5 Ways to Determine if Section 321 Fulfillment is Right for You

Sep 30, 2022 | Blog

By Maggie M. Barnett, Esq. COO of ShipHero

High shipping and duty fees are a constant reality of our globally interdependent world. Finding ways to lower these costs, and therefore, increase revenue, is one of the biggest tasks for all eCommerce brands. Now, as inflation has become higher and there is little end in sight, finding ways to save is more important than ever.

We’re going to discuss Section 321, a provision from U.S. Customs and Border Protection that allows U.S. citizens to order goods duty-free from Canada (up to $800 USD per day). 

How can that help your business? Because, the duty savings isn’t just for the customer, it applies to the business too. Here’s the breakdown of Section 321 and the top ways to know if your brand is a fit for this cost-saving measure.

What is Section 321?

ShipHero began talking about the Section 321 program here, when we opened our first Canadian warehouses. It’s one of the best under-the-radar options for eCommerce businesses to save money. 

In layman’s terms, Section 321 is a provision from the U.S. Customs and Border Patrol that allows U.S. citizens to order goods duty-free from Canada (up to $800 USD per day).

Here’s how that can help a business like yours:

• When you import goods to Canada, you will be qualified for a duty deferral or a duty drawback. In both instances, this means that once you send your products to a customer in the U.S., you will not need to pay duty fees on it (duty deferral). OR the Canadian government will reimburse any duty fees you’ve already paid (duty drawback).
• This savings can easily add up to 20% of your total landed costs and can really make a difference in your company’s success.

So, what’s the catch? There is no catch, which is the best part. And the even better part is that once you are a ShipHero Fulfillment client, we handle all the logistics for you.

5 Ways to Know if Your Company is a Fit for Section 321 Fulfillment

It can seem a little complicated, so here’s a breakdown of 5 key ways to know if Section 321 Fulfillment  is right for your brand.

You already import to Canada and sell to U.S customers.

If you are already sending some or all of your inventory to Canada, and selling to U.S. customers, then you might be paying duty fees that you’re technically exempt from. Make sure that you are getting the benefits of Section 321 if you already ship products from Canada to U.S. customers.

You can decide to send some of your inventory to a Canadian warehouse and see just how much you could be saving. You can still fulfill from a U.S. location as well.

You need to save some money on shipping fees and taxes.

Taking advantage of Section 321 is easy – you just need to adjust your supply chain so that your inventory goes to Canada. You may qualify for a duty deferral, so that the duty fee is waived when the inventory is imported to Canada. Or once a U.S. customer places an order (for $800 USD or less), and that order is shipped, you’ll be eligible for a duty drawback. 

Here’s a possible savings example:

• Import $12 pair of shoes to Canada
• 18% Duty rate = $2.16 tax on shoes
• Duty Elimination or Drawbacks save you $2.16 for just 1 pair of shoes!

Once you multiply that by 10 or 100 or 1,000, you’ll start to see the savings really add up.

You don’t sell or ship any of the items on the Section 321 exempt list.

There are some products that don’t qualify for Section 321. Here’s a rundown:

• Goods needing inspection as a condition of release, regardless of value
• Merchandise subject to Anti-Dumping Duty (ADD) and/or Countervailing Duty (CVD)
• Products that are regulated by the following Participating Government Agencies (PGAs):
  • Food and Drug Administration (FDA) with some exemptions
  • Food Safety Inspection Service (FSIS)
  • National Highway Transport and Safety Administration (NHTSA)
  • Consumer Product Safety Commission (CPSA)
  • U.S. Department of Agriculture (USDA)

You’re ready to diversify your supply chain.

If the opportunity of saving up to 20% on duty fees isn’t quite enough to entice you, there’s the very real fact that supply chains are still slow. By sending your inventory to Canada, you can help to diversify your distribution network and possibly alleviate some of those delays. 

You’re ready for partners you can rely on.

Besides the support of ShipHero’s Fulfillment team, we also partner with GHY, a Canadian-based broker that understands the nuances of Section 321 and most importantly, the paperwork.

And, we have partners like Flxpoint, who can make managing Section 321 easier. With their intelligent tracking capabilities, Flxpoint can automatically identify and re-route orders that qualify for Section 321. You can set parameters and preferences to determine how your orders are fulfilled. For example, if a U.S. customer orders less than $800 and that product can all be fulfilled from Canada, then Flxpoint will send the order to ShipHero’s Canadian warehouse, maximizing your savings and order profitability. (This assumes you are fulfilling from Canada and the U.S. or another location.)

Section 321 Can Make the Difference

With more competition and rising costs, eCommerce brands need to find the options that will bring them greater success. By taking advantage of Section 321, your brand can save real money, increasing your revenue and making it possible to reach an even higher level of success. 

To find out more about Section 321, click HERE. To find out more about ShipHero’s fully outsourced fulfillment solution, talk to one of our Fulfillment Experts today.

Maggie M. Barnett, Esq. COO of ShipHero

ShipHero

About the author: Maggie M. Barnett, Esq., is the COO of ShipHero. She is responsible for planning and executing the overall operational, legal, managerial and administrative procedures, reporting structures and operational controls of the organization. Barnett’s greatest strengths are leadership, risk mitigation, change management and a passion for business transformation. She is known for her expertise in delivering operational excellence and an ability to provide guidance and mitigating risk. Her leadership of ShipHero is grounded in a servant mentality, always doing the right thing for our stakeholders. Her passion for ShipHero comes from the ability to drive operational excellence throughout the organization impacting the lives of our employees, customers, and partners.

