Forum Moderators: buckworks
Now he is going to move to Canada and wants to keep US as his major market. Since the international shipping is very expensive and complicated, he plans to move to Canada-US border, such as one of border towns between Canada Vancouver area and US Seattle area. He takes orders from website as usual, makes US domestic shipping lable for postal service, UPS or FedEx and packs the shipment in Canada side, and drives to post office/UPS or FedEX station in US side to drop the packages. That will make the order fulfillment simple and cost effective.
Is it feasible? Is it prohibited by border administration? If your business base is in Canada, how do you deal with the shipment to US in an effective way?
Make sure your friend looks into these future changes, and doesn't just look at the current situation.
Yes, it is completely feasible. There are thousands of Canadian companies that ship everyday to the US. In fact, the Canadian economy revolves around shipping to the US (and that is not overstating it).
You will only need a passport for land crossings starting in 2008.
If you are going to drive your goods to the US market, you will require a Customs Broker. It will cost you about $40.00 for each time you cross the border with commercial goods. Looking in the Yellow Pages, or do research online will help you find the brokers who are at the border crossing you plan on using. You will be required to have the goods pre-cleared before you hit the border, or it is a massive fine by US Customs. The brokerage firm can help you with all this.
You can send goods with Fed Ex Ground and use section 321 of Nafta. Fed Ex can explain that to you. But your goods must have a wholesale value of less than $200.
There are definately hurdles in shipping to the USA in a post 9-11 world. But many a successful business can manage the issues, do not be afraid.
Plan 1: Like what I said. My friend moves to Canadian border town and crosses border every day to drop the shipments in US side. Most of packages are just small postal parcels, which have no problem to be contained by USPS Priority Flat Rate Envelope. UPS/FedEx is used only for 1-day, 2-day and 3-day express packages. So my friend will use US postal service most. The business is not so big, and he has tens of packages per day (less than 100), and there is no truck needed at all, he can drive his car to drop those small packages. In this situation, does he still need Customs Brokers like Rugles mentioned? Moreover, can he (he is not an US citizen) open a PO box or UPS box in US side to receive all RMA returns from US customers?
Plan 2: Like Fiu88 said. My friend keeps his shipment fulfillment facility in US and he controls all shipments remotely. The US facitlity is responsible for RMA as well.
Which one is better? Plan 2 seems more convenient but costly. If it is no problem for cross-border shipping, plan 1 should be better, but what kind of policies will be changed in a post 9-11 world.
BTW, plan 2 could have tax implications (IRS). I would serious look into some kind of solution that allows him to focus on his core business rather than just on shipping.
All commercial shipments (which is what your friend is doing) require the proper paperwork. Does not mater if you are walking, driving or flying across the border.
The government will want the tariff numbers, country of origin (where its manufactured) and the name of the recipients. They will apply duty to any goods that do not come under NAFTA.
If you ever drive across the border in car, they always ask you if you are bringing anything into the country. This is when your friend will discover the joys of importing commercial goods.
If you lie and they catch you in the lie, your car will be searched each and every time he crosses the border because he has been tagged as a smuggler.
The government wants their money, lying about importing goods into the USA is in effect, dodging taxes. They do not look kindly at such behavior.
Like I recomended, call a broker. It really is not as scary as I make it sound to just comply with the law. :-)
That is the way to go for a lot of people. These border towns often have a couple of warehousing/fulfilment operations made for companies operating on both sides of the border.
