SHIPPING TO THE UNITED STATES OF AMERICA
The United States is home to one of the world’s biggest economies and the second largest eCommerce markets in the world. Not all eCommerce purchases in the United States is local, with around one-third of them being cross-border. This represents a great opportunity for enterprising international merchants to capitalise on, particularly if you’re based in Southeast Asia.
It’s still ideal for your shipment to sail through customs, reaching your US customers safely and on time through understanding what can and cannot be imported along with knowing any customs hurdles you should be aware of.
| Country ID | US |
| Capital City | Washington D.C. |
| Official Language | English (U.S.) |
| Currency | United States Dollar (USD) |
| Population Size | 332 million |
The United States of America’s eCommerce market value is US$ 792 billion in 2020 and expected to grow to US$1.648 billion by 2020 – a more than double increase between 2020 and 2025, as estimated by eMarketer.
Much of this growth can be attributed to the changes in lifestyle necessitated by the COVID-19 pandemic in late 2019 and early 2020. Adapting to spending more time at home such as adapting their schooling, working life, and leisure time to at home activities along with maintaining safe social distancing were some of the main reasons for eCommerce’s massive growth in this period.
You can find more details on this as well as our references in our USA eCommerce landscape article.
This is a living page that will frequently be updated with insights about:
- The United States’ Customs Clearance Basics
- United States of America’s Restricted and Prohibited Goods and de minimis rate
- Step-by-step Breakdown of How to Ship to the United States
- The United States of America’s eCommerce Insights
Sources: Digital 2021 US | eMarketer
PART 1: CUSTOMS CLEARANCE IN THE UNITED STATES
1. The United States’ De Minimis Rate, Informal and Formal Entries
The United States’ de minimis rate is USD 800.
Goods are valued using the FOB (Free On Board) valuation method which means the value of goods not including freight, insurance or other shipping related charges. In the United States, this is known as the price paid or actually payable.
The de minimis rate, when it comes to customs clearance, refers to a specific monetary value below which an import into the country will either be duty-free or be charged less duties and taxes.
In the United States, their de minimis arrangement is referred to Section 321 of the Tariff Act of 1930. If you’re shipping with Janio your shipment will go in via Entry Type 86 customs clearance, which means that goods valued below their de minimis rate of USD 800 enters the country duty-free.
Shipments above this amount will be subject to import duties and customs taxes depending on the country of origin and the type of goods. Countries with free trade agreements with the USA get preferential rates. To see how much tariffs would be levied on your type of goods for larger shipments, you can check out the Harmonised Tariff Schedule 2020 by the US International Trade Commission.
Shipments are treated as formal or informal shipments depending on their chargeable value. The following are the types of shipments and value cut-offs:
- Informal entry – below USD 2,500
- Eligible for Section 321 (de minimis) entry – below USD 800
- Formal entry – above USD 2,500
Shipments that are above USD 800 require merchandise processing fee (MPF) payments. For informal entries, the MPF amount would be:
- USD 2 for automated entries
- USD 6 for manual entries not prepared by Customs and Border Protection (CBP)
- USD 9 for manual entries that are prepared by Customs and Border Protection (CBP)
eCommerce purchases should usually be automated entries and pay an MPF of USD 2.
Shipping partners like Janio can advise you on the kinds of documents needed for your types of shipments and also the charges that you’ll need to prepare for. It’s ideal to ship via DDP (delivery duties paid) where the duty charges are paid in advance, which can help reduce the chances of your customers getting unpleasant surprises in the form of high customs charges.
Sources: Customs and Border Protection – Customs Value | Customs and Border Protection – Entry Type 86 Frequently Asked Questions | U.S. International Trade Commission
2. Restricted and Prohibited Goods
Below is a non-exhaustive list of items that require licenses before going through customs clearance into the United States of America, also known as restricted items:
- Health and Beauty
- Nutritional and Dietary Supplements
- Medicine and Drugs
- Cosmetics
- Dental Instruments (including toothbrushes)
- Veterinary Products (including pet medicine or vitamins, dental instruments, etc)
- Medical Items and Pharmaceuticals
- Contact Lenses and Eye Wear
- Consumer Electronics
- CD-ROMs, CD Players
- Computers with CD/DVD drives
- Microwave Ovens
- Televisions with cathode ray tubes
- Infrared Products
- Batteries and Products with Batteries
- Chemicals
- Tobacco Products
Prohibited items that cannot be imported into the market:
- Drugs and Medicine prohibited by the FDA
- Distilled spirit absinthe (except certain diluted brands)
- Merchandise from embargoed countries
- Items made with Dog and Cat Fur
- Counterfeit Trademark and Copyrighted Articles
Some Items are also tougher to import via B2C into America, including:
- Live goods
- Perishable goods (foodstuff e.g. meat, fish, vegetables, fruits)
- All liquids
- Vaporisers and shisha molasses
- Chemicals and Biologicals (bacterial cultures, excretions, fungi, arthropods, mollusks, viruses, or vectors for research, biological or pharmaceutical use, alcohol/absinthe, soil)
- Narcotics and psychotropic substances, drug paraphernalia, controlled substances
- Coins, bank notes and other valuables, such as gold
- Weapons/ Firearms
- Tea
This list may change depending on government regulations. Visit the official customs page for the latest information.
You can get more information on the USA’s restricted and prohibited items and get their references here.
