Brands warn that tariff-induced inventory shortages are just weeks away
For the past 20 years, Chuck Gregorich has sold China-made fire pits, patio furniture and hammocks online through his business Net Health Shops LLC. But this spring, he’s bracing for a disruption unlike any he’s seen since the pandemic: a prolonged stretch of inventory gaps.
Normally, Gregorich would bring in 20 containers a month this time of year. But over the next four months, he said he expects to receive only 25% of his typical inventory when his business should be ramping up for the back half of the year. He’s now anticipating potential out-of-stock issues across large parts of his catalog as early as mid-summer.
The holiday season is looking bleak, too. That’s because tariffs have forced the company to abandon Chinese manufacturers without finding adequate replacement factories in time for holiday production. “Our Christmas will probably be down about 50% this year,” said Gregorich, whose Eau Claire, Wisconsin-based business sells products on Amazon, Walmart and other online marketplaces. “We’re so late into the season, most of those factories are booked for the holidays already.”
Like many other importers that manufacture in China, where 75% of his goods come from, Gregorich paused incoming shipments in recent weeks to avoid getting hit with a 145% tax. And he doesn’t plan to order or ship any additional inventory from China for the coming weeks. For now, he’s only shipping the bare minimum from factories in India and Vietnam.
The steep levy has created a catch-22 for online sellers across platforms like Amazon, Walmart.com and their own direct-to-consumer websites: either absorb massive losses or raise prices and risk losing sales. Now, with no policy relief in sight, a dozen brands who spoke to Modern Retail for this story say they expect to run out of stock on some goods by late summer. Even if tariffs were lifted tomorrow, sellers say it would still take at least 30-60 days for new inventory to reach U.S. warehouses.
Container bookings have dropped at nearly all major U.S. ports since Trump’s tariffs took effect, according to Vizion data reported by CNBC, extending a broader export slowdown that began in January. Imports from China, in particular, have plummeted since last month, with the Port of Los Angeles, the busiest port in the U.S., reporting a 35% decline from the same period last year.
The steep decline in shipments from China has gone largely unnoticed by U.S. consumers so far, but that’s about to change.
“Consumers will really notice that something is happening in about six to seven weeks,” said Patrick Penfield, a professor of supply chain practice at Syracuse University. “You’ll see less goods on the shelves, you’ll see prices start to go up.”
Independent merchants like Gregorich provide about 60% of all products sold on Amazon. When asked to what extent Amazon is expecting stockouts in the coming weeks, a company spokesperson said in a statement to Modern Retail, “We’re working with our broad, varied range of valued selling partners in our store to support them in adapting to the evolving environment while maintaining broad selection and low prices for customers.”
Walmart did not respond to a request for comment.
Tariff shock sets in
Aaron Rubin, who sells martial arts gear online, said 35% of his product line comes from China — primarily rash guards and jiu-jitsu mats that have no viable alternative sources. He stopped placing China orders the day the tariffs went into effect. “I’ll start selling out in July,” he said. “By back-to-school, I’ll be out of entire classes of goods.” One of those categories, home rollout mats, generates roughly $250,000 a year in revenue. “That line of business will just disappear,” he said.
Even if a trade deal between the U.S. and China is reached, the damage to the supply chain is already done. “Once you stop the product flow, you can’t recover quickly because stuff on these container ships usually take roughly 30 days to get here,” Penfield said. “Any disruption or stoppage is going to cause a supply hole where there’s just no product for companies to actually get and sell.”
Indeed, many merchants gambled that the 145% tariff would be short-lived. Brandon Fishman, CEO of Prime Team Agency, an Amazon consulting agency that works with about 60 sellers, said at least half of his clients are concerned about going out of stock because of tariff-related disruptions, with many holding off on ordering inventory because they don’t want to get hit with the massive tariff costs.
Trump recently suggested the rate on Chinese imports could fall to 80% — but that’s still far too high for many merchants. “I cannot import at that rate and make a profit without 30–40% price increases,” Gregorich said. “The market will not take this kind of increase.”
An online merchant selling home and outdoor goods, who requested anonymity to speak candidly about private business matters, said their team is weeks away from running out of one of their bestsellers: a sleeping cot made in China. The company canceled its most recent China order and is transitioning production to Vietnam — but that won’t be ready until later this year. “We have about 10% of our stock left,” the person said. “We will be running out this summer.”
Others are already facing stockouts. Alexandra Fine, CEO of Dame Products, a sexual wellness brand, said her company went out of stock on two colors of its Eva vibrator earlier this month after pausing imports for several weeks. Those goods won’t be replenished until mid-June.
Allen Walton, founder of electronics brand SpyGuy, said he has about 30 days of inventory left. His next batch of finished goods is sitting in China, ready to ship — but he’s been holding out.
“We figured everything would get sorted out in a week or two,” he said. “But it hasn’t. And once [our U.S. inventory] is gone, we’ve got to make a decision: eat the tariff or stop selling.”
Even brands with relatively strong inventory positions are feeling the squeeze. FlutterHabit, a lash brand that manufactures 95% of its goods in China, is not facing stockouts yet, but it’s bracing for delays.
“Things that would typically be a 90-day turnaround, we’re now looking closer to 120 days,” said Kate Soueid, the company’s marketing director. “Where we would typically order in excess or order more to make sure we have more than plenty, we’re being strategic about the quantity we’re placing.”
Brandon Fuhrmann, who sells kitchen products online, said he has about 75 days of inventory left on key items. But some goods are already sitting in China, and he’ll soon have to decide whether to ship them in and take the tariff hit.
“In a normal world, I would have sent this stuff already,” he said. “But right now, I’m trying to wait it out.”