Importing goods can be a great way to expand your offerings to customers, and this is particularly true if you locate a great manufacturer. It is, however, critical to be aware of rules, regulations, costs, and general procedures of importing from overseas.
Before you order any product be sure to read through our guide so you’ll be prepared for the challenges ahead.
Step 1. – Make sure you know government rules and import laws.
You don’t need to be a legal expert but you’ve gotta know some basics and the US government has quite a few rules when it comes to importing goods into the US. The good news? There are some great online resources to help you grasp some of these rule structures and concepts.
The US Customs and Border Protection (CBP) is the agency responsible for monitoring imports/exports and their website has a great overview. USA.gov has a similar resource and while there are some overlap, reading both is probably wise.
Step 2. – Understand what permits you will need when importing goods
Generally, a license is not required when importing goods in to the US, but depending on what you’re bringing in you may need to get a permit or two.
There are some goods that are restricted for import into the US. You can review the full list here, but a lot of these are common sense.
You’ll be prevented from bringing in dangerous chemicals, pharmaceuticals, narcotics, certain foods, weapons, tobacco, and some biological materials. Industrial chemicals are also highly restricted. But when in doubt, you should and can always contact the CBP office nearest you.
Also, it will serve you well to understand rules of origin for goods you want to bring into the country.
Step 3. – Figure out if your goods will be subjected to quarantine.
If you’re bringing plants or animals (or animal products) into the country, there is a good chance your items will need to be quarantined. For the full description of quarantine rules in the US, click here.
Step 4. Understand taxes and tariffs
As you are likely aware, you’ll need to pay taxes or duties on goods you import. Spend some time familiarizing yourself with the rules.
- Learn how to value goods for customs duties and taxes.
- Find out what taxes you will owe on imported goods.
- Get the correct tariff classification for your goods.
- Determine if excise duty is owed on alcohol or tobacco products.
- You’ll also need your business’s tax ID number, contact the IRS if you are unsure about this.
Step 5. – Understand the charges for import duty, and goods and services sales tax
Here are some estimated fees and charges you’ll likely need to pay.
If your goods are valued at over $1,000 you will almost surely have to pay duty and tax on them.
- Entry costs and examination fees – customs will often charge between $125 and $215 for goods to be examined.
- A customs duty rate is charged as a percentage of what you paid for it in the first place. Rates can vary quite a bit, but a ballpark is 1-10% — for more information check here.
- Many countries have a goods and services tax (GST), the US does not — so you won’t need to worry about that.
These are just a few examples, and what you end up paying can vary greatly depending on what the good is and in what quantity you are importing. Free trade, agreements, excise tax and a variety of other factors come into play. Check with your local CBP office to be sure.
Step 6. – Take full advantage of concessions & exemptions
Some goods are eligible for an exemption or concession (an elimination in duty for the importer). For more information on exemptions check here. Often the limits (dollar amount) and the number of things that are eligible for these fee-free benefits is quite low, but it never hurts to check.
Step 7. – Understand the basics of free trade agreements.
The US has entered into a number of different trade agreements with other countries around the world. They have free trade agreements with over 20 countries and are part of the controversial Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (T-TIP).
These deals do many things, but they are meant to increase cooperation, reduce barriers, and lower tariffs thereby promoting international trade.
To understand some of the implications of FTAs in detail you can click here.
Step 8. – Determine what other costs there may be when importing goods
You’ll likely need to prepare for a few other costs:
- The initial purchase price (of course)
- Shipping and logistical costs (both international and domestic)
- Freight handling charges applied by ports
- Cost to insure goods
Step 9. – Make sure all your goods are labeled correctly
For an import process to go smoothly you must have your goods labeled properly. This means the country of manufacture and origin, an accurate description of the goods, and sender’s details and a recipient’s details. These labels need to be in English, they need to be legible and displayed in a prominent location. For more specifics on labeling requirements, check this here.
Step 10. – When in doubt, double check with the proper authorities
Importing can be a complicated business, so if you run into a question you can’t answer, check with the authorities first. This will head off any trouble you may have and give you peace of mind. Full contact details for the CBP can be found here.
This guide is meant as a basic informational tool and does not constitute professional advice or account for all contingencies.