Ssense Pivots to US Logistics as Tariff War Escalates
AI-generated image · Bay Street Wire
The luxury e-commerce platform will open a Northeastern US fulfillment center to bypass costly duties on its largest market.
For luxury e-commerce operators, the era of centralized Canadian fulfillment for US-facing sales is effectively over. As BetaKit first reported, Ssense is providing the loudest signal yet of this shift, announcing plans to open a large fulfillment center in the Northeastern United States early next year to avoid the crushing weight of US tariff policy.
According to BetaKit, Ssense told The New York Times that the move is designed to ease the financial hit on its largest customer base. The company's strategy involves partnering with a third-party logistics company to run the new facility, which will import global inventory specifically for US customers. While Ssense will maintain its headquarters and a fulfillment center in Montréal to serve international markets, the US expansion is a tactical necessity.
**Opinion: The Cost of Survival** From an operator's perspective, this is a costly but mandatory pivot. The centralized model is no longer viable in the face of a trade war. BetaKit illustrates this with a hypothetical example: a $990 cardigan shipped from Canada currently incurs $97 in duties for a US customer. However, if Ssense imports that same item to a US warehouse at a wholesale price of $300, the tariff drops to approximately $30.
This logistical overhaul comes as Ssense attempts to recover from a period of extreme instability. BetaKit reports that tariffs were a contributing factor to the company's insolvency last year. The brand was eventually bought back earlier this year by the family of co-founders Rami Atallah, Bassel Atallah, and Firas Atallah, following a restructuring plan that avoided a sale to lenders. To keep the business afloat, the company has already cut more than 200 jobs.
The urgency of this move is underscored by the deteriorating trade relationship between the US and Canada. BetaKit notes that the trade war intensified recently after Canada exited trade negotiations, leading the US to implement sweeping 50 percent tariffs on various goods. While the Canadian government has introduced an aid package to support businesses through the remainder of Donald Trump's term, the US President has explicitly called for Canadian companies operating in the US to relocate their headquarters south.