When you are a growing eCommerce business, one of the first plans would be to import premium or unique products that your competitors don’t sell. Most eCommerce businesses drop this plan during the initial stage because of the high import duties and other costs involved in the transportation of these goods.
With many import duties, rules, and regulations already in place, the US Customs and Border Patrol (CBP) wanted to simplify the import process for the businesses. Section 3 lets companies avoid some of the taxes and duties imposed on imports to the US. As of now, it is only applicable to businesses t20hat have lower shipment costs and items with low value (less than $800).
You might wonder how this offers a cost-saving advantage to eCommerce businesses. The answer to this is pretty simple. If you are an eCommerce business that constantly ships high volumes of low-value products to the US, claiming Section 321 will give you a considerable advantage in reducing your shipping costs. Let’s understand the provision a little more in detail and its benefits.
What is Section 321?
Section 321 is a CBP U.S. Shipment Type issued by the US Customs and Border Patrol that lets businesses avoid duties and taxes on imported low-value goods. The section belongs to the Tariff Act of 1930, allowing businesses across the US to benefit from duty-free imports. If qualified for section 321, businesses can be exempted from:
- Custom fees
- Import taxes
- Import duties
Just like every other provision, Section 321, too, comes with a set of conditions of its own:
- The section (de minimis) can be applied to products with a retail value of or less than $800 only.
- Specific goods such as cigarettes, cigars, alcoholic beverages, harsh chemicals, and more are not eligible for the tax exemption under this section. If the products fall under any other particular category of US rules and regulations, they should be inspected separately to see if they are eligible for section 321.
- There is a restriction of one shipment per day per company. If you have multiple shipments a day, you cannot apply for section 321 even if you have low-value goods.
- Even for Chinese imports, section 321 can be applied if the products are within the $800 limit.
To claim Section 321, all you need is to file the number of imports accurately with CBP. But some of these goods may require an eManifest which is the electronic receipt that includes information importers provide to customers before the delivery. Once you submit the eManifest, all that’s left is to inspect and verify the imports and information to ensure there is no exploitation of Section 321.
Filing for Section 321 is not mandatory for imports, and it’s entirely up to you. If you are looking for ways to cut costs and improve your profit margin, then section 321 is your best bet. The information you provide in the filing should be accurate, and any discrepancies can lead to cargo hold and seizures, resulting in huge losses of money and time. If your order fulfillment, shipping, and logistics are managed and coordinated well, filing for Section 321 should be a breeze.
How Can Section 321 Benefit Your eCommerce Business?
Section 321 can benefit any business regardless of how big or small they are. However, if you are a small eCommerce business with plans of expansion and maximizing profit, Section 321 can do wonders for you.
Who doesn’t like increasing their profit margin and reducing costs? If you are frequently importing low-value goods to the US, section 321 can help you save huge on your import costs. Even for goods imported from China, Section 321 overrides Section 301 tariffs. China offers efficient, low-cost manufacturing options for companies, and if you are using this option, then section 321 will help reduce costs in various business functions.
Less Shipment and Logistics Delays
Reduced taxes and customs duties are not the only benefits for Section 321. You are avoiding a significant amount of paperwork too. This means the goods will reach you in less time, and you can even automate some of the documentation with the help of your fulfillment partner.
One of the main factors that affect your customer preferences is faster and low-cost shipping. With Section 321, you are lowering your costs, initiating faster imports, and reaching the customers in less time, giving you an advantage over your competitors. Having a 3PL fulfillment partner can help you streamline the import and logistics processes and improve customer experiences.
No matter how big your eCommerce business is or how well you know the US rules and regulations, importing goods can become daunting with the multi-layered processes. With the help of a 3PL fulfillment provider like ShipBots, you can implement efficient and intelligent shipping and import practices and use various import rules to your advantage.
Leverage our extensive knowledge about shipping, logistics, order fulfillment, and inventory management to help your business reduce costs and maximize the profit margin. Get in touch with us today to learn more about how you can use Section 321 to your advantage and how to reap maximum benefits from it.