Some ecommerce brands have moved fulfillment to Mexico or Canada to leverage duty savings on inventory via tax code Section 321, a U.S. statute that allows certain goods under the aggregate fair value of $800 to be imported duty-free. Under the incoming White House administration taking office January 20, 2025, this regulation and tax loophole will be replaced with a 25% tax on goods coming in from Mexico, Canada and China.
Previously, on September 13, 2024, the current White House administration announced actions to modify Section 321 indicating strong bipartisan support to regulate the de minimis tax advantage.
What does this mean for high-growth brands that depend on duty savings?
While the ability to avoid duties on ecommerce shipments may wind down, there are alternative US-based fulfillment and logistics services, like Nimble, that use next-generation intelligent general-purpose warehouse robots to achieve equal or greater cost savings compared to Mexico fulfillment. This is accomplished by using 8x less labor and 4x less warehousing space while positioning inventory across the largest metros in the US to reduce transportation cost and transit times by over 2 days while saving brands over 40% in total logistics costs.
The following table highlights how Nimble’s autonomous fulfillment compares to a manual operation with duty savings.
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*Note that exact savings will vary based on specific taxes for the inventory.
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