How ShipHero & Section 321 are Innovating Fulfillment from Canada

By:  Maggie M. Barnett, Esq., COO at ShipHeroLanded cost is perhaps the most immovable of all eCommerce prices. Expenses like shipping, taxes, duty/import fees all must be paid and all impact brands’ bottom line. It all adds up to make a $5 pair of shoes $70 in the store. Any chance eCommerce brands shipping from Canada have to move the needle on landed cost has to be considered. That’s where Section 321 comes in. While it’s not a new law to U.S. Customs and Border Protection, a recent increase from $200 USD per person per day to $800 USD per person per day has completely changed the equation for ShipHero’s Fulfillment clients and other eCommerce brands shipping from Canada.

Section 321 Explained

Let’s start with a quick explanation. Section 321 allows individual consumers to buy and ship up to $800 USD/per day from Canada to the United States. And it allows the items to be imported and shipped with NO duty fees (taxes). What this means for eCommerce brands is that their goods ship - duty-free - to U.S. consumers as long as individual orders total $800 USD/day or less. Section 321 works if importing goods from Canada into the United States. Because of ShipHero’s late-2021 acquisition of warehouses in Canada, ShipHero Fulfillment is now offering Section 321 from Canada.

How Section 321 Works

Section 321 has allowed ShipHero Fulfillment to leverage our newly expanded presence in Canada. With new options like zone skipping, we’re further exploring how to get products across the border and to consumers quickly.One concern of brands is that importing goods to Canada will lead to shipping delays and poor customer service. However, there is almost no lag time between receiving goods in Canada versus receiving them in the United States.

Here’s why:

• Goods are imported to Canada.
• These goods are then sent to one or both of ShipHero’s Canadian warehouses in Toronto or Vancouver.
• Goods are received and checked into inventory so that customers can order.
• A customer places an order and ShipHero picks, packs and labels the package with  a domestic shipping label same day.
• The same day, that package is placed on a truck and sent across the border into the U.S.
• The packages are delivered to the domestic carrier network of choice (i.e. UPS, USPS, FedEx).
• The package continues its journey through the U.S. and to the customer’s door.

There’s no room for delay. Whether your products are accepted into the U.S. or Canada, the time to receive them and put them away in the warehouse is the same. Why not send your goods just a little bit further north and go duty free?

How eCommerce Brands Can Save Money

The real cost savings for brands doesn’t actually come from Section 321, but as a benefit from importing goods to Canada. Canada has generous Free Trade Agreements and offers all brands that import foreign products to Canada the ability to enroll in duty deferral or duty drawback programs.These programs either waive or reimburse the duty fee a brand has to pay to import their goods.What kind of money are we really talking about? Here’s an example:Import to Canada

• • One pair of shoes imported from China to Canada
  • Value for Duty: $12.00
  • Duty Rate 18%: $2.16
  • $2.16 Savings (for just 1 pair of shoes!) Using Duty Drawback or Duty Deferral

Imagine how the savings add up once you start importing 100 pairs of shoes or 500. While the duty rate for shoes is 18%, rates on other products can range as high as 20-25%. This type of savings is almost unheard of and it directly impacts your brand’s bottom line.

How ShipHero Fulfillment Makes Section 321 Possible

So, here’s the best part for eCommerce brands, large and small, that want to adopt the Section 321 model - ShipHero Fulfillment does all the work. Our team works with clients to establish the best duty elimination or duty drawback program for them and that’s it. We make the process simple to set up.We also work with brands to get their products from Canadian ports to our warehouses in Toronto and Vancouver.Not only do brands get the outstanding client service they’re used to, but now, ShipHero Fulfillment is helping to directly impact their revenue by making it easier to import and ship products duty free.Global shipping options and dependency will continue to evolve as brands look for cheaper and more efficient ways to do business. Section 321 with ShipHero Fulfillment Canada is the first step in this new global shipping chain. If you’re new to ShipHero Fulfillment, please schedule a meeting today with our experts to learn more about how we can help you get your orders picked, packed and delivered with our fulfillment service. No setup fees, simply pay as you go. ShipHero works to ensure that organizations invest in the solutions that match their needs, to improve productivity, revenue and success.Click HERE to Schedule a Meeting TodayMaggie M. Barnett, Esq., COOAbout 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.Disclaimer: This post is solely for informational purposes and does not constitute legal advice. Programs are regulated and approved by the Canada Border Services Agency (CBSA) and U.S. Customs and Border Protection (CBP) and are subject to change.