How to use Canadian fulfillment to get your overseas shipments classified as Section 321, remove importation costs and increase your business revenue
There are a number of different ways entrepreneurs and small businesses can increase their profits. They can source new products and services to sell, they can reduce their production costs, or they can find unnecessary expenses and remove them.
And to be honest, I am a big fan of the last option on this list — especially when it comes to the cost of importation.
During the early stages of Trump’s tumultuous reign as president, he introduced a number of import tariffs on overseas goods. These tariffs essentially made it much more expensive to get large shipments of products onto US soil.
While this was done with the intent to increase the nation’s reliance on local products, it ended up making it more expensive for people to run their business. This destroyed small businesses across the nation, while simultaneously impacting consumer trust in the American economy. Genius.
But fortunately, there is a solution — and it lies with what is known as “Canadian Fulfillment”.
OK, so what in the world is Canadian Fulfillment?
Well, in short, it describes the process of buying your overseas goods as you would normally, and then getting them shipped to Canada. Once in Canada, they are held until you get individual orders from customers, after which they are shipped off as required.
Now you might be wondering why anyone would want to do this — and there is a very good reason.
Very simply, Canada does not have the same import tariffs as the US does. This means that you can completely eliminate the importation costs typically associated with getting goods delivered directly to the USA.
I appreciate that this might sound a bit questionable, but it is actually becoming common practice amongst American entrepreneurs — and it all comes down to a little thing known as Section 321.
Every single good that passes through American customs legally does so under a specific classification. This could be related to the type of good, the location from which it is coming from, or who it is coming too.
And Section 321 is one of these classification — an important one, I should add.
See, any goods classified as a Section 321 cross into America completely free of import tariffs. This means that if your goods can get Section 321 classification, you can save a heap of money on shipping.
But gaining section 321 classification is easier said than done.
Using Canadian Fulfillment to Get Section 321
For a shipment crossing the border to be classified as a Section 321, its total value must not exceed 800 USD. And no, before you ask, you cannot simply break your order up into smaller shipments, because it would still have been made under the single order.
Which is why Canadian Fulfillment is so effective.
If you can get your order broken down into individual packages in Canada before being sent off to US consumers, each individual order can gain Section 321 classification — completely destroying any potential importation costs.
How to Use Canadian Fulfillment to Your Advantage
With all this information, you might be wondering how you can actually make it work — and the good news is that certain companies exist that do it all for you.
These companies are known as “Canadian fulfillment companies”, which describe Canadian-based companies designed to remove import costs for small US businesses by using the Section 321 classification.
You can think of them as a bit of a middleman who acts on your behalf. They receive your shipments and store them for you. Then, when you receive an individual order, they send it directly to the customer as a Section 321 — saving you money in the process.
Now, it is important to note that they do not do this for free.
Obviously, they are providing a high-quality service to you, which comes with an associated cost. However, in my experience, this cost is often markedly lower than the cost that comes with import tariffs.
As more small businesses have learnt about Section 321, there has been a rapid rise in the number of Canadian fulfillment companies available, which can make finding a good one quite difficult.
With that in mind, our pick for Canadian fulfillment is Stalco.
Since 2018 Stalco has been helping US businesses avoid import costs very effectively. Their distribution center is very close to the border, they provide same day order fulfillment, and they use all of the major US carriers.
All of which means they offer a reliable service that ensures your customers receive their orders without delay.
Canadian fulfillment is a viable strategy that you can use to get your overseas shipments classified as Section 321. In doing so, you can completely remove importation costs and increase your business revenue.
While there are a couple of different ways to go about this, hiring a professional company to do it for you is the safest option — which is why we recommend Stalco, our Canadian Fulfillment company of choice.
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