As an Ecommerce entrepreneur living in the United States, you are never left out of all the extra taxation that follows the importation of goods from China.
Don’t we all intend to make a profit from our online store and e-commerce business? Well, Canadian fulfillment is the answer!
What is Canadian Fulfillment?
Canadian fulfillment helps you as an entrepreneur to cut all unnecessary costs that eat into your profitability. But what is Canadian fulfillment and how can you use it for your business? Let’s find out!
If you’re into importing goods, you would have had to deal with some US Customs and Border Protection (CBP) laws and regulations.
One common CBP law that positively affects your business profitability is Section 321. It enables minimal shipment costs that bypass taxes and the US instituted laws.
If you think about it, it is more like a law that can help you evade taxes, making shipping costs low and a lot more affordable. Especially if you ship your goods from China.
The “SECTION 321”
The Section 321 law, as explained helps you cut through tax and duty on shipments. Section 321, also known as de minimis, is applicable only on low-value goods shipped into the US by one person on one day.
The threshold of this law is set at $800, which means that for goods above that price, the law becomes non-applicable.
However, It’s just a 24-hour window. As such, you can ship your goods in parts ensuring you don’t pass the $800 mark. You can see it as a daily transaction limit.
How To Claim Section 321 For Your Ecommerce Business
Maybe you’ve wondered why importing from China has so many restrictions, especially within the US.
The US and China are currently involved in a trade war (also known as Section 301 or 301 China). This trade war is not much talked about except if you actively study economic laws. But, its effect still stings shipping-related businesses whether you like it or not.
Luckily for you, section 321 overrides 301 China.
To claim section 321, you can direct your shipment to Mexico or Canada before bringing it to the US.
There are numerous fulfillment centers in Canada and Mexico to help you with your shipment. Many of these centers are located close to the US borders to facilitate the fast movement of goods to the US.
These fulfillment centers help you ship your order to US customers when a sale is made.
However, certain conditions must be met to claim section 321:
- Goods must belong to one person and not a company.
- Shipment should never exceed $800.
- Only one shipment can claim section 321 in a day. (In a situation where you have to make more than one shipment in a day, make sure you tell your courier service which shipment should claim section 321. You’d have to pay a fine and an extra charge for the rest.)
Sometimes you might face roadblocks, especially when customs declare your goods are suspected to be harmful, as such section 321 cannot be applied. But you shouldn’t have to worry about that if you always make sure that the goods are properly listed in your invoice.
Cutting costs is important to businesses and as an e-commerce entrepreneur, it’s also important to you. Don’t pay taxes on low-value goods when there’s a law that helps you to bypass them.