Thinking about exporting goods or services to the US? In this comprehensive guide, we are going to discuss the key opportunities for global suppliers and non-US manufacturers to export to the US. From the most in-demand goods and services, to an overview of US customs clearance, duties, tariffs and regulations for export businesses. By the end of this article, you will feel more confident when supplying the US market and will be able to find and build strong international business relationships with US buyers.
Despite major disruption around the world due to the ongoing global pandemic, many Asian countries have now recovered from early 2020 economic issues. And as we move swiftly towards the new year, there are exciting opportunities for export businesses from China, Pakistan, India, Vietnam, and many other countries to expand and supply goods and services to the US market.
If you are a new export business, or this will be the first time you serve US buyers, you must be aware of the import-export regulations, tariffs, and other challenges that you may face along the way.
As experts when it comes to international trade, we are here to guide you, every step of the way.
Who will benefit from this export business guide?
Our comprehensive guide to selling and exporting goods to the US market has been designed for：
- Non-US manufacturers
- International wholesalers
- Export businesses new to the US market
If you want to start selling goods to US buyers and break into the US market to make a profit, this guide is for you!
We are going to cover the following topics:
So, let’s make a start with key opportunities to export goods to the US market.
Key opportunities to export to the US
Being the birthplace of Amazon and eBay, the US market provides one of the best opportunities for growth as an international manufacturer or supplier. US buyers are already familiar with the process of buying online and importing goods from overseas. With a massive purchasing power and a growing love for online purchase, the US market has a range of advantages for export businesses. While the competition to break into the US market might be high, the benefits are vast.
Here’s a breakdown of the current US market as of 2020:
- Active internet users in the US: 284 million1
- Number of active digital buyers in the US: 256 million2
- US B2B e-Commerce market size: $1.9 trillion3
So, let’s take a look at some of the obvious advantages of exporting goods to the US.
- The US is the world’s largest market
- It has an open consumer market of over 331 million Americans
- The US market is diverse with a range of income levels and consumer tastes, meaning demand for a wide range of goods and services
- It is the world’s largest private sector
- If you speak English, there will be a minimal language barrier
- The business culture is more laid back than other countries
- The US has a strong rule of law
- It is considered one of the most innovative consumer markets in the world
According to the USTR (The Office of the U.S. Trade Representative), China remains the top exporter to the US market, with a market share of 18%4. While China has a massive lead comparing to other countries, there is still huge potential for new manufacturers to take a piece of the pie!
According to data from Alibaba.com, the country that accounts for the top number of buyers on the platform is the United States, followed by Australia, Canada and the United Kingdom. As a seller, to attract US buyers, you need to understand their specific demands for goods, and how this has been affected by the global pandemic.
As we near the end of 2020, the US continues to battle against Covid-19, and the buyer behavior has changed significantly. Alibaba.com has noticed a sharp rise in the demand for high-quality medical supplies and goods, along with CBD oil and hemp products. As US buyers focus on essential goods and healthcare, international manufacturers and suppliers should strive to meet this rising demand to break into the US market.
US economy and trade policies
Despite that international travel restrictions due to Covid-19 hit the US market hard in the first two quarters of the year, by October, exports of goods increased by $4 billion from the previous month and imports rose by $5 billion. Data recorded by the October 2020 report on US International Trade in Goods and Services5 shows how the US economy can rapidly bounce back, even during a global pandemic. It is exciting news for global export businesses who want to supply the US market.
The data shows an increased demand for the following goods in October 2020:
- Cell phones and other household goods (+$1.1billion)
- Capital goods such as computer accessories (+$1.4 billion)
- Industrial machinery (+$0.6 billion)
- Industrial supplies and machinery (+$0.3 billion)
- Nonmonetary gold (+$0.5 billion)
- Crude oil (+$0.4 billion)
- Automotive vehicles, parts and engines (+$1 billion)
- Passenger cars (+$0.3 billion)
US trade policies and the China-US trade war
At the same time, US – China trade relations remain tough and challenging. The Trump Administration tightened the export control system, making the process of exporting goods from China to the US even more complex. Yet, that’s not to say that it is too difficult to trade with the US.
The China Relations Act of 2000 is still in place by the United States Congress that grants China permanent normal trade relations status once it becomes a full member of the World Trade Organization. As is known to all, China became a member of the World Trade Organization on the December 11, 2001.
