For most emerging consumer packaged goods brands, landing a purchase order from a major retailer has always been the moment that the business is supposed to change. A 3,000-door launch from a national chain validates the product, justifies the next production run and opens the door to the kind of shelf presence that smaller brands spend years chasing. It’s also, less visibly, the moment a brand's cash position becomes most exposed. And that exposure just got harder to model.

In July, the U.S. Trade Representative's office finalized tariffs of 10% to 12.5% on imports from 60 trading partners, covering roughly 99% of U.S. import volume. For import-dependent brands, this closed the door on a period of relative unpredictability and opened a different one: tariff levels that are now fixed on paper, but still capable of landing mid-production, after a purchase order has been priced and before the goods have shipped. 

That timing gap is what most people don’t consider. Tariff policy is usually discussed as a macro issue encompassing trade balances, geopolitics and industry-wide cost pressure. For a founder running a CPG brand with $2 million to $20 million in revenue, it’s a working-capital problem with a specific shape. An order is committed, a co-packer deposit is due, packaging and freight need to be paid and the retailer typically pays on 60 to 90 days terms after delivery. If any input in that chain, such as a fabric, resin, finished good or ingredient, comes from one of the affected countries, the landed cost of that order can shift after the price to the retailer is already locked.

Retail purchase orders are priced in advance and typically aren’t renegotiable once accepted. A brand that priced a run before a tariff increase absorbs the difference itself. For a company operating on thin CPG margins, a few points of unexpected cost on a large order can be the difference between a profitable growth milestone and a quarter that erases the benefit of winning the shelf space in the first place. This is where financing structure starts to matter more than financing amount.

Making Tariff Exposure Worse

Many growing brands finance retail orders with short-term debt, merchant cash advances or factoring arrangements that were designed around predictable costs and fixed repayment schedules. Those structures work reasonably well when the input costs underlying an order are stable. They work poorly when a tariff change lands between the time financing is drawn and the time the retailer pays.

A fixed daily or weekly repayment schedule doesn’t adjust if landed costs increase mid-cycle. Nor does a factoring arrangement that advances against invoice value calculated before the cost shift. In both cases, the brand is left servicing debt sized for the original economics of the order while absorbing a cost increase the financing structure was never built to account for. The result is a margin squeeze on two fronts at once: the tariff itself and a repayment obligation that doesn’t flex with it.

This isn’t a cash-flow problem in the typical sense. A brand can have adequate financing in absolute dollar terms and still be in a worse position than one with less capital, but a structure that matches repayment to when cash actually arrives from the retailer.

When to Stress-Test

Founders that source from tariff-affected countries should be running this simple exercise before accepting large orders, not after. Model the purchase order at current landed cost, then again at a landed cost 10% to 15% higher. Then check whether the order is still profitable, and if the financing being used to fund it can absorb that swing without breaking the brand's cash position.

Any financing arrangement being used to fund inventory or fulfill a retail order right now should be under constant review. Does repayment timing align with the retailer's actual payment terms, or does it assume payment arrives faster than it will? A structure that requires repayment before the retailer has paid the invoice creates a cash gap regardless of what tariffs do. Is the cost of capital fixed against the original order value, or can it flex if landed costs change before goods ship? Financing drawn against a fixed cost basis leaves no room for a mid-production cost increase. What happens if the order is delayed? Co-packer scheduling, port congestion and customs processing can all push a shipment past its original timeline, during which additional tariff or holding costs may accrue. A financing structure that assumes a fixed timeline is fragile when the timeline itself is one of the variables in flux.

None of this requires predicting where tariff policy goes next. It requires acknowledging that the current environment removes the assumption that landed costs on an order will still reflect the price a brand quoted a retailer three months ago.

The Larger Issue Is Timing Exposure

Tariffs are the immediate trigger, but the underlying vulnerability they’re exposing has been building for a while. Growing CPG brands routinely operate with production costs due up front, retail payment due 60 to 90 days out, and financing structures that weren’t necessarily built with that gap in mind. A brand can be winning in the market, growing its retail footprint and still be financially fragile if its capital structure doesn’t account for the full distance between when cash goes out and when it comes back in.

The brands that will manage this period well are the ones that understand, order by order, what their true landed cost and repayment timeline look like, and who structure financing to match that reality rather than a simpler one that no longer holds. In an environment where a cost input can change while an order is already in production, that distinction is a determinant of which brands convert retail growth into a stronger business, and which ones let it become the thing that breaks them.

Harte Thompson is chief operating officer and co-founder of Bridge.