Maybe you’ve already heard of Section 321 or maybe you’re hearing about it now for the first time, but we’re here to tell you it’s a must-have for most ecommerce businesses importing goods into the United States. What’s so special about Section 321, and is it right for my business? You’re about to find out!
What is Section 321?
Section 321 is a U.S. shipment type that is used to quickly clear small packages (like direct-to-consumer ecommerce orders) through U.S. Customs and Border Patrol (CBP). So, rather than importing your goods in bulk, paying huge import fees, and then fulfilling orders from a U.S. fulfillment center, you store them at a fulfillment center just outside the U.S. and ship them into the U.S. as your customers order them.
When a customer places an order lower than $800 in value (which, let’s face it, most ecommerce orders are), Section 321 speeds up border crossings and eliminates the import duties and tariffs typically associated with imported goods — and it’s 100% compliant with CBP regulations. Naturally, this service is brought to you by your friendly neighborhood 3PL, ShipMonk, and the magic of our Mexico fulfillment center.
How it Works
- You ship inventory to a U.S. port, such as San Diego or Los Angeles.
- Your inventory is shipped a few miles over the border to ShipMonk’s fulfillment center in Tecate, Mexico, where it’s held in bond for up to 18 months.
- When a customer places an order, it’s picked, packed, and shipped — tax and duty-free — back into the U.S.
- Orders and inventory are synced and tracked seamlessly via the ShipMonk app.
- Packages are routed to destinations in the U.S. using ShipMonk’s extensive network of shipping carriers, premier services and delivery times. Delivery times range from three to six days.
Benefits of Section 321
The benefits of Section 321 are so huge you’ll wonder why no one told you about this before. (Hint: subscribe to our blog, and you’ll always be in the loop!)
- Your business no longer has to pay import duties for inventory entering the U.S. via Section 321. This reduces the landed cost of each unit shipped and increases your profit margin on these goods.
- Your customers won’t see any import duties and tariffs at checkout, nor will these costs be baked into the price they pay. You can pass on the savings and increase conversion rates. Win-win!
- Customer orders quickly clear customs, since no duties or tariffs are due.
- Your ecommerce business still enjoys the same great service from ShipMonk, including help with freight shipping, discounted shipping rates, 2-Day delivery, and our Virtual Carrier Network.
- You can still distribute inventory to any of our U.S. fulfillment center locations if you choose to do so. Imported goods can be fulfilled from our Mexico location, while U.S. goods can be fulfilled from a location closer to your customers.
- We handle all the paperwork, navigating governmental regulations and, of course, ecommerce order fulfillment at lightning speed and laser accuracy.
Is Section 321 Right for Your Brand?
At last, we come to the heart of the matter — does your business qualify? If you can answer all of these questions with a big “YES,” you are golden.
- Are some or all of your goods coming from a manufacturer or supplier in another country?
- Are your customers’ orders always less than $800 in value?
- Do your products qualify for Section 321? (Goods that do not qualify include any that are subject to Anti-Dumping Duty (ADD), subject to Countervailing Duty (CVD), in need of special **required** inspection, or regulated by Participating Government Agencies (PGAs), like the Food and Drug Administration (FDA) and the U.S. Department of Agriculture (USDA).)
- Do you partner with a 3PL that has a near-shore fulfillment center in Mexico that is set up for Section 321 fulfillment?
The only other qualifier you need to be aware of is that you can only send one shipment to one address per day. Multiple shipments to the same customer are not allowed and may be subject to fine. If everything else checks out, you’re good to go!
Save on Exports Too!
We would be remiss not to mention our other international fulfillment center locations designed to help our ecommerce clients export goods to customers in Europe, Canada, and the UK. When your brand is ready to scale internationally, we can help you do it as efficiently and profitably as possible. You can leverage the power of ShipMonk’s fulfillment platform to manage your inventory, no matter how many fulfillment centers you’re using or where they’re located. With ShipMonk’s Virtual Carrier Network, you select the speed at which you want your package delivered, and we handle the rest. Utilizing ShipMonk’s European location and DDP (Delivered Duties Paid) shipping can save European customers an average of 45% on shipping costs, and cut shipping time from 14 to 2-5 days.
Ready to Get Started?
If your fulfillment center can’t help you with 321 Fulfillment, contact ShipMonk. We’re happy to talk you through the process. Get a quote, and see just how much you’ll save and how fast you can grow!