Inventory Management to Meet Consumer Needs Amid Market Chaos

It feels like so much has changed since the start of 2025. Tariffs policies have been threatened, put into action, scaled up and then pared back. Some international manufacturing companies have received an influx of orders while others have stopped taking on American clients.

Shipping ports have seen a pandemic-level decline in imports and supply chains around the world are managing daily uncertainty. In fact, the Port of Los Angeles – the busiest port in North America – reported a 30 percent import decline during the last week of May when compared to the same timeframe in 2024. Amidst all this, consumers are left wondering if they should buy now or wait for a dip in prices, and small businesses are trying to hang in the balance. It’s a rollercoaster ride we’d all like to disembark.

The good news is that there are actionable steps businesses can take to mitigate risk and successfully navigate market fluctuations. Implementing technology that allows for a connected view of business operations is the starting point for many. While there are several software options that support businesses of all sizes, small businesses should consider choosing a cloud-based inventory software that allows them not only the visibility they need to make informed decisions but enables them to integrate applications already in use. Systems tailored to the needs of small businesses can eliminate the features that do not apply to smaller operations, thus allowing them to focus on getting products to customers faster regardless of external headwinds.

Combating volatility with inventory management

Tariffs have been contributing to market chaos for small and medium-sized businesses (SMBs) since the end of 2024 – before businesses knew what the new retail policies would entail. In fact, data from Katana Cloud Inventory shows that cost of goods sold (COGS) had a drastic increase, up by 103 percent, at the end of Q4 2024. More recently, the same dataset shows global volatility in action, as many SMBs depend on overseas procurement. When comparing last year’s average unit price to now, we can see a nearly 30 percent increase. Even larger retailers are concerned. Recently, Walmart’s CEO said that the retailer would probably not be able to absorb all the pressure from tariffs.

With inventory at the heart of so many businesses, it’s critically important to have smart systems in place to help accurately manage stock. Cloud-based inventory management allows for real-time insights on all items so that businesses can optimize supply chains and adjust inventory levels based on demand. It helps to avoid overstocking or stockouts, which can be detrimental to SMBs who need to sell their products to stay afloat. A connected system also enables purchase, sales order and production management for a holistic view of operations. With critical information in sync, SMBs can ensure accurate stock levels, on-time deliveries and remain resilient in the face of uncertainty.

Data-driven forecasting to meet consumer demand

While change is constant, technology can help keep the business steady. To this end, data-driven planning and forecasting is critically important, and choosing a system that can help you pull historical data to predict future trends offers flexible inventory management and the opportunity to practice smart replacement planning. End-to-end visibility and real-time insights allow business owners to make informed decisions about procurement, order fulfillment, supplier management or adjusting costs.

As consumer demand continues to shift, businesses may need to compare month over month instead of year over year, or they may need to factor in the impact of tariff costs on purchases starting after a certain date. Regardless of situational need, managing inventory with insights that help you predict consumer demand and avoid costly delays can help the business maintain cash flow. Total inventory control allows SMBs to maximize resources, alleviate some of the uncertainty in today’s marketplace, and keep customers happy with in-stock products at the right time.

Proactivity in practice

Small businesses that plan ahead are going to be the most successful during times of market volatility. For example, you don’t want to be dependent on a single supplier when supply chain disruptions strike. SMBs that proactively look to diversify their supply base – whether that’s exploring partnerships in new regions or bringing manufacturing closer to home – will be ready if and when a crisis strikes. A connected, cloud-based inventory management system can help you keep track of supplier information with all data in one central location. SMBs that optimize suppliers for efficiency will be able to protect their bottom line in turbulent times.

Some businesses, especially those that have historically operated as a brick and mortar, may want to create an omnichannel experience in times of change. Centralizing sales channels and inventory management offers total visibility across locations so that SMBs can remain agile with live operational insights. Other businesses may look to implement dynamic pricing strategies to help them maintain margins when unit costs fluctuate. Regardless of the overarching business strategy, implementing technology that allows for a real-time view of business performance is the key to success.

Author: Ben Hussey is the co-CEO of Katana Cloud Inventory, an inventory management platform that helps companies manage over $3 billion in sales annually. Ben has led many successful sales and revenue teams, helping businesses enhance their e-commerce, manufacturing, inventory, and order management capabilities while delivering amazing customer experiences. In addition to these roles, Ben spent a decade working for a large telecommunications company, leading commerce initiatives of varying sizes and types — from initiation to delivery and run-time. He’s passionate about the impact software can have on a business and working with high-performing teams to deliver results.