American Fulfilment Services
Thinking of expanding your exports and using a US fulfilment service to market your products in the USA?
It might be a great idea, but there are challenges ahead and if you don’t identify, understand and overcome them, your plans might be in jeopardy!
Many exporters to the USA are attracted to the idea of using American fulfilment services.
It is easy to see why – you already use similar sales and distribution systems to good effect elsewhere, so why not go further and exploit the huge potential in America?
One advantage is that you don’t need to find a US distributor. You can sell direct to whoever you want in the USA, through an e-commerce platform, and the fulfilment service based there will deal with all the order processing, logistics and sales admin requirements.
But what you may not be aware of is that US fulfilment services usually specify in their conditions that the trader (ie. you) needs to deliver the goods to a specified US warehouse on DDP (Delivered Duty Paid) terms. You should certainly check this with any fulfilment service providers you approach! This might not seem important, but it means that you then become responsible for US import Customs clearance, and US import duties, as well as all freight costs and risks of carriage through to US warehouse door.
For anyone needing to deal with US import Customs clearance, you then need to find, appoint (and give Power of Attorney to) a US Registered Customs Broker and to pay for that Broker’s services and for any US import duties due on the goods.
As most fulfilment service providers state they won’t act as the Importer of Record this can cause further difficulties for brands trying to enter this market.
Firstly, because you then need to find a US registered Customs Broker as the fulfilment service generally won’t do so.
Secondly, because when goods arrive in the USA, the Registered Customs Broker must state the name of the US company that will act as the Importer of Record, when they submit an import clearance declaration to US Customs.
If the fulfilment service provider won’t accept that responsibility (often the case), then what can you do? It might be possible to find a US company that is prepared to act as the Importer of Record, but this can be risky and this is what you were trying to avoid in the first place, by using a fulfilment service and bypassing the need for another party to be involved.
One solution offered by the US government, that many exporting companies to date have opted for, is to register as a Non-Resident Importer. In doing so, your registered details can be included in the import clearance declaration submitted to US Customs by your Registered Customs Broker for each shipment that arrives.
Exports of Foods, Beverages & Dietary Supplements
Further complications can arise, specifically for imports into the USA of Foods, Beverages or Dietary Supplements. This is because regulations imposed by the US Food & Drug Administration (FDA) also come into play.
The FDA requires US importers of foods, beverages and dietary supplements to establish Foreign Supplier Verification Programs (FSVPs) in order to verify that their foreign suppliers comply fully with FDA regulations governing food safety processes and procedures.
Registered Customs Brokers dealing with the import Customs clearance of foods, beverages or dietary supplements must inform US Customs which company is acting as the FSVP importer for consignments of foods, beverages or dietary supplements. If – as in the case of goods consigned to fulfilment centres – there is no Importer of Record, no FSVP Importer, no US buyer (i.e. a US company hasn’t issued a written purchase order) or no US owner in evidence at the point of entry of the goods into the USA, then you, the exporter, are deemed by the FDA to be the continuing owner of the products and you must appoint an FSVP Agent – an American company that takes on the responsibility of verifying the food safety compliance status of foreign manufacturers or processors.
This is clearly problematic.
At Bolst Global we can signpost you to FDA Compliance Specialists – who may act as FSVP Agents on your behalf – and to Registered Customs Brokers, who can deal with US import Customs clearance on your behalf and assist you with Non-Resident Importer registration.
If you are looking to export to the USA and would like to know more about the support and advice we can provide, then please contact us using the form below.