The new China-US tariffs are in place to encourage American consumers to trade domestically rather than internationally and in particular with China. Tariffs exceed over $360 billion and in response China has sanctioned tariffs on US products of more than $110 billion6. This is making it far more expensive to sell goods from China to the US or vice versa.
While this trade war continues, for manufacturers and suppliers from other countries like Pakistan, Vietnam, India and European countries, this provides a prime opportunity to expand and break into the US market.
US customs and border protection
US Customers and Border Protection is responsible for safeguarding the country and enforcing US trade laws. Its approach consists of detecting high risk activity, deterring non-compliance of US trade laws and disruption fraudulent behavior. As long as you are acting according to the US trade laws and not selling illegal goods to US buyers, you should not run into trouble with US Customs and border protection, but there are some things to be aware of.
Customs export to the US
Before shipping goods to the US, you must classify the items using the harmonized tariff schedule (HTS code). You will also need to figure out the duty rates using the US International Trade Commission database7. Alternatively, you can seek the help of a customs broker who can help you with federal procedures and putting together the right documents.
US taxes and duty
US tax can be difficult and you will need help from a certified accountant or tax specialist. There is no value added tax in the US and each state determines their own sales tax on an individual basis. To work out duty head to the dataweb.usitc.gov8.
Copyright regulations
Consider whether you need to apply for a US trademark before selling goods or services to the US market. If you do, also check that your trademark doesn’t infringe an existing trademark. This is not to be confused with a company name. Patents, copyrights, domain names and designs can all be disputed legally in the US, so it’s best to do your homework before trading.
Prohibited items
There are also many prohibited items that cannot be exported to the US, according to the FDA and USDA. Here are just a few of the many prohibited items in the US.
- Shark fins
- Horse meat
- Ackee fruit
- Cuban cigars
- Beluga caviar
- Dog or cat fur
- Absinthe
- Switchblades
An overview of the US market and buyer needs
So, let’s take a quick overview of the US market today and any changes to US buyer needs.
- The global pandemic, Brexit and the China-US trade war have had a significant impact on the US market. To overcome the tension between the ongoing trade war, American consumers and business owners are increasing their imports from Vietnam, South Korea, India and Pakistan.
- The demand for high-quality medical goods continue to rise, as a substantial number of US buyers shift their focus from luxury to essential medical devices and supplies, or at least raise their needs on such medical supplies.
- Automation and digitalization are about to transform the logistics industry, as the world’s leaders in moving containers, Maersk and DAMCO are streamlining their logistics processes with higher integration of inland services. This will help reduce the cost of transporting goods and provide suppliers and buyers with real-time data on orders and logistics.
- US buyers are becoming more interested in sustainable and eco-friendly goods and services, leading to manufacturers using the terms ‘green’ ‘eco-friendly’ ‘sustainable’ to market themselves to the US market.
- The development of technology and the ease of international trade on a global scale means more US businesses are trading internationally from the get-go than in the past five to ten years. There are more sole-traders, startups and small business owners now looking for supplies online from overseas sellers.
- The Regional Comprehensive Economic Partnership, the world’s largest ever trade agreement was signed on the November 15 2020. This is a free trade agreement between Asia-Pacific nations of Australia, Brunei, Cambodia, China, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, South Korea, Thailand and Vietnam. This new free trade zone is bigger than both the US-Mexico-Canada Agreement and the European Union. It has the potential to dramatically streamline overseas manufacturing processes, and make exporting from these countries more affordable and efficient.
Challenges of exporting to the US
You should also be aware of the challenges you could face when exporting goods to the US, and meeting the expectations of US buyers.
Challenges of exporting to the US include:
- High market competition – As an economic power, the US market provides a huge opportunity for international manufacturers and suppliers around the world, so the competition to attract US buyers will be extremely high. This also means that the market is likely to be saturated so you will need to work hard to stand out from the crowd.
- US buyer expectations– US buyer expectations are high when buying online, so goods must be of a certain quality or risk being sent back to the supplier, or face a refund request. Buyers also require clear information relating to the manufacturing process, where the goods have been made and sourced, whether the goods are sustainable or not and if the process is eco-friendly.
- US seasonal price cuts – During holidays and special events such as Black Friday, Cyber Monday, Thanksgiving and in the few weeks before Christmas price and delivery expectations will change. Black Friday and Cyber Monday will make US buyers expect to receive a discount or cheaper deal online, since major companies across the country will be running week long offers and massive saving opportunities. Celebrations such as Thanksgiving and Christmas run the risk of US buyers demanding a fast delivery in order to receive goods before the holiday arrives and they miss the opportunity to make a profit.
