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How To Determine If Section 321 Is Right For Your Business

how-to-determine-if-section-321-is-right-for-your-business
How To Determine If Section 321 Is Right For Your Business

International trade is complex. Even if you’re an American business, your products may be based in another location, such as China or Europe. You might also need to import materials from other countries to create products or offer services. In this case, you must pay import and export taxes and duties, which can affect your overall profit.

One powerful tool that can make this whole process easier, especially when you want to reduce transport costs, is Section 321. It is made for low-value goods being imported into the United States. But how do you know if it’s right for you and your business? That’s what we’ll be looking at below.

Let’s get started. 

What is Section 321?

Before we deep dive into whether you should start using Section 321 for your business, let’s take a closer look at what it actually is. It’s a section of the Tariff Act released in 1930 that was designed to help import goods of a lesser value into the United States. The whole aim is to reduce the requirements individuals and businesses must meet at customs, as well as keep costs low.

Section 321 offers duty-free entry for any goods valued at $800 or less per shipment. Therefore, it’s perfect for businesses that have been trying to import goods into the US but have lost profits due to import fees and taxes. 

Assessing your current U.S. sales

One of the first things you should consider when deciding whether Section 321 is right for you is looking at whether you already sell to United States customers. If you do, this already tells you that you have a market there and a brief knowledge of what it means to ship into the country. 

If you have a large demand for your products already, it’s good to assess how your sales are going. The better the sales and the more you’re sending out, the more you’ll get out of using Section 321. 

For example, if you offer your products on a wide range of platforms, from a website designed for U.S. customers to other marketplaces like Etsy and Amazon, you have the potential to sell more products. The same applies if you are catering to a larger target audience than one that is more specific. 

If this is the case, you can definitely get more out of using Section 321, as you don’t have to conduct more research on how customs and duties work, and you know that it will be worth it. 

Cost-saving potential

If you want to save money on taxes and duties at customs when importing products and materials into the United States, then Section 321 is definitely for you. When you send out packages with goods valued at $800 or less, you don’t need to pay any duties.

Not only does not paying duties help you save on costs, but the simplified customs clearance process also does. You won’t have to spend as much time and money on administration for customs. 

Opting for Section 321 can increase your annual revenue, which is a goal every business wants to meet. 

Compliance with Section 321 requirements

We’ve already mentioned how Section 321 allows items worth under $800 to enter the United States duty-free, but what sorts of products can these be? There’s actually an exemption list for Section 321, and even if they meet the cost threshold, they won’t be able to receive the benefits as they don’t comply with all the requirements. 

If none of your products include the following, then you’ll be okay with using Section 321. Here are the most common items on the exemption list:

  • Alcohol – This includes any drinks that include alcohol.
  • Tobacco – This includes tobacco products such as cigarettes and cigars. 
  • Certain textiles – If you sell clothes and apparel, some are subject to quote restrictions.
  • Perishable goods – This includes items like fresh produce, meat, and dairy products.
  • Medications – This includes prescription medications and controlled substances. 

Ensuring your items qualify

Last but not least, you can only use Section 321 if the bulk of your products and offerings are valued at below $800. For example, if you are a furniture or technology company that sells high-priced products that are often above $800, there wouldn’t be much point using Section 321 because you will have to end up paying duties in the end anyway.

On the other hand, if you sell clothing that doesn’t fit in the textiles exclusion, gadgets, gifts, or even low-priced home decor pieces, you can easily use Section 321. Your business can send the products to the United States without having to worry about declaring anything and save on costs at the same time. 

Conclusion

Section 321 is a godsend for many businesses, especially when they’ve found themselves spending too much money on customs and duties. It allows businesses to sell to the United States and bring in a decent amount of profit at the same time due to the savings they’ll be receiving.

If you want to make the most out of Section 321 but don’t know where to start or want to know more about how you can use it, then Portless is here to help. We are a 3PL company based in China that has all the knowledge and tools to help you import your products into the United States seamlessly. Contact us to get started.

This article originally appeared on Portless and is available here for further discovery.
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