If you import products into the U.S. for your ecommerce business, Section 321 should be on your radar. This customs provision can expedite the import process and save your company significant amounts on duties and customs fees. We’ll show you how Section 321 works, how to claim the exemptions, and what it can do for your ecommerce company.
What Is Section 321?
Section 321 is a U.S. Customs and Border Protection (CBP) provision that allows businesses to import qualifying goods duty-free. While the law has been around for decades, thanks to the Tariff Act of 1930, the rise of ecommerce has led more and more businesses to take advantage of the provision’s benefits. In short, Section 321 helps businesses import goods into the U.S. faster and more cost-effectively, bypassing many customs processes and fees. However, the CBP has rules and regulations that companies have to follow when using the provision.
How Does Section 321 Work?
Under Section 321, businesses can import goods with a retail value of $800 or less without paying duties or tariffs. However, the catch is that the entire order must equal no more than $800. While this sounds impractical for a lot of ecommerce companies, 3PL providers like Amigo offer specialized Section 321 services to help you maximize the benefits. Here’s how it works:
- You import goods in a U.S. port.
- Amigo picks up your goods and transports them in bond to our Mexico-based warehouse, bypassing customs processes and fees.
- When a customer places an order, Amigo picks it, packs it, and brings it across the border for domestic shipping — duty-free.
This allows you to claim Section 321 exemptions on qualifying customer orders worth $800 or less and still take advantage of domestic shipping rates and speed.
Why Is Section 321 Important?
Section 321 offers substantial benefits for ecommerce businesses, streamlining the import process and helping them significantly reduce costs. For small and mid-sized companies especially, those duties and tariffs can really add up, cutting into profits. With Section 321, ecommerce businesses can increase their profit margins and have more funds to invest in growth and development. Let’s look at a real-world example of how this works. Say, for instance, that you own an ecommerce business selling small home appliances. You import your air purifiers from China for $40 each and sell them for $80, but you pay multiple duty and tariff fees on every import, reducing your profit margin from 50% to 35%. Now, you could import only 10 air purifiers at a time and come in right at the $800 Section 321 exemption limit. But unless you have extremely limited sales, that’s likely impractical and would raise your sourcing expenses. However, using a company like Amigo, you could import any number of air purifiers you want, duty-free. Amigo would pick them up from the U.S. port, transport them to our warehouse in Baja, Mexico, then fulfill each customer order as it comes in, bringing orders across the border for domestic shipping. As long as a customer’s order is under $800, it qualifies for duty-free entry.
Section 321 Requirements and Eligibility
In addition to the $800 value limit, there are some additional requirements that businesses have to meet to qualify for Section 321 exemptions. Let’s start with the types of goods that do not meet Section 321 requirements, which includes goods that:
- Require inspection
- Are subject to the Anti-Dumping Duty and/or Countervailing Duty
- Are regulated by government agencies, such as the FDA or USDA
In addition, a person or entity can only claim Section 321 entry for one order per day. The rest of the requirements come down to paperwork. For some goods, you’ll need to submit an eManifest to the CBP stating that a shipment is inbound to the U.S. The eManifest must include:
- A Section 321 designation
- Country of origin
- Name and address of the shipper
- Name and address of the consignee
- Import of Record (IOR) and their IOR number
- Specific quantity, shipping weight, and retail value of the shipment
When you partner with Amigo, we take care of all these details to ensure that your orders comply with Section 321 standards.
How to Use Section 321 Effectively
Maximizing the benefits of Section 321 requires a clear strategy and complete understanding of the requirements, regulations, and processes. For most businesses, the biggest hurdle is the one order per day limitation. Many companies turn to specialized 3PL partners like Amigo to navigate the provision effectively. By entrusting logistics, fulfillment, and Section 321 compliance to Amigo, you can be confident that you’re using the provision to its fullest potential, optimizing your cost savings and supply chain efficiency.
5 Key Things You Should Know About Section 321 for Ecommerce
Here are the essential aspects of Section 321 that you should understand before utilizing it for your ecommerce business.
1. Duty-Free Imports for Low-Value Shipments:
Section 321 is designed to reduce import costs on low-value shipments, so qualifying orders must have a U.S. retail value of $800 or less. The CBP is quite strict when it comes to this rule, and they will use comparisons with similar products and/or retailers to verify your claimed value.
2. Simplified Clearance Process:
Businesses that take advantage of Section 321 can also reduce their import timelines and prevent delays through the provision’s simplified, expedited customs clearance processes. However, missing or incorrect information can lead to longer delays and additional fees.
3. Beneficial for Small Businesses:
Section 321 is especially beneficial for small businesses that sell low-value products, like many ecommerce companies. Since companies can only claim Section 321 once per day, larger businesses and those selling high-value goods often exceed the $800 total order value limitation.
4. Customer Satisfaction:
Section 321 can also help businesses increase customer satisfaction. When companies save on import fees, they can offer better prices. In addition, the streamlined entry process means fewer stockouts and faster order fulfillment.
5. Compliance is Key:
The CBP takes the Section 321 regulations seriously, and compliance is mandatory if businesses want to avoid additional fees and customs delays. It’s important to ensure you’re following all of the applicable requirements when claiming Section 321 exemptions.
How Can Section 321 Benefit Your Ecommerce Shop?
By leveraging Section 321, you can save significant amounts on import fees, freeing up funds to invest in business growth and expansion. It’s a game-changer for smaller ecommerce businesses that are looking to increase profits and take their operations to the next level. But the benefits don’t stop there. Section 321 can also help you deliver a better customer experience through lower prices, faster delivery times, and increased reliability. A 3PL partner like Amigo can help you integrate Section 321 into your ecommerce operations and get maximum value from the provision.
Learn About Amigo: Your Trusted Partner for Section 321 Import Solutions
Section 321 is a powerful tool that can help ecommerce businesses protect their bottom line, streamline their import processes, and increase customer satisfaction. But the provision also has some strict regulations and requirements that small businesses may find challenging to navigate. If you want to take advantage of all the benefits of Section 321 for your ecommerce company, Amigo is here to help. We offer a comprehensive range of 3PL services, and our experts will ensure that you’re using Section 321 to its full potential. With Amigo, Section 321 compliance and fulfillment is a breeze. Don’t let your hard-earned profits go to duties and customs fees — contact Amigo today!