PART 2: HOW TO SHIP TO THE UNITED STATES FROM VARIOUS COUNTRIES
Shipping from one country to another, be it an eCommerce delivery or a full container moved via sea freight follows a general set of steps:
- First Mile Delivery in the Origin Country
- Origin Country Customs Clearance
- Mid-mile or Freight
- Customs Clearance in the United States
- Distribution and Last-mile delivery in the United States
You can click on any of the links above to find out more about each step
Freight or Mid-mile to the United States
When it comes to freight options, shipping your goods to the United States can generally be done in two ways – air freight and sea freight. For instance, if you are shipping with Janio from Singapore to the United States, your shipment will land at John F. Kennedy Airport in New York.
Costs will be based on the greater between volumetric weight and actual weight.
For merchants shipping B2C parcels, air freight is the faster option, especially if you don’t have a consistent order volume and need your parcels to reach the destination country quickly.
On the other hand, sea freight is generally more cost-effective for shipping in bulk. However, it is slightly slower than air freight. When managing your inventory, you’ll need to take into account the estimated delivery date so that you can plan out your supply chain accordingly.
PART 3: UNITED STATES OF AMERICA’S ECOMMERCE INSIGHTS
Why the U.S.? Key stats of the U.S’s eCommerce market
Quick Statistics on USA’s eCommerce Market:
- Population – 332.0 million people
- Total Consumer spending
- USD 12.5 trillion in 2020 vs USD 13 trillion in 2019
- B2C eCommerce Sales Total Revenue
- USD 792 billion in 2020,
- Internet Usage Statistics (as % of USA population)
- Internet Penetration – 90%
- eCommerce Penetration – 77%
- Social Media Penetration – 72.3%
- De Minimis Rate – USD 800
Major Factors Driving eCommerce In the United States of America:
COVID-19 accelerated eCommerce adoption beyond lockdowns
- Online sales jumped from US$ 598 billion in 2019 to US$ 861 billion in 2020 according to Digital Commerce 360
- The height of the lockdown and shelter-at-home was between March and April 2020.
- McKinsey found that 70 – 80% of American shoppers who tried a new shopping behaviour intended to continue it beyond the pandemic.
Shoppers show signs of pent up demand, but Delta variant fears and drying stimulus cause some concern
- 2021 was initially seeing a retail recovery which was attributed to stimulus payouts and increasing vaccination numbers
- However, this hit a snag around August 2021 with rising COVID cases due to the spread of the Delta variant
Younger shoppers lead the way in eCommerce purchases and buy based on purpose-alignment and value for money
- Many US shoppers switch brands in search of better value for money, purpose-alignment, quality and novelty
- Younger shoppers and more affluent shoppers were showing more interest in non-essential products like fashion
One-third of US shoppers purchase cross-border and many US shoppers trust global or local brands
- Two of the most popular markets that US shoppers buy from include China and the United Kingdom
- One of the primary drivers for US shoppers purchasing cross-border is better prices
Key shopping events were increasingly moving online
- 2020’s Black Friday weekend shattered online sales records
- Offline stores were quieter, with many brick and mortar stores seeing far less foot traffic during the weekend
We dive much deeper into these four factors in both our downloadable United States eCommerce guide and also our overview on the U.S.’s eCommerce drivers.
Next: United States 2021 eCommerce Consumer Snapshot
Sources:
Brookings | JP Morgan | Digital Commerce 360 | Practical eCommerce | Oberlo | Digital 2021 U.S | Digital Commerce 360 | McKinsey Consumer Sentiment in the US during the coronavirus crisis | McKinsey – The great consumer shift: Ten charts that show how US shopping behavior is changing
United States 2021 eCommerce Consumer Snapshot
Top Reasons for United States Consumers To Switch Brands
McKinsey held a survey to find out United States shoppers’ top reasons for brand switching behaviour. These reasons were then combined into an overarching reason as covered below:
Value
Value’s reasons included better value, better prices or promotions, better shipping and delivery cost and larger package sizes. Considering the United States’ current uncertain economic climate as of Q3 2021, there are likely more consumers who are tightening their belts. Around 40 per cent of US consumers have cut back on spending on nonessentials, and are just focusing on basic necessities like groceries and household supplies.
On the other hand, searching for good deals is also a key reason why US shoppers buy from overseas too., Around a third of US eCommerce purchases are cross-border (US$ 270.1 billion out of US$ 795 billion). The top 2 countries they buy from are China (49%) and the United Kingdom (12%). Just like back in Southeast Asia, price competitiveness is one avenue to factor into your US eCommerce campaigns.
Purpose Alignment or Purpose Driven
Purpose driven reasons include buying products that are more sustainable or better for the environment, buying from a company that shares their values, and buying from a company that treats its employees well.
In terms of sustainability, Forbes found that online searches for “sustainable fashion” tripled between 2016 and 2019 which they credited to Millennial and Gen Z consumers. The demand for more sustainable options led to established brands adapting their products to include waterless products, upcycling, carbon neutrality or refillable packaging solutions, Mintel reports.
The State of Fashion 2021 mentions that “54 per cent of consumers believe brands ‘have an important role to play in social conversations about issues like #MeToo and race relations’…66 per cent of consumers would stop or significantly reduce shopping at a brand if they found it was not treating its employees or suppliers’ employees fairly.”
Quality and Novelty
The final two reasons above include the following statements: Better quality, products that are natural or organic and trying products they’ve never tried before or going for changes from their normal routine.
Putting it all together, what this means for merchants is that there are multiple ways you can position your products depending on who you’re targeting. Price competition is good for the mass market, but you may also be able to attract other audiences by catering to their sense of purpose, sustainability or just pitching yourself as an interesting alternative.
Next: Popular eCommerce Product Categories in the United States
Sources:
McKinsey – Consumer sentiment in the US during the coronavirus crisis | McKinsey – The great consumer shift: Ten charts that show how US shopping behavior is changing | Paypal | Beroe | Practical eCommerce | Forbes | Mintel | USA Today
