but it's obvious that we're this is being used as a bargaining chip and you know the the world knows that this is going to have a negative impact on the actual citizens and my hope would be that you know this these bargaining chips are just used for power plays and hopefully we can come to some kind of resolution before um you know before these extreme
• 43:30 - 44:00 tariffs get get put into place. I'm not in a panic state, but that's my nature. Um, but I I you know, knowing what's happened over history in the last 8 years, like anything's possible. Yeah, for sure. That might be, and I hate to say this because I do know that there are other questions here. That might be a good way to end this, is just saying anything is possible. And hopefully we can in this conversation prepare you a
• 44:00 - 44:30 little bit for what you should be uh thinking about as we enter even just these next 90 days. Um I do see that we have a fair amount of questions left unanswered. Please understand we see these. We will track these. Um if your question wasn't answered live, we will follow up with you individually. Um and uh Dimmitri, Patrick, Matt, Josh, all share these with all of you. Um, I'll also work on getting all of you a resource list so you can have access to that and anything else that Sin7 can do that Avalara accountfully access
• 44:30 - 45:00 solutions can do. We are in your corner. We know that this is kind of a chaotic feeling time. So, we are here to try and minimize that as much as we can with the power that we have. Um, so having said that, Josh, anybody else? I know you can see the questions before we drop. Is there anything you want to address right now? The only thing I would say is I'm reading the questions now. These are these are great and and relevant questions. So why don't we answer these but answer them publicly. So unless
• 45:00 - 45:30 unless somebody has something that's specific to your business, um let's answer these publicly and just get these answers out to the entire community. And if if you found this helpful today, either those of you in the live webinar or hopefully we're going to post this somewhere that others can get to it. If you found this helpful, tell us because this panel um we we have a lot of experts in our ecosystem and we can keep doing this. If it's beneficial to you based on the questions that are coming
• 45:30 - 46:00 in, it seems beneficial. Um just tell us definitely I'll share this with the resources these questions that are listed so everyone can see these as well. Yeah, I would just encourage anyone if there are outstanding questions or if you're not confident with what's going on, landed cost modeling, please feel free to reach out to to any of us. You know, we would be happy to have those conversations privately, uh, via email, whatever to see if there's a way that your business can be helped and we can help you get a better understanding on how to just
• 46:00 - 46:30 really navigate these times. Yeah, great point. Well, thank you all for being a part of this webinar and uh for everyone asking questions. Again, this is a really relevant topic. We all need to get through this together and talk through this together. So, uh thank you all for being a part of it. Matt, Patrick, Demetri, Josh, thank you so much for talking to this and and helping lead this conversation. Um and we will share all of this with all of you watching
• 46:30 - 47:00 very soon. Um, any other questions? You can please feel free to re email marketingse7.com. If you think of something later today, that will link you directly to me and I'm happy to help you there. Um, but thank you all so much. We really appreciate your time and we will share this all soon. Yeah. Thanks for helping us.