The moment has finally arrived. You have your great idea for a product, and you have done your homework on some cost-effective sources. But, you can always find more ways to save a buck on imported goods such as:
- Buying in bulk
- Staying on top of the latest import regulations
- Getting assistance from Canadian fulfillment
Import duties play an important role in international trade. However, you should always watch out not to pay more than what is asked by the law, as it could drastically affect your business profitability. And while there are many ways you can decrease import duties, below are the top three:
Buy in bulk and Save on Transportation
No matter the product and country of origin, it will always be cheaper to order 10,000 instead of 1,000 pieces. However, this does require some shopping around. Some countries have lower labor costs than others, but if you can find a quality product that’s manufactured at a reasonable price, then you’ve just created a win-win situation for both you and the supplier.
Plus, it pays to negotiate the price and the terms when purchasing items in bulk. The manufacturer will give you a better price per unit, you will save on freight costs, and you will create a better margin. Not only will the cost come out cheaper for you, but you’ll also save time since you won’t have to reorder quite as often.
Keeping in the “Know” With Section 321
Other vital factors to consider are import-related laws and regulations and trade tariffs. With the ever-changing world of trade, you can save time and money by consistently researching any regulations that would impact your expenditure. Furthermore, you’ll need to make sure that any companies who participate in your supply chain are doing the same.
For starters, each country has its own tariffs. Every new order comes with additional costs. Plus, the customs procedures might fully differentiate from one country to the next. So, you would need to ensure that every single item listed has the correct tariff code. Remember that the first few digits are locked in while the last ones differ by nation. Even with your neighboring countries, make sure you are well familiarized with their tariffs so you can avoid any future issues. Nothing costs a business more than using the incorrect code or applying a code from the wrong country.
In addition to staying updated on tariffs, you’ll also need to do your homework on regulated items. Not every product passes through customs with ease, so you’ll save yourself some unnecessary expense by maintaining a current list of items that aren’t allowed from specific countries and items that will cost more due to the stipulations incurred by various nations.
Likewise, there is a way around a few of the extra expenses imposed by tariffs, duties, and other costs, and that is Section 321. Becoming completely familiar with this law will save money while opening the door to a business relationship with the type of company that assist you in determining which goods and quantities fall under Section 321 and how to optimize logistics to be able to claim this important category for your shipments.
Utilizing Canadian Fulfillment
In a nutshell, US customs allow imports of goods with a retail value of up to $800, and that shipment must be done in one day by one person. These parcels are known as Section 321 shipments. Now, there are business entities known as Canadian fulfillment companies that offer a service to use Section 321 to your advantage.
Canadian fulfillment is very practical, with distribution centers close to the U.S. border, you can arrange for your large shipments from China, for example, to be delivered directly to Canada, and from there, the company will break up the order into smaller parcels and ship them directly to your customers. Using Canadian fulfillment like this guarantees the elimination of the import tariffs from the shipping process. By avoiding the extra taxes placed on goods that would otherwise be sold to you at a reasonable price, you gain a sizeable savings that you can also pass on to your clientele. This results in a heftier bottom line and a vital boost to your business.
So, it is important to take advantage of viable opportunities, like Canadian fulfillment, to save money. You should be ordering your supplies in bulk and negotiating a mutually beneficial rate with your source. Also staying apprised of any changes in commerce and import laws while following necessary procedures, such as utilizing the correct tariff codes and ensuring that all paperwork is in order will protect you from any surprise costs and wasted time. Finally, by using Canadian fulfillment you’ll get a company who knows the “ins and outs” of Section 321. You will eliminate the import tariffs that drive prices higher, your customers will stay happy, and you will make a substantial impact on your business.