Selling online to the USA in 2021: a five-step guide to setting up US fulfillment
70% of UK retailers say that the US is a priority export destination, according to a recent Tamebay survey. While it’s fairly simple to set-up the commercial aspects of selling online to US consumers, handling the logistics is a bigger challenge.
One solution is to use a US fulfillment center. It’ll give you a base to hold stock locally and give your US customers a much better experience, with cheaper shipping, faster delivery, no customs duty surprises, and hassle-free returns.
So how do you get started? In this post, we show you the five steps you’ll need to take to use a US fulfillment center, using James and James’s own location in Columbus, Ohio as an example.
1. Register as a foreign for-profit corporation
The first step is to register as a foreign for-profit corporation, which essentially gives you a license to do business in the USA. In Ohio, you can do this by completing a 530A form, which requires:
- Page 1: Your existing business contact details
- Page 2: A Certificate of Good Standing, which you can get from Companies House
- Page 3: The details of an “agent” in Ohio, which can be James and James’s US fulfillment center
- Page 4: A Notary Public, who should be local to you, to sign and seal a hard copy of the form.
Once you’ve returned the form to the Ohio Secretary of State, you’ll then receive your license, enabling you to move on to step 2.
2. Register to collect and remit sales tax
Unlike in the UK, there’s no blanket Value Added Tax (VAT) in the US. Instead, different states have different rules around sales tax.
Usually, you’ll have to collect sales tax from consumers and pass it on (or remit it) to the state, if you have “nexus” there. And there are two types of nexus:
- Sales tax nexus: which results from having a physical presence in the state, including inventory in a fulfillment center
- Economic nexus: which results from achieving a certain amount of revenue or orders from a state.
So if, for example, you hold stock in Columbus, while your biggest markets are Los Angeles and New York, you’ll collect and remit sales tax in Ohio, California and New York.
Tools such as TaxJar – which integrate with your shopping cart, calculate which states you have nexus in, and automate the collection and remittance process – can be useful.- Luke Nava
3. Set up your local fulfillment center
The next step is to set up an American fulfillment center. There are a few things to consider when making the choice:
The USA is obviously a big place, so shipping nationwide isn’t as quick or easy as it is in the UK. Having a few US fulfillment centers can help, but it also adds complexity to inventory management. James and James opted for a Midwest location, as it enables 2-3 day shipping across North America (the bar set by Amazon Prime) from one central spot.
Managing your orders and inventory in another country, with a five to eight hour time difference, will be tricky, so consider this when choosing a fulfillment center. James and James’s cloud-based software and UK-based client success team have helped many retailers make the transition, and now provide ongoing support.
4. Send stock in bulk to the USA
Once you’ve chosen your US fulfillment center, it’s time to send your stock to it in bulk. Using a freight forwarding company will remove a lot of the hassle of this. They can help with:
- Logistics: organizing the transportation of goods to the US, whether from your existing UK stock or from a manufacturer in another country
- Customs: acting as the Customs Broker or Importer of Record (IOR), easing the path for your goods through customs and ensuring the correct duties are paid.
5. Sell, sell, sell
While you’re likely to be making some sales to the US already, once you’re properly set up, you can really turn your marketing engine on. Think about:
- Localizing your store for American customers, with prices in dollars and sizes in US or imperial measurements
- Making the most of your local fulfillment center, by promoting cheaper shipping, faster delivery and simpler returns to US customers
- Tuning your email and social campaigns to US culture, with its more direct approach, and numerous national holidays and discount days
- Ensuring you register and protect your trademarks and intellectual property in the US, as well as at home.
James and James Fulfillment
It all began in 2010, when James Hyde and James Strachan couldn’t find a modern shipping service for the eCommerce business they ran. Faced with messy warehouses based on out-dated systems, they decided to build their own.
We’ve not stood still since, helping hundreds of online brands scale up – and scaling with them.
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