Welcome to Executive Action Items, a Glossy+ member-exclusive series driven by monthly focus groups with subject matter experts. The bi-weekly series offers immediately actionable takeaways for workers navigating the rapidly evolving beauty and fashion industries.
This month, Glossy brought together a group of executives from fashion and beauty to discuss current challenges related to supply chain management. The executives compared notes on topics like navigating tariffs, vetting manufacturing partners, and dealing with the complexity of international shipping and fulfillment. Below is a recap of the discussion segment on tariffs and shipping, which focused on what’s working now and how these executives are planning ahead amid a rapidly shifting global supply chain.
Focus group members:
Jessica Roberti, the chief supply chain officer of the New York-based fashion brand Marcella. Roberti has experience at apparel companies including Alo Yoga and American Eagle Outfitters, overseeing areas like product development, supply chain management and sourcing.
Annie Jackson, the co-founder and CEO of beauty retailer Credo Beauty. Credo Beauty sells products from hundreds of brands and makes its own line of beauty products with a focus on ethical manufacturing practices.
Vicki von Holzhausen, the founder of the material science company Von Holzhausen. Von Holzhausen worked an auto designer before founding her eponymous company, which develops materials like a 100% plant-based plastic. Von Holzhausen also makes its own products, like handbags and other accessories, from its proprietary materials.
Navigating the treacherous waters of international trade
All of the executives participating in the focus group spoke in-depth about the ongoing effects of the Trump administration’s multifront trade war. The constant shifting of the tariffs — which have been announced, delayed and altered several times over the last month — has made for an exhausting few weeks of planning.
Roberti: “I mapped out the different paths we may take based on what the tariffs may actually look like. In one scenario, we’ll do more fulfillment out of Sofia [the capital of Bulgaria where Marcella does its manufacturing], and in the other scenario, we’ll do more fulfillment out of the U.S. If the De Minimis Exemption goes away and tariffs are added, which I’m calling Armageddon, we will pick and pack in Sofia. That’s our plan as of right now. And instead of coming into the U.S. and getting dropped into [the United States Postal Service], the product will go directly to our third-party logistics company in Massachusetts. Because we have a Bulgarian entity and a U.S. entity, it will actually be us selling it to our U.S. entity as a wholesale order and paying duties on it, and then they will put a shipping label on it and fulfill from there. It will probably add a day to processing time.”
Jackson: “For our international brands, we require them to have a 3PL here in the States, because we tried to have our own 3PL do all the duties and taxes for the orders coming in, and it was a complete disaster. It was hard to get product in a timely way. So about three years ago, we instituted that our brands have to have a 3PL here. For our own goods, we have bottles coming from China and our skin care is made in Canada. They’re all getting hit with this. It feels like whack-a-mole trying to figure out exactly what’s going on and what the appropriate response should be. We moved as many bottles over from China as we could afford right after election day.”
Von Holzhausen: “We formulate our materials in Los Angeles, and now we are making everything in Arizona. Shipping is easily one of the biggest costs in the whole operation. It takes so much time to build out these different scenarios and plan around them. So for us, we had two paths we could go down: Do we take a bunch of VC money and try to build our own facilities in the U.S., or do you try and rely on partners? We went the second route because, dealing with factories, there are so many different methods and technologies out there. And for us, if we invested all this time and money to build out our manufacturing, and then you change your mind about how to make something, that’s expensive. It takes time to change anything in your supply chain. It’s a slow process.”
Roberti: “It’s a two-year cycle to move your supply chain. So Trump eased up on some tariffs until April 2, giving you a 30-day window. But you can’t rebuild anything in 30 days. I’m curious about how the consumer will react, because Trump ran [for office with a focus] on bringing the prices down, and now that he’s elected, it’s like, ‘We might go into a recession.’ I’m interested to see how the consumer will react when prices go up.”
Jackson: “We tried to put ourselves in the best possible position by taking in more product ahead of any potential tariffs. Now, we just sit and wait. But, it was costly to do that. And we try to have values, trying not to contribute to the waste of the industry, which means never air shipping for one thing. The hardest part is that you put in all this work to understand what your strategy is going to be, and then the goalposts move. You meet with your team and say, ‘Tariffs are on in China.’ So now you have to figure out what the impact from a cost perspective is and how to respond. You take in a lot of product, then you have to figure out where to put it all. Then you wonder if the tariffs are even going to happen. It’s exhausting.”
