DDI ERP Software Keeps Plumbing Businesses Dry When Tariffs Cause Leaks

On-today, off-tomorrow tariffs, with seemingly ever-changing rates, have driven distribution businesses into a frenzy attempting to anticipate and adjust to the whiplash. It’s impossible to keep it all straight on paper, much less in your head! Regardless of how easy or difficult tariffs are to understand and track, they are undoubtedly going to affect your distribution business in some capacity, whether it be the rising cost of goods, increased shipping rates, or simply just the price of keeping your business’ bathroom stocked with toilet paper.

Let’s take the plumbing industry, for instance. No matter the current economic climate, plumbers are almost always in demand. Someone’s got to clear those pipes, right? Even with a near-constant need for plumbing services & parts, tariffs will affect how businesses procure and ship parts and equipment. So, what can DDI ERP Software to help your Plumbing business mitigate the effects?

Tariffs Pushing Prices Around?

The most noticeable impact so far has been on prices. Regardless of whether the product packaging says “Made in America,” it is very likely that more than a few of the raw materials were imported from another country. Many items frequently used by plumbers, such as pipes, bolt fasteners, and cutters, are made of materials like brass, copper, steel, and a variety of plastics, which are often brought in from countries like China and Mexico and therefore, pose a high risk of being affected by increased tariff rates. These materials are critical to the plumbing industry, so how do you as a distributor mitigate their price increases and possible shortages? Screening your inventory could take weeks – too long when the environment changes by the day.

With cutting edge ERP software like DDI, you can easily manage the products in your catalog that will be most affected. DDI lets you filter items by dozens of industry specific conditions, or via custom field options. Should the tariff rates from China, for example, increase today, you’ll have no problem quickly pinpointing exactly what will be affected so you can adjust their prices, product info, and inventory status accordingly. Likewise, should a supplier’s country of origin become too expensive or unstable, you’ll have an easier time going through your inventory to seek out and then compare domestic or tariff-free alternatives.

Tariffs Causing Inventory Issues?

Speaking of inventory, as we’ve seen during periods of uncertainty or emergency, people tend to stock up on things, while other goods, no longer absolute necessities, can sit on the shelves for months. Stockouts and deadstock can absolutely throw a wrench into your inventory. The 2020 pandemic is a good recent model to use as supply chain issues, price spikes, and panic buying impacted everything from fittings to fixtures to toilet paper. You can be prepared and stay ahead of the curve, though, with ERP software designed to manage your inventory levels and make sure you have exactly what you need, when you need it.

Learn from the past and avoid overbuying. DDI’s forecasting modules can calculate the appropriate amount you need based on elements like recurring demand or seasonal averages. This will allow you to pre-order and stock up strategically on certain items while waiting to re-order other products with less of a current demand.

Tariffs Driving Distribution Disruptions?

Price increases and inventory shortages, among other things, can have major impacts on your relationships with your customers. Even long-time, loyal clients will feel the pressure of increased tariffs, as new costs of raw materials, shipping, and simply running a business will be passed down to them. While some will simply grit their teeth and bear the brunt, other patrons may push against back-ups and higher prices. Or they may just simply dump you – nothing personal. Like you, your customers are feeling the overall economic sting from other affected areas, unrelated to your business. So how do you continue to run your business without leaking customers, not to mention keeping them happy?

DDI ERP software provides user-friendly platforms for both you and your customers, whether the sale is in person at a counter or via your web or mobile store. 24/7 web access with real-time product availability and pricing means transparency. You can even add in the tariff markup, so your clients are completely aware. You and your sales team will have access to the same info, which can help you determine unique pricing structures such as loyalty incentives, or reduced rates on bulk orders on an individual basis to keep your customers engaged and loyal.

Turn to DDI to plug these leaks

Even though raised tariff rates will result in higher prices trickling down from raw materials to inventory control, DDI ERP software has got your plumbing distribution business’ back to avoid wasting finances and inventory, while maintaining a loyal and hopefully happy customer base.

Want to learn more? Check out this DDI Case Study below!