Day 2 of How Small Business Owners in Canada Can Increase Production Amid U.S. Tariffs: Designer Handbags/Luggage
Published on April 15, 2025
By Manmeet Kaur, Endefine – Best Digital Marketing Agency in Canada 2025
We reported yesterday on how Canadian snack producers can outsmart U.S. tariffs by serving local markets and online channels. Today, on Day 2, we’re diving into the designer handbag and luggage industry—a sector hit hard by the 25% U.S. tariffs imposed on March 12, 2025, and Canada’s retaliatory 25% tariffs on $30 billion of U.S. goods, plus an additional $29.8 billion as of March 13. These tariffs have added to the price of imported materials like leather and hardware, and have made U.S. exports uncompetitive for small Canadian manufacturers. However, at Endefine, we see this as a chance to innovate and grow. In this article, we'll outline five new strategies for increasing production, followed by a detailed case study of how a Canadian handbag company made tariffs an opportunity.
The Tariff Threat to Luggage and Handbag Manufacturers
The American tariffs have increased the expense of exporting to the U.S. market—a key market for Canadian luxury products—where retailers routinely demand price concessions that squeeze margins. Although Canada's retaliatory tariffs on American imports, like leather and fabrics, have raised costs for small business production. For example, a small manufacturer importing leather produced in the United States now faces a 25% tariff, putting significant pressure on already tight budgets. But with the global handbag market booming—driven by demand for leather and crossbodies—and a burgeoning "Buy Canadian" phenomenon (66% of Canadians buy domestic products when there are trade tensions), there's a chance to shift and grow [from previous discussions]. Let's consider five ways to do so.
Appeal to High-Value Niche Markets with Storytelling
Instead of going head-to-head with mass-market brands, resonate with niche markets like green consumers or luxury travelers by emphasizing your brand's unique story.
What to Do?
Emphasize your brand's Canadian roots and eco-friendliness. For example, businesses like M0851 emphasize their Montreal roots and full-grain leather, appealing to consumers who value authenticity.
Employ social media storytelling to bring attention to your production process—Instagram Reels of a rtisans hand-stitching bags in a Canadian workshop.
Target niche audiences with geo-targeted ads, focusing on regions like Vancouver or Toronto, where high-end consumers seek unique, locally-manufactured luxury products.
Why It Works?
Niche marketing allows you to set premium prices, which pay for tariff costs and fund production growth. Storytelling builds emotional connections, encouraging loyalty and sales.
2. Partner with Canadian Designers for Limited Editions
Teaming up with local designers or influencers can generate buzz, bring in new customers, and help justify premium pricing to offset production costs.
What to Do?
Partner with Canadian designers to produce limited-edition handbags or luggage, such as a Rockies-inspired travel bag. Promote the partnership on your website and social media.
Do an Instagram Live virtual launch with exclusive early access for followers who pre-order, creating urgency.
Use local SEO keywords like "limited edition Canadian handbags" to direct search traffic during the launch.
Why It Works?
Limited editions give exclusivity while you can ramp up production for runs that have high demand while gaining prestige for the brand. Collaborations also give you an extended audience through the designer.
3. Adopt Circular Economy Strategies for Reduced Costs
The handbag industry is witnessing the rise of eco-friendly practices, and consumers also opt for the product by businesses that adopt repair schemes or recycling mechanisms. Reducing costs through circular economy processes attracts nature-conscious customers.
What to Do?
Design your handbags and suitcases to be repaired, if possible, with reduced new-material consumption.
Use recycled material or offcuts for new designs, lowering raw material costs subject to tariffs. For example, upcycle leather offcuts into small accessories like cardholders.
Emphasize your circular practices with a badge like "Sustainable Canadian Luxury" on your website, making your brand more appealing.
Why It Works?
Reducing material costs enables you to produce more without raising prices, while sustainability appeals to an expanding proportion of consumers, driving sales.
4. Establish an Online Community to Facilitate Pre-Orders
A specialized online community can facilitate funding production runs through pre-orders, minimizing financial risk in a tariff regime.
What to Do?
Build a community on Instagram or Facebook by sharing behind-the-scenes photos, customer reviews, and style tips along with your handbags.
Run a pre-order campaign for a new collection, offering the community special discounts for early orders.
Use email marketing to keep your community engaged, putting up updates on production and shipping timetables.
Why It Works?
Pre-orders provide seed capital to make more, while a strong community provides repeat business and word-of-mouth advertising, reducing U.S. sales.
5. Test New Markets Using Influencer Marketing
Foreign markets can be tested without the cost of conventional exporting, especially with tariffs reducing U.S. sales appeal.
What to Do?
Partner with micro-influencers in markets like the EU or Middle East, where there is growing demand for luxury handbags. For example, partner with a French fashion influencer and expose your bags to Parisian consumers.
Create multilingual landing pages (i.e., French, Arabic) to drive influencer campaigns optimized for local search terms like "sac de luxe canadien" (Canadian luxury bag).
Track campaign effectiveness using Google Analytics to identify which markets appear most promising and then scale up production to those markets.
Why It Works?
Influencers provide you with low-cost entry into markets and allow you to validate demand and create brand awareness. Successful marketing campaigns will fund additional production for new markets.
6. Leverage Data to Stay Responsive and Grow Intelligent
Consumer demands and tariffs change rapidly. Using real-time data, you can reorganize production to deliver efficiently in line with demand.
What to Do?
Track weekly website traffic and sales using apps such as Google Analytics. If there is crossbody bag dominance over tote bags, production can be redirected to produce the seller.
Monitor social media engagement to spot trends. If posts about “Canadian-made luggage” get high engagement, double down on that messaging [from previous conversations].
Use resources like Export Development Canada (EDC) to explore new markets and scale production strategically.
Why It Works?
Data-driven decisions ensure you’re producing what sells, minimizing waste and maximizing output in a volatile market.
Work with Endefine to Expand Your Business
At Endefine, we're committed to helping Canadian businesses in tough times. We're Canada's leading digital marketing agency for 2025, and we specialize in niche marketing, influencer marketing, and digital accessibility to help your handbag or luggage business grow. Let us help you turn tariffs into your next business boom.
Are you ready to increase production and tariff-proof your business?
📩 Contact us [Here] to start your strategy today.
📖 Learn more about us [Here].
The Bottom Line
U.S. tariffs do not have to slow your handbag and luggage business. Niche markets, partnerships, sustainability, community, and influencer marketing can assist in increasing production and finding new areas of growth. Turn your brand into a success story—contact Endefine today!
