Everything You Need to Know About Section 321
Section 321 may sound like a juicy tidbit of classified information… and it kind of is! For years, eCommerce business owners privy to the ins-and-outs of international shipping have been taking advantage of one of the industry’s best-kept secrets to virtually eliminate import duties and save big on tariff costs.
Today, we’re lifting the veil and revealing the why behind Section 321 and just how it can benefit your company in major ways. Grab a snack and keep reading for the exclusive scoop!
What Is Section 321?
Section 321 is a U.S. shipment type that’s used to clear U.S. Customs and Border Patrol, or CBP. With Section 321 by their side, businesses are able to bypass the duties and tariffs that are typically associated with shipping internationally. Basically, think of Section 321 as the money-saving tactic you’ve been waiting for. (And yes, it’s 100% legal!)
Okay, so what’s the catch? Can any business owner waltz in and reap the rewards of Section 321? Not quite, but it’s not a hard club to get into. Allow us to explain.
The number one qualifier for Section 321 is that your shipment must be valued at less than or equal to $800 (also known as the de minimis). Additionally, you can only send one shipment to one address per day. Multiple shipments are not allowed and may be subject to fine.
Besides that, you’re golden! Unless…
Who Does Not Qualify?
Although Section 321 is an excellent choice for most companies, there are a couple of exceptions. Fear not, however! ‘Tis a short list.
Section 321 does not apply to goods that require inspection, goods subject to Anti-Dumping Duty (ADD) and Countervailing Duty (CVD), and goods that are regulated by Participating Government Agencies (PGAs), like the Food and Drug Administration (FDA) and the U.S. Department of Agriculture (USDA).
And… that’s pretty much it! Not bad, right? It’s more than likely that, if you’re in the business of importing goods to the U.S., Section 321 is a viable strategy to cut costs and get the biggest bang out of your buck (or euro, or yen, or Swiss franc).
How Does Does It Work?
Let’s look at it step by step:
- You import inventory through a U.S. port, such as the San Diego or Los Angeles ports.
- Your inventory is shipped to its destination (read: warehouse), where it’s held in bond.
- When an order is ready to be fulfilled, it’s picked, packed, and shipped — tax and duty-free — back to the U.S.
Ta-da! But is it really that simple? Well, it depends. In theory, yes. In practice, it’s all about who’s doing the legwork. As an ambitious entrepreneur, the thought of taking this on by yourself has probably crossed your mind on more than one occasion.
While we’re huge fans of autonomy with a heaping tablespoon of spunk, the logistics of Section 321 come down to filing paperwork, navigating governmental regulations, and, of course, fulfilling orders at lightning speed and laser accuracy. In other words, a helping hand (or several) might be in your best interest.
How Can I Claim It?
Whether you’re doing this by yourself or with a 3PL, claiming Section 321 requires the party involved to submit an eManifest specifying that a U.S. shipment is on the way. This eManifest includes vital details like the number of goods, the consignee, the total value, and the origin of shipment.
Importing inventory can be headache-inducing, but, with Section 321, business owners can maximize their savings while minimizing stress levels. If that sounds good to you, we strongly encourage you to join forces with a fulfillment provider and make some serious magic.
Questions? Comments? We’re here to help. Drop us a line and we’ll get back to you ASAP!
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