We receive a number of requests for quotation of warehousing and many more like that with just simple questions on importing to the United States. We put together a quick list of the 5 common questions companies have entering the US market, we hope this helps you keep a checklist to be successful!
1. Do I need to set up a US operation? (the most asked question)
*We are not attorneys and do not plan to be, and every company is different*
The short answer is: if you are just selling products online and through wholesale then opening your own company might not be the best answer. The choice for many companies who we work with is to sign a master distributor agreement with a company and have them handle importation of the product and master distribution for your company. This agreement also is needed for when you import a container of your product to the US market the customs officials will ask for a US registration number (FEIN) or Social Security number of who the shipment is going to. So having a company handle all of your fulfillment in the US is a great choice. This is a service that WestWind Group can handle and does handle for a number of our foreign clients. We act for many of our clients as a Master Distributor and US Agent of Record.
2. How do I calculate duties on my products?
In the United States the Customs and Border Protection provides that through The Harmonized Tariff Schedule this will give you a rough idea of your import duties. We recommend (and do this for all of our clients) to have the advice of a licensed customs broker in the United States to figure that out. Your duties must be paid on entry of the product unless you are using a foreign trade zone or a bonded warehouse. We would recommend that you have your US Agent (Master Distributor) be responsible for any duties or rates on your products.
3. Are there other fees and costs we should consider?
This will all depend on how you wish to sell and ship your product. Know your INCOTERMS of sale! If you work out an arrangement with your master distributor that they will handle the duties (INCOTERM FCA or CIF) and port charges. It makes the process much easier and they can communication in real-time with customs to clear your product.
4. What should we look for in warehousing?
A warehouse provider (or a 3pl) should be able to offer you list of services they offer that are common including; handling (in and out of warehouse and checking container contents), warehousing, pick and pack, and repackaging. Some of the time you will find services like threading, weaving, or simple assembly that can be included those are typically extra charges. Also if your product needs cold or freezer storage then be prepared to pay up to 3x the normal warehouse price. Simple warehousing can cost between $4-7 USD per pallet per month while cold storage can run anywhere from $18-34 per pallet per month. Most warehousing are now offering a FLAT-RATE Pallet price, if you have a number of pallets and will be storing those for a while.
5. Who handles returns or bad inventory?
Great question that we get less often than you think and something smaller companies would not think of normally. Returns are treated similar to pick and pack services (think about $5 per product to provide handling and shipping). This process is just like normal fulfillment and can be a hassle if you do not have the right warehouse and fulfillment center. Bad inventory is a different story, if the product has been damaged in transit (that is why an initial check is so important) you can file a claim against the insurance on the product, we cannot stress enough Get Insurance on your shipment. This is typically done by your US Agent and can be done easily with pictures and discussion with the insurance company. Make sure that the container insurance company has offices in the US to handle claims.
In summary: Shipping to the US can be the easiest process if you have the right team in place. Many companies use a Master Distributor to start selling and shipping and in a year or two actually open up sales offices in the US. Those companies still use their Master Distributor to handle all of the day to day product processes.
No responses yet