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The e-commerce industry in the United States (US) is booming, with 2020 being a year of strong growth as people turned to online shopping in the wake of COVID-19. Data from the US Department of Commerce shows that total e-commerce sales increased 42.4% to $811.6 billion in 2020 as compared to 2019. It recorded further growth the following year – in 2021, e-commerce sales in the US reached US$960.1 billion. According to Statista, revenue for the retail e-commerce industry alone will hit US$1.3 million by 2025. These figures show great potential for Malaysian companies to expand their global reach and export to the US to generate revenue and profits.
The costs of shipping to the US is greatly influenced by the taxes and duties imposed on imported items. Tariffs, also commonly known as duties, are taxes applied to goods from a particular country and may vary between countries. For example, if the imports contain parts manufactured from the US, it may be imported duty-free to countries that have a Free Trade Agreement (FTA) with the US.
These are typically calculated based on your products’ HS codes in the tariff schedules. However, it is important to note that tariffs and taxes can only be estimated. The tariffs and taxes to be applied on the imports can only be calculated and finalised by the customs officers in the US.
It is also helpful to know about the de minimis rate in the US. De minimis rate is the price threshold whereby the imported goods are considered too low in value and are exempted from shipping taxes. For Malaysian businesses shipping into the US, goods below the value of US$800 will be exempted from duties and taxes. The fact that the US has such a high de minimis rate also means that customers from the US can place larger orders for products from Malaysia. This will help Malaysian businesses benefit from the larger duty-free orders.
The weight and quantity of items in your shipment will also play a part in the price of shipping to the US from Malaysia. The application of licences, purchase of insurance, and delivery fees you’d need to pay your global courier service provider are additional costs to consider as well.
When shipping from Malaysia to the US, your expected delivery times will vary as it is dependent on the service you choose. Typical delivery times are four to six business days, with express delivery taking between one to three business days. Same day express delivery is also an option.
Accordion to U.S Customs and Border Protection, the following products are prohibited from being shipped to the US:
Automobiles that don’t meet federal standards
Illegal substances (e.g., absinthe and rohypnol)
Dog and Cat fur
Drug paraphernalia, unless prescribed for original medical conditions
Products infringing trademark and copyright
Apart from the prohibited items listed above, some products are restricted and you’ll need special licences and import permits to ship them from Malaysia to the US.
Cultural artefacts and cultural property
Raw and prepared food products
Fruits and vegetables
Plants and seeds
According to the United Nations’ COMTRADE database on international trade, the majority of items to be shipped to the US would include electronic equipment, machinery, and rubbers. Others include the shipping of liquids. Additionally, it is crucial to have a good understanding of your target audience in order to select which items to sell. By doing this, it enables you to plan how you can best capture the attention of your customers and retain them.
If you’d like to start a business exporting to the US and are looking for more ideas on what you can export to there, you can check out this article on top Malaysia exports to global markets.