An entrepreneur who works in online retail, are always on the lookout for ways to improve the efficiency of my business.
In the past, this has been accomplished by reducing the amount of money spent on shipping products into the country, reducing the man-hours required to manage the orders made by customers, and by creating more time to focus on business development.
It is well established that improving just one of these factors can create huge dividends with respect to income, which is why finding methods to improve all three is so impressive.
And it can be accomplished by learning how to claim Section 321.
Removing Import Costs
Anyone working in this space knows about the import tariffs introduced by Trump in 2016.
While there is no need to go into detail about them here, the key message is that they made it wildly more expensive to import overseas goods into America. This made it harder for online entrepreneurs to turn a profit, killing hundreds of US businesses in the process.
But less well-known is that in the same year that Trump increased the cost of importation, the De Minimis value for goods that were imported was then increased to 800 USD. This simply sets out the max dollar value that any given package must remain under in order to avoid an importation levee.
OK, so what does this have to do with Section 321, and more importantly, how is it going to help my business?
Well around this same time the De Minimis threshold was also embedded into the Section 321 exemption, creating a way that you can remove import costs.
Section 321?
Every single shipment that enters the US from another country is allocated a specific classification.
This could be related to the type of goods that are being entered into the country, who is sending or receiving them, where they are coming from, or even based upon their perceived value.
With this in mind, Section 321 is a category of shipment that sits below the De Minimis value of 800 dollars. Which means that any time you get your goods classified as Section 321, you stop spending money on importation duties.
See what I mean?
A massive boon.
Now, the obvious issue with this whole process comes down to the fact that the De Minimis value is set at 800 dollars.
I mean, if you have been doing this type of business for any length of time, you know just as well as I do that importing less than 800 dollars of goods simply isn’t a financially viable option in the long run.
But, as I alluded to at the start of this article, there is a very good solution.
Claiming Section 321
Since 2017 there has been a notable uptick in the number of order fulfillment companies entering the market. And while this might seem strange, it is easily explained by the Section 321 shipping clause we just discussed.
Order fulfillment companies are Canadian-based companies that provide a unique service to US businesses.
In short, they receive your orders of overseas goods and store them on your behalf. Then, when you receive an order, they pack them up and ship them directly to your customers.
Importantly, every time they send out an order, it is considered a “new” shipment that is going to be valued under 800 dollars (well, under most circumstances), allowing it to gain the much desired Section 321 classification.
This obviously causes an immediate reduction in shipping costs — but the benefits don’t stop there.
The Benefits of Section 321
Getting involved with an order fulfillment company was arguably the smartest business decision some people have made to date.
Before anything else, it saved them money.
I mean, yes, they do charge for the service they provide.
But the money saved on import tariffs, warehouse space, and staff, far outweigh this amount, making it a no brainer if you are looking to increase profit margins.
Secondly, they found themselves with a whole lot more time.
Because they no longer have to receive, pack, and ship customer orders, they have a heap more time to spend on business development. This means better marketing, more robust customer feedback, and eventually, more business growth.
And finally, their customer reviews actually improved.
While they always did their absolute best to provide a quality service to their customers, they simply could not compete with the speed of shipping provided by their order fulfillment companies. And faster shipping times quickly equated into happier customers.
So, to summarize:
- Save money on shipping, warehouse space, and staff
- More time to focus on business development and marketing
- Faster shipping times and better customer feedback
Also known as: the holy trifecta.
Last Message
If you are a US-based entrepreneur, then the cost of importation has the potential to completely hamper your business. Which is why taking advantage of Section 321 is an important step that cannot be ignored.
Not only will this save you money, but it will also lead to better customer support and substantial business growth.
In short, it’s a no-brainer — so what are you waiting for?