How do you plan for your company’s future when the only thing that feels certain is uncertainty? That’s what distributors face in today’s volatile tariff environment. Economic fluctuations, supply chain disruptions, and shifting customer expectations make it difficult for distributors to plan with confidence. Unfortunately, waiting for stability isn’t an option.
Whether passing costs down the supply chain, reassessing pricing models, or rethinking strategy to protect margins, distributors must exercise agility to respond to whatever comes next. Distributors that thrive are those who act swiftly, build resilience into operations, and leverage tools that enable scenario planning, rapid adjustments, and smarter decision-making.
The Challenges Distributors Face
The timeline and status for tariffs enacted under the International Emergency Economic Powers Act (IEEPA) continue to fluctuate. This leads to ripples through the entire distribution ecosystem, including:
- Cost volatility: Sudden increases in material costs can shrink margins overnight.
- Supply chain disruption: Vendors may shift sourcing strategies, creating longer lead times or limited availability.
- Pricing complexity: Constantly changing costs make it harder to quote accurately and maintain customer trust.
- Forecasting uncertainty: Traditional planning methods often fail when markets shift rapidly.
Many distributors who adjusted their strategies after the initial tariff announcements needed to reset when they were paused and then resumed. This flip-flopping and uncertainty make traditional "steady-state" planning obsolete. Flexibility and agility are the way forward.
Building a Resilient Planning Framework
Distributors can’t control tariffs or geopolitical events; they can control how prepared they are to respond. When faced with a situation you know will squeeze your margins, what do you do? What’s your strategy?
Leadership and the C suite want answers. Without understanding your options and where you’re at risk, decision-making in this environment might resemble a game of “Whac-A-Mole.”
A resilient planning framework includes:
- Scenario planning: Model the impact of tariff changes, shipping delays, or supplier price increases to see how they affect margins and service levels.
- Data visibility: Ensure your team has real-time access to sales, inventory, and supplier data to make faster, informed decisions.
- Flexible pricing strategies: Automate price updates to reflect changes in costs without delaying quotes or risking errors.
In the current reality, distributors are getting hit from all sides. They don’t have the luxury to focus on one issue, because every pressure has comparable high stakes.
How Technology Makes Distributors Agile
Modern ERP and cloud platforms, like Microsoft Dynamics 365 Business Central, empower distributors to stay agile, resilient, and competitive.
Technology gives a crucial helping hand to tackle issues even when they shift. Rather than responding in broad strokes, technology enables insights that provide precision. By applying AI to analyze customer segments, purchase history, and market fluctuations, a distributor can create nuanced pricing strategies. For instance, offering more competitive pricing on high-volume electrical components for contractors while maintaining premium margins on specialty parts ordered infrequently.
In addition, Microsoft Dynamics 365 Business Central and tools like it:
- Deliver real-time financial and operational visibility so leaders can spot risks sooner.
- Enable predictive analytics and forecasting to model the impact of cost changes and tariffs on profitability.
- Offer AI functionality, like Copilot in Business Central, to run different scenarios and “what-if” simulations to help distributors determine the best path forward.
- Automate workflows and pricing updates so teams can respond quickly without adding administrative overhead.
- Streamline real-time business intelligence, like Power BI, by taking data from all different sources and making it easy to understand and consume through dashboards and reports.
- Integrate with CRMs such as Dynamics 365 CRM and other tools for a fully connected system to deliver maximum visibility.
By connecting data across finance, sales, inventory, and procurement, distributors gain the agility to adjust plans on the fly and protect margins even when external pressures mount.
The Better Time to Update Your Technology Stack
There’s never a perfect time to update your technology; however, there are better times than others. Every day you postpone important technological upgrades, it’s another day you’re losing ground on the competition, risking errors, and doing a lot of manual workarounds.
If you’re still using a lot of Excel, it’s likely time to upgrade. If you’re not taking advantage of the automation that is available with technology, it’s time to upgrade. Not having the latest technology available to you during turbulent times puts you at a disadvantage.
Moving Forward with Confidence
Tariffs and global uncertainty aren’t going away. The distributors that succeed in this environment will be those who embrace digital tools and modern planning strategies to build resilience with the right technology partner. With scenario planning, real-time data visibility, and intelligent automation, distributors can protect profitability, strengthen customer relationships, and turn uncertainly into opportunity.
At Enavate, we will partner with distributors to ensure you’re creating a plan and timetable that works for your business. Contact our expert team today to learn more about how we can help you modernize your operations and create a roadmap for growth.