Follow Maggie on Twitter & LinkedIn.

Sustainability is a Growing Concern for eCommerce Brands

Sep 23, 2022 | Blog

Recent research shows that customers today care more about sustainability than ever before. According to a report by global professional services company Accenture, 72 percent of respondents are choosing to buy more environmentally friendly products than they did five years ago. Further, more than 80 percent of those surveyed expected to purchase even more of these types of products in the next five years. 

While companies may have felt they had to choose between profits and sustainability environmental responsibility in the past, changing attitudes mean that being sustainable is just good financial sense today. Fortunately, ShipHero is here to help with sustainability and other eCommerce trends of 2022.  Unfortunately, sustainability in eCommerce is tough to achieve. However, it is possible to take incremental steps that will eventually bring about significant impact when you adopt certain practices. 

Keep reading to learn about the future of eCommerce and discover how we can help your brand achieve its goals.

Understanding Sustainability in the Business World

Sustainability is the future of eCommerce for 2022 and beyond. A broad term, business sustainability refers to ways of doing things that avoid depleting natural resources. The goal is to promote environmental balance over the long term while still meeting short-term needs and objectives for your company. In the past, eCommerce activities have had a negative impact on the planet, often resulting in additional packaging waste and greater CO2 emissions. The good news is there are ways for eCommerce brands to achieve improved sustainability without compromising when it comes to Client Support or product quality. 

eCommerce & Sustainability Pain Points The Future of eCommerce in 2022 and beyond 

When it comes to the eCommerce landscape of 2022, sustainability is driving innovation, and for good reason. In the wake of the COVID-19 pandemic, shoppers are increasingly viewing the world through a more global lens, and savvy brands are listening. Here are just a few reasons to focus more on sustainability in the coming months.

Return Packaging Costs

When it comes to returns, the benefits of sustainability extend far beyond client satisfaction. By adopting more environmentally friendly returns practices, brands can save money on packaging and shipping costs. Third-party returns management solutions are one of the top eCommerce technology trends because they allow brands to optimize the reverse supply chain while limiting the effect of returns on the environment. Additionally, the use of augmented reality in eCommerce can enable clients to try out different items virtually prior to ordering. For example, offering shoppers access to a virtual fitting room may help reduce returns on clothes and accessories over the long haul.

Unsold Inventory

Of course, it’s impractical to think your company can prevent returns all together. According to the National Retail Federation and Appriss Retail, retailers got back nearly 17 percent of the merchandise sold in 2021. Depending on your business type, creating a resale marketplace may enable you to promote sustainability while finding a new home for some of your gently used merchandise. Known as the circular economy, this system involves giving products a second life by listing them on resale marketplaces or peer-to-peer networks. It’s especially popular with buyers from Gen Z who may have less money to spend purchasing goods new.

Client Perception

Shopper satisfaction is just one reason that sustainability is among the top eCommerce trends of 2022. According to a study by the Sustainability Institute, online shopping results in more than 2 billion tons of waste on an annual basis. While companies are probably aware that Millennials and Gen Zers care about sustainability, they may be surprised to learn that these groups can have a significant impact on the buying decisions of their Gen X parents and Baby Boomer grandparents. According to a report by First Insight, 90 percent of Gen X buyers are willing to spend an extra 10 percent or more for products that are considered sustainable. With social media continuing to drive the sustainability movement, companies that don’t adopt new practices may find themselves getting left behind. 

Long-Term Price Increases

Inflation and supply chain issues are impacting consumers and companies alike, raising prices on everything from electric bills to computers. In the past, brands often held the false belief that being sustainable was more expensive. However, times have changed, and these days adopting sustainable practices like chatbots can actually save you money by reducing labor costs and boosting productivity. 

One of the biggest benefits of chatbots in eCommerce is that they allow brands to provide superior customer service without bloating budgets. Not only can chatbots answer questions at all hours of the day or night, but they also help companies save on the cost of power and office supplies. As a bonus, businesses can save time and money that would otherwise be spent locating, hiring, and training customer service workers without sacrificing the quality of Client Support. 

Sustainability is among the top eCommerce trends of 2022 and will continue to be a concern. By listening more closely to consumer wants and needs and prioritizing eco-friendly practices, businesses can do their part to help the environment without seeing their bottom lines suffer. 

Talk to our software experts today and learn more about how our warehouse software is built for eCommerce brands to stay safe and optimized for the modern supply chain. 

Aaron Rubin, Founder & CEO

ShipHero 

About the author:  Aaron Rubin is the Founder & CEO of ShipHero. He is responsible for planning and executing the overall vision and strategy of the organization. Rubin’s greatest strengths are leadership, change management, strategic planning and a passion for progression. He is known for having his finger on the pulse of ShipHero’s major initiatives, his entrepreneurial spirit, and keen business acumen. His leadership of ShipHero is grounded in providing excellent customer service that drives improved business operations. His passion for ShipHero comes from the culture and his ability to have an impact on the lives of employees, customers, partners, and investors.

Follow Aaron on Twitter & LinkedIn.