Use Direct Injection and Duty Drawback to Offset Cross-Border Costs
With Section 321’s de minimis exemption suspended, fulfilling orders from Canada still has a path to cost savings — just not the one described above. Direct injection consolidates shipments into a U.S.-based hub before final-mile delivery, cutting per-parcel costs compared to shipping full-price international parcels one at a time.
Duty drawback programs let you reclaim duties and taxes on goods that cross back over the border, recovering cost you’d otherwise absorb as a write-off.
And that’s not the only benefit to working with a Canadian ecommerce fulfillment company. The right fulfillment and logistics partner that’s based in Canada can help American retailers avoid cross-border roadblocks including duties, fees and long shipping times when expanding into these new ecommerce markets.
How do I start fulfilling ecommerce orders and shipping to/from Canada?
Apply for a Business Registration Number to import goods into Canada.This is a crucial first step; if you’re looking to start expanding your ecommerce business into Canada, you first need to register for an import-export program account with the Canada Revenue Agency (CRA).
Registering for this account will get you a business registration number with the CRA — a unique 9-digit number that defines your business. Your program account comprises 2 letters and 4 digits that are then attached to your business number.
This number is key, as it’s used by the Canadian government to process customs documents at the border and release your products without delay. Learn more about getting your business set up with a Business Registration Number.
Then, work with a Canadian fulfillment partner
For American brands looking to expand their order fulfillment and shipping to Canada, while also taking advantage of Section 321 for US-bound orders, working with a Canadian fulfillment partner is a sound, strategic move!
Eliminate customs duties costs and import taxes:
- Import taxes, duties, tariffs and the long shipping times and freight costs that can deter Canadian customers become worries of the past with a fulfillment and logistics partner that’s based locally.
- Reduce landed costs on goods coming into the USA using direct injection and duty drawback, by fulfilling and shipping from Canada.
- Plus, as an American business working with a Canadian company, you can take advantage of lower overhead costs by paying in CAD as opposed to USD.
Ensure that your customers receive their orders quicker:
- With an ecommerce fulfillment partner that’s based in large Canadian cities, you get access to millions of potential customers and can significantly reduce your shipping times.
- For your American customers, the experience will feel just as streamlined as it would with a fulfillment company based in the USA, as the right Canadian partner can combine sound logistics, proximity to the border and highly-developed carrier relationships to keep shipping times down.
Final Thoughts
Working with a Canadian fulfillment and logistics partner allows American brands to effectively avoid the common challenges that come with cross-border shipping including duties, taxes, long shipping times and more. And, American retailers can leverage Section 321 to avoid fees on imported goods for their customers in the USA.
