Proactively Managing Pricing Strategy in a Shifting Market

The past few weeks have seen significant developments in trade policy, with new tariffs taking effect and rapid shifts in their enforcement. On February 1, 2025, the administration implemented a 25% tariff on imports from Mexico and Canada (10% on energy resources) and a 10% tariff on imports from China (Source: whitehouse.gov). Within days— and in Mexico’s case, hours—some of these tariffs were put on hold. While uncertainty remains, you can take proactive steps now to manage your pricing strategy and navigate potential cost fluctuations.

A well-informed pricing strategy is critical for manufacturers navigating supply chain complexities, rising costs, and customer expectations. By evaluating key factors—such as inventory pricing, supplier relationships, and cost forecasts—you can build a proactive approach that strengthens profitability and operational stability.

1. Assess Backlog and Order Fulfillment

During times of pricing volatility, it is essential to understand how shifting trends impact your inventory decisions. With cost volatility, manufacturers must strategically decide when to hold or sell inventory. A thorough backlog assessment helps determine the best approach for fulfilling orders while maximizing margins and avoiding disruptions.

2. Refine Sourcing and Pricing Strategy

Supplier agreements and cost forecasts play a vital role in maintaining financial stability. By evaluating vendor contracts and anticipated cost increases, manufacturers can identify opportunities to renegotiate terms, adjust sourcing strategies, and mitigate pricing volatility. Additionally, segmenting pricing adjustments by business unit, customer tier, and other factors ensures a more targeted and effective approach to communicating changes.

3. Develop a Clear Communication Strategy

Predictability in pricing requires a strong communication plan—both internally and externally. Adjusting financial forecasts to reflect price fluctuations helps manage expectations and enhances decision-making. Manufacturers should also establish a structured approach to communicating pricing changes with customers and suppliers, maintaining transparency while reinforcing long-term business relationships.

By taking a proactive stance, manufacturers can better navigate cost fluctuations, supplier challenges, and customer expectations—ensuring stability and sustained profitability in a changing market.

Your business does not have to navigate these pricing challenges alone. With our deep experience in supply chain analysis, pricing strategy, and financial forecasting, we’ve helped businesses like yours build proactive plans that drive profitability and operational stability. If you’re looking for expert guidance in assessing costs, refining your pricing approach, or developing a strong communication strategy, we’re here to help. Connect with us to learn how we can support your business in making informed, strategic decisions.