Over the last decade, the world of online business has exploded. People from any location are able to earn a living by selling products online. It has helped small businesses and entrepreneurs expand their market. Some products however are subject to certain taxes that can lower a company’s profit.
There are ways to avoid unnecessary tariffs through Canadian fulfillment and what is known as Section 321.
Avoiding Import Tariffs through Canadian Fulfillment
Over the last few years, the Trump administration introduced a number of different import tariffs that target certain overseas products. In short, these tariffs make it more expensive to ship overseas goods onto US soil.
Although this was done to increase reliance on local business, some believe it did not have the desired effect. Tariffs led to price increases and smaller profits. There are legal ways to avoid having to pay unnecessary tariffs through using a Canadian fulfillment company.
If you import products from overseas and are currently paying duties and tariffs, they help you remove 100% of those costs through their duty elimination program.
Canadian fulfillment companies offer a unique service that allows you to ship your imported goods through Canada before sending them to your individual customers in the US. They remove the import costs through Section 321.
Section 321
Section 321 describes a classification of goods that crosses into the US from overseas. Every item imported is given a certain classification. It is based on the type of product, the industry, and the value of the product.
Section 321 goods are not subject to tariffs. For your order to qualify for Section 321, its total retail value must not exceed 800 US dollars and cannot consist of multiple shipments covered by a single order or contract. This requires you to break your order up into smaller shipments or purchase a large amount of a particular good, which may not be cost-advantageous for you.
This is where Canadian fulfillment companies help classify your products as section 321 goods. These companies act as a middleman between you and your customers. They receive and store large shipments on your behalf, and then send them straight to the customer.
Because your imported goods are stored in Canada and then enter the US under a new order number, they legally gain the Section 321 classification and do not incur any importation costs.
Which Canadian Fulfillment to Choose
As a result of the tariffs, a number of Canadian fulfillment companies have hit the market. Here is what to look for in choosing one.
- Make sure that they ship through all the major US carriers. This will make the shipping process as easy as possible.
- Ensure that they have distribution centers close to the US border. This guarantees that your customers will be able to get their products in a timely manner.
- Check reviews and references, make sure they offer the service you need at a value-added price.