- Vast regional differences – The US is made up of 50 states and is one of the biggest countries in the world. Expect big regional differences and changes to buyer needs and buyer trends in different states.
- Litigation is common – Beware that if you fail to meet a deadline or don’t deliver what the buyer has paid for, there is a high risk that they may take legal action against you. Have all your relevant documents, certificates, insurance and guarantees in place before supplying to the US market. Always inform and update a US buyer regarding their delivery and order details to avoid any miscommunications.
How to find a US buyer
One of the most effective ways to find a US buyer is to list your services and goods on Alibaba.com’s international marketplace. You’ll be able to instantly connect with millions of business buyers from the US and around the world.
Step 1: Register a seller account on Alibaba.com and activate your Gold Supplier membership.
Step 2: Create a well-written profile in English, detailing your company information, goods/services, delivery information and contact details. US buyers will consider you a safe bet if your products include detailed information and you are able to communicate effectively in English.
Step 3: Work on optimization of your online product descriptions and mini-site decoration. Make sure to use high-quality images of your goods or services. Consider highlighting your certificates, manufacturing processes and any unique selling points such as ‘sustainable’ ‘eco-friendly’ ‘green’ ‘fast delivery’ within your profile.
Step 4: Always respond in a timely manner to any questions or order inquiries. It helps you build up trust between buyers and make sure you don’t miss out any possible orders.
Step 5: In the long run, work hard to provide quality goods and work hard on customer service to gain positive customer reviews. The more positive customer reviews you have, the more likely a US buyer will trust your business and set up an order with you.
Export to the US case studies
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Sunrise Jewellers is from India and supplies goods to the US via Alibaba.com. Founded in 1999, it has between 50 and 100 employees and exports silver, gold, and diamond jewelry. Taking advantage of Alibaba.com’s Gold Supplier Membership, they now have the vision to become the world’s largest gemstone and jewelry manufacturer in the world. The company recalls its surprise to receive their first order on the day they set up their profile on Alibaba and now enjoys over 2,000 orders per month.
Read the success story of Sunrise Jewellers |
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QST Intl. an international manufacturer from Pakistan specializes in the fitness and bodybuilding industry. Founded in 1989, the company has been active on Alibaba.com for over 9 years and sells goods to the US, UK, Germany, and Russia. Now a 100% export business, 80% of this company’s orders come from Alibaba.com and more buyers are from the USA, Russia, and Asia. According to QST Intl. their most lucrative business relationship is with a buyer from the US, who purchases two orders every year worth around $200,000 each.
Read the success story of QST Intl. |
Alibaba’s international B2B marketplace
Alibaba.com provides international manufacturers and suppliers with a 24/7 platform to attract US buyers. Open 365 days of the year, it gives sellers worldwide the opportunity to connect with buyers both on a domestic and global scale. Never miss an opportunity again by promoting your goods on Alibaba.com’s international marketplace.
With over 160,000 global suppliers and 16 million active buyers from over 190 different countries and regions, over 300,000 inquiries are sent each day through the online marketplace. By listing your company and promoting your goods and services on Alibaba.com, you can reach valuable US buyers.
Alibaba.com provides an all in one international marketplace that covers the whole global e-commerce journey. From trade assurance, payment and logistics, to creating a digital storefront, advertising on the marketplace and having access to industry analytics. You can use data to view how your business grow and help make important business decisions, and even open yourself up to a whole new world of potential buyers. The analytical reports also reflect where your buyers come from, keyword popularity, buyer trends and search index by country.
References:
1. https://www.statista.com/statistics/325645/usa-number-of-internet-users/
2. https://www.statista.com/statistics/273957/number-of-digital-buyers-in-the-united-states/
3. https://www.researchandmarkets.com/reports/4418543/u-s-b2b-ecommerce-platform-market-forecast-to
4. https://ustr.gov/countries-regions/china-mongolia-taiwan/peoples-republic-china
5. https://www.bea.gov/news/2020/us-international-trade-goods-and-services-october-2020
6. https://www.bbc.com/news/business-45899310
7. https://dataweb.usitc.gov/tariff/database
8. https://dataweb.usitc.gov/