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Business 101: A guide to import tax exemptions via Section 321


One of the tried and trusted ways to turn a profit is to buy cheap products from abroad and sell them at market value at home. A major stumbling block to this plan is import tax, which can reduce your margins and made importing goods not viable.

That’s where Section 321 comes in. Through a Canadian (or Mexican) fulfillment partner, you can have a duty exemption on your imports that will circumvent the legal requirement to pay tax. This allows you to keep your profits high while still giving your customers a great deal. Here we will delve a little deeper into what Section 321 is and how it can work for you to reduce import tax. By the end, you’ll have all the information you need to get started.

How does Section 321 work for import tax exemptions?

It involves using a Canadian-based company to help fulfill the services to your U.S. business. You can technically do this though Mexico too but with the quality of fulfillment partners available in Canada, it makes sense to look north of the border.

So how does it work? First, you redirect your shipments with your foreign goods via Canada. Then, the Canadians act as your intermediary to receive the order and send it through the U.S. border. Finally, the large shipment is broken into smaller orders to be sent out. Doing this allows you to get cheap imported goods under Section 321, removing all your tariffs. The payment required to your fulfillment partner is usually much less than the value of tax you’d ordinarily need to pay.

The Limitations of Section 321

The limit on a shipment is $800 coming into the USA from Canada. With the Section 321 statute, it does not matter where the products are coming from; it needs to be clearly marked as set up with regulations. If the aggregate retail value of your goods exceeds the $800 limit then the Section 321 exemption would not apply. The way to get around this would be to simply have a flow of orders that are always under the $800 mark.

The other limitation is that cost of fulfillment as their staff repacks the goods and ships them out to the USA address. As we mentioned, this will be a significant cost but overall you’ll be saving money due to the duty exemption.

How Can You Save money using Section 321

Brand fulfillment is an excellent way to distribute your products and control your profit margins. In addition, delivering your goods without any hiccups helps fulfill your brand with excellent customer relations.

  • Helps with Amazon FBA prep services as you get access to a wide selection of Amazon marketplace to fulfill orders without headaches.
  • You get access to domestic, cross-border shipping that is faster and cheaper.
  • You get B2C orders providing you with direct-to-consumer service and same-day deliveries. Plus, you get B2B fulfillment as you can distribute your products to retailers in the U.S.
  • You receive a dedicated warehouse that sends and receives returned customer orders with excellent customer care.
  • You can beat your competition by focusing on your business and the logistics taken care of. Furthermore, you can avoid unnecessary delays when shipping directly from China.

Tips to Help You with Import Tax Exemptions Under Section 321

You need to find a reliable company to help

In Canada, several companies are offering you the Canadian fulfillment service. Some are great, while others are not. We suggest you look at a business offering it as a primary service and not an add-on.

The relationship that you have with your fulfillment partner is going to be vital so you want to complete plenty of research before you get started. You need to find a partner that will not only give you good rate but will care about your customer’s needs.

Make sure products are classified as Section 321

If you order products not exceeding the $800, it can gain a Section 321, but there are exceptions. If goods need an inspection for release, they will not achieve classification regardless of the value. The same applies to goods subjected to countervailing and anti-dumping duty and considered quota-class products.

Furthermore, any goods regulated by the Safety Administration, FDA, National Highway Transport, Food Safety Inspection Service, United States Department of Agriculture, Consumer Product Safety Commission will not be suitable for the Canadian fulfillment and will not gain Section 321. Before contacting a fulfillment party, it’s a good idea to check that the goods will be exempt as otherwise it would be a waste of time and effort.

Keep a constant channel of communication open

When you rely on another person or a store to ship the goods, you need to know what stock you have available at all times. You also need to advise them of your shipping needs at regular intervals. So your communication is a priority if you want your business to flourish.

Makes some shipping cost adjustments

As you will no longer pay import tariffs, it helps to increase your shipping costs, as Canadian fulfillment is also a business. Once your import costs are removed even while using the service, you can pass your savings to your clients. Alternatively, you can pocket the import savings to increase the shipping costs to help increase profit.

Start saving now

If you are losing money with importing costs to the USA, now is the time to change it. Get involved with the fulfillment provided by the Canadians under Section 321. You will not be disappointed.


With Canadian fulfillment and Section 321, you get an ideal way to help reduce your import costs. Furthermore, it helps boost your small business’s profitability. The best part it saves you headaches with delivering the product to your customer’s door.

Whether you want to believe it or not, the import costs are going to affect you through increased competition, profits, and growth. So instead of your competitor increasing their profits, why not allow your business to grow long term instead. Join a company that provides you with the Canadian fulfillment to receive goods in the U.S. under Section 321 today.

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Our women don’t want to settle for anything but the best. They understand that success is a journey involving personal growth, savvy optimism and the tenacity to be the best. We believe in pragmatism, having fun, hard-work and sharing inspiration. LinkedIn

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