How to Use Section 321 to Lower your Cost of Business

Ecommerce businesses often fulfill customers’ needs by finding overseas goods that meet consumer demand, importing them, and selling them through a web platform for a profit.

However, many businesses across the country are adversely affected by importation taxes. So how do you maximize revenue and run a successful business?

For starters, you can augment your business’s sourcing and manufacturing by keeping the cost of logistics down. At the same time, you also need to stay up to date with the laws and regulations placed by the US Customs and Border Protection.

One such law permits low-value cargoes to get around taxes and duties. This law, known as Section 321, makes it quite affordable to ship products to the US.


What is Section 321?

Section 321 is a U.S. Customs and Border Protection shipment classification that allows goods to clear through customs tax and duty-free.

Section 321 helps businesses save on the importing cost for shipping products that have a retail value under $800 to the United States. Accordingly, you can eliminate all duties, thus effectively cutting cost, if you can classify your imports as a Section 321.

It is important to note, however, that you cannot import all goods under the Section 321 category.


Find out exactly what qualifies under Section 321.

Coming from an expert Maritime Law Lawyer San Diego, you should also try to understand other applicable laws to your import products.

As you will see over time, a little bit of research into these regulations goes a long way, and that includes learning more about Section 301 which entails any product that would have U.S.-specific import duties placed on them.

In fact, this section has initiated increased tariffs on a broad gamut of products such as

  • food and beverages
  • household products
  • sporting equipment
  • personal hygiene products.

Fortunately, Section 321 predominates over Section 301 if the goods being shipped satisfy the de minimis value.


Know your Limits…And Plan Around Them

Likewise, some items have restrictions under administrative rules so it’s important to keep that in mind when considering which products to import and which to purchase domestically or avoid altogether. These items include:

By staying abreast of these regulations, you can save your business a lot of time and money.


Redirect Your Shipments with Canadian Fulfillment

Aside from gaining full knowledge of the law, you can also use Canadian fulfillment to help you gain the maximum advantage of claiming Section 321.

Canadian fulfillment is a service whose purpose is to eliminate import duties and tariffs for American business. They basically create an avenue for American businesses to redirect the shipments of Chinese goods to their destination by way of Canada.

Also, Canadian fulfillment fulfills these orders and sends them off to individual consumers in the USA, preferably, on the same day. By utilizing this service, your customers get their products in a timely manner, and with the same shipping costs and methods, one would expect from any other US-based company.

Consequently, this saves a lot of expense by eliminating all duty costs while upholding shipment accuracy or delivery schedules. With this shorter distance to the border, manufacturers gain the advantage of the same quality assurance as if shipments originated from a facility that’s based in the U.S.

For example, if an American company imports finished goods from China, it’s paying the usual duties that vary from two to five percent. When the cargo reaches the U.S. processing facility, the items must be tested and prepared for sale, and labeled for shipment.

To avoid this expense, manufacturers can send inventory to Canada and obtain Section 321 protection instead.


Avoid Multiple Claims in One Day

Another step you can take is to divide your shipments between multiple days while still ensuring they don’t exceed the 800-dollar retail value.

Thus, it’s important to remember that you can’t divide your parcels into multiple shipments to arrive on the same day. This is because any shipment that is covered by a single order or contract will not be categorized as a Section 321 if the total value of that shipment exceeds $800.

Rather, this might take a bit more planning but would be well worth the savings in the long term.


Cut Down on the Paperwork

Despite the necessity for proof of value, Section 321 significantly decreases the amount of paperwork that you’re required to do in order to bring in products from overseas and to gain clearance for them across the border, which greatly speeds up the shipping process and does away with interruptions in the shipping process caused by complications at customs.

How does this work? You don’t have to include Section 321 shipments in the eManifest if all shipments in the truck fall under the Section 321 category. If the carrier is transporting goods that fall under Section 321, all items must be declared in the ACE eManifest.


Lower Your Costs by Outsourcing

In addition to working with a Canadian Fulfillment company to invoke Section 321 on your imports, you might consider outsourcing. Offshore outsourcing can lower costs even before the shipping process begins.

In addition to parts or goods that are manufactured outside of the U.S., you can also outsource some necessary services that relate to your business’s operation. Such services include:

  • customer care
  • content writing
  • software
  • technology and infrastructure.

Often, you will find talented and tech-savvy individuals in other countries, such as India, to fulfill some of your business’s daily operations—but at a much lower cost.

As a result, outsourcing combined with the services of a Canadian fulfillment company will effectively maximize your ability to save money.

To conclude, saving on international shipping costs can help you launch into the market more affordably while offering better shipping rates for U.S.-based customers.

When employing this service while outsourcing and using Section 321 to your advantage, you’ll save more money on logistics and can focus on meeting consumer demand.

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