Section 321 describes a category of goods that passes over the US border on a daily basis. Interestingly, this particular type of good actually crosses the border completely tax and duty free.
Which offers some unique benefits for small business owners…
1. Reduced Import Costs
Over the last few years, we have seen a number of new import tariffs introduced in the USA, making it more expensive to get large quantities of overseas products onto American soil.
While these costs were introduced with good intent, it has had some significant effects on the national economy, while also handicapping small businesses across the nation.
However, there is a solution.
As a small business owner, if you can get your imported goods classified as a section 321, then you can get them into the country cheaper. This has an obvious effect on your business by increasing your profit margin immediately.
But this isn’t the only positive.
2. Greater Growth for your Business
While lower import costs are undoubtedly a positive, this can have a notable flow on effect when it comes to business growth.
In current times everyone is struggling to keep the costs of their imported products low because of the import tariffs. This increased cost has been passed onto American consumers and led to a marked reduction in consumer spending in the USA.
But if you get your imported goods classified as a Section 321, you can pass the associated savings onto your customers.
This allows you to stand out from your competitors, increasing consumer confidence in your brand. Over time, this has the potential to cause exponential business growth and long term increases in income.
3. Faster Transit Times
Under normal shipping circumstances, you receive a large order from overseas. You then break that order up into smaller parcels, sell them individually, and ship them off to individual consumers.
Yes, this is a normal process, but it is not really the most efficient way to go about it.
If you can get your goods classified as a section 321, you can actually remove yourself from this process. Instead, you can get someone else to receive your order for you, and then pass them onto individual customers.
This means you no longer have to undertake the traditional packing process, speeding up shipping times, and keeping your customers happy in the process.
4. Fewer Problems
Let’s face it, if someone else is doing the order fulfillment, there are going to be fewer problems for you and your business to deal with. And don’t we all need a little bit more of that? What a lot of businesses are doing right now involves ordering large shipments from China, having that imported into the US, paying huge (and unnecessary) tariffs, then warehousing the shipment, where it’s broken down into smaller orders, repacked, and shipped off to customers. Now if someone else starts doing all of that for you, wouldn’t your life be a whole lot easier? I know mine would.
Now, of course you might be reading this and asking yourself why it’s necessary to have someone else do the order fulfillment, and that brings us to our next point — how do you get Section 321 classification?
How to Use Section 321
The key thing to be aware of when discussing this clause, is that to get your shipment of goods classified as a Section 321, it must not exceed 800 dollars in value. Within this, any large orders that have been broken up into smaller ones will not get classification because they will still fall under a single order or contract.
Which is where Canadian fulfillment enters the equation.
Over the last couple of years several Canadian Fulfillment companies have popped up with the intent to get your imports classified as Section 321.
As you may have guessed from the name, a Canadian fulfillment company helps you redirect your overseas shipments through Canada. In this manner, they not only act as a middleman between you and your customers, but they also help completely remove the import tariffs associated with large orders of overseas products.
In essence, these guys receive overseas goods on your behalf, and then ship them off to your individual consumers here in the USA.
Because the shipment is broken up into smaller orders, and then shipped off by a different individual, they can get that much desired Section 321 classification — giving you all of the benefits discussed above.
As I mentioned earlier in this piece, there are quite a few Canadian Fulfillment companies about the place at the moment — however, the largest is Stalco.
Despite only being established in 2018, Stalco has quickly become the biggest player in the Canadian fulfillment game.
They have a distribution center very close to the US border. They only use well known shipping companies to distribute your orders. And they fulfill their orders on the same day that they receive them.
All of which ensures that your customers receive their orders in a timely manner.
I should note that while working with a Canadian Fulfillment company like Stalco does come with a light cost, it is markedly less than the import tariffs you are avoiding — making it an obvious choice for your business.
And before you ask — yes, using a Canadian fulfillment company is 100% legal, so you have nothing to worry about there.
So, think about the opportunity here. You can have a competitive advantage in your ecommerce niche by utilizing Canadian fulfillment and proceed to sell the same product at a lower price point (or higher profit margin) than your competitors.
Key Message
Getting your imported goods classified as a Section 321 will not only reduce import costs, but also lead to the growth of your business. And assuming you find a high-quality Canadian fulfillment company to help you out, this can even speed up your shipping times.
Which begs the question — what are you waiting for?
