How to make the most of the raised US duty threshold: our advice for online retailers

Mar 15, 2016

In plain English, this means that a consumer purchasing online in the US can now buy items from another country, and spend up to $800 before having to pay duties on those items.

Raising the de minimis is quite a big deal for eCommerce providers who ship to the US from overseas: when consumers have to pay less duty, they’ll likely buy more goods.

This is tremendous news for UK retailers who sell and ship to the US, pure play (retailers who only sell through eCommerce) and multi-channel retailers alike.

The US is already a big market opportunity for UK retail: to illustrate, at wnDirect last week alone we shipped 60,000 parcels from the UK to the US. About 60-70% of these were B2C (mostly ‘fast fashion’ clothing and footwear) and the rest C2C parcels with goods sold on online marketplaces which can be anything from specialist sports goods, to health and beauty, to everything. The demand for UK goods is clearly there – so here are my top tips for how online retailers can make the most of the US de minimis increase:

1: Clearly explain the implications of the low value change to your consumers
Especially if your consumers pay duty on shipments themselves and were careful not to spend more than $200, they will likely see the increase in the de minimis as an opportunity to buy more from you.

2: If you aren’t yet doing much business with the US: start exploring the opportunities
Many online retailers hold back from doing much business with the US because of hurdles like duties, so this is a chance to re-explore the opportunities offered by the market.

3: If you’re already selling to the US: consider opening higher-value product categories to the market
Some retailers only sell part of their catalogue to consumers in the US as they don’t want to make the process complicated for consumers who buy dutiable items. Now is a good time to think about making higher-value goods available to your US audience.

4: Think creatively about how you can invest any duty savings back into products or shipping
If you plan carefully, you’re likely to be able to make savings as a result of the de minimis change. There are two main routes you can go down when it comes to making the most of these:

• Pass the savings down to your consumers immediately by pricing your merchandise more competitively
• Improve things for your consumers in the longer term by investing in an improved eCommerce delivery experience

5: Learn more about the different kinds of customs clearance for the US, and their implications for the eCommerce delivery experience
There are different options for clearing parcels that come into the US. For example Express Consignment Carrier Facilities (ECCF) and Container Freight Station (CFS). There are pros and cons for each, but there’s no one size fits all model, so it’s important to work with a partner you can trust to get you the optimum solution for your business. Consider also where in the US you want your parcel to clear, and how close those gateways are to “zones” for final mile delivery.

At wnDirect, we work closely with the customs brokers community to understand how we can best help online retailers benefit from optimised supply chains into the US – all to deliver a faster better and ultimately cheaper eCommerce delivery experience.

To find out more about how the US de minimis change could affect your eCommerce sales to the US, send us an email: export-experts@wndirect.com.