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flag United States United States: Selling

In this page: Market Access Procedures | Distributing a Product

 

Market Access Procedures

 
 

Customs Procedures

Import Procedures
U.S. Customs and Border Protection (CBP) import requirements apply to anyone bringing foreign items into the United States. While CBP does not require an importer to have a license or permit to import goods from a foreign country, any item crossing the border into the United States is subject to customs clearance and customs duties unless specifically exempted. To obtain customs clearance from CBP, importers and their goods must take the necessary entry, examination, valuation, classification and clearance measures.
Among the documents needed to import there are:

  • Entry Manifest or Application and Special Permit for Immediate Delivery or other form of merchandise release required by the port director,
  • Evidence of right to make entry,
  • Commercial invoice or a pro forma invoice when the commercial invoice cannot be produced,
  • Packing lists,
  • Other documents necessary to determine merchandise admissibility.

Import procedures are subject to a specific process. For more information, consult Tips for New Importers on CBP's Website.
Further information on import and customs clearance procedure is available on the website of U.S. Customs and Border Protection.

Specific Import Procedures
FDA is the federal agency responsible for ensuring that foods are safe, wholesome and sanitary; human and veterinary drugs, biological products, and medical devices are safe and effective; cosmetics are safe; and electronic products that emit radiation are safe.
Importing Samples

The main options to import your commercial samples into the US:

  • Duty Free Consumption Entries: goods may possibly enter the US with regular consumption entry stipulations, but free of any duties. This applies to small amounts of consumption samples, including: alcohol samples, tobacco samples, and samples not valued over 1$.
  • Temporary Importation Under Bond (TIB): Samples entering under this procedure may enter into the US duty free by “posting a bond”, This bond is submitted by the importer, agreeing to export or destroy the sample within a specific time period
  • Carnets: For the import, export and re-export of commercial samples an ATA (Temporary Admission) book can be used. It must be written on the product that it is a free sample and that it may not be sold.
 

To go further, check out our service Import controls and Export controls.

 
 

Customs Duties and Taxes on Imports

Customs threshold (from which tariffs are required)
USD 800
Average Customs Duty (Excluding Agricultural Products)
Until recently, the U.S. applied a customs tariff that is among the lowest in the world (on average, 3.5%). Yet following an increase in tariffs on Chinese goods, as of May 2019, the United States has one of the highest tariff rate of all developed countries, with a trade-weighted tariff rate of 4.2%.
Products Having a Higher Customs Tariff
Dairy products, Sugars and confectionery, Beverages & tobacco, Clothing.
Preferential Rates
The duties for Canada and Mexico, bound by the USMCA agreement, are non-existent, or very reduced and in any case, lower than the general rate. There is also a preferential rate for countries included in the Generalized System of Preference, which is to say most of the developing countries.
Customs Classification
The U.S. applies the harmonised customs system (harmonised tariff schedule). Tariffs and classification depend on the origin of the products.
Method of Calculation of Duties
Customs duties are calculated Ad valorem on the CIF value.
Method of Payment of Customs Duties
They have to be paid by any electronic technology or charge cards that are authorized by the Commissioner of Customs.
Import Taxes (Excluding Consumer Taxes)
Import tax (also known as an import duty or import tariff) is collected by US Customs on every import that comes into the US. Import taxes are a source of income for the US Government and are a way to restrict or facilitate the import of certain commodities.User fees depend on the type of entry and mode of transportation. Federal excise tax is imposed on imports of alcoholic beverages and tobacco. Merchandise processing fee is charged on formal and informal entries.
 

List of tariffs and local taxes that apply to your product on our service Customs duties and local taxes.

 

Labeling and Packaging Rules

Packaging
  • Pack the product in strong, sealed, moisture-absorbing containers
  • Evenly distribute the product’s weight
  • Provide adequate protection and bracing inside the container
  • Use oceangoing containers or pallets for packing to ensure friendly handling
Languages Permitted on Packaging and Labeling
English is required. Other languages are optional.
Unit of Measurement
Metric units of measurement and weight.
Mark of Origin "Made In"
It is mandatory.
Labeling Requirements
All imported products must be indelibly labelled with its country of origin. Depending on the item, specific requirements apply. Food items must list all ingredients in order from most to least prevalent and must list nutritional information. Textiles and apparel must list fibre content and fabric care instructions. For more information consult the Food and Drug Administration, the Federal Trade Commission and the Department of Agriculture (USDA).
Specific Regulations
For certain foodstuffs (food, alcohol, drugs, medical devices) and textile products, electrical appliances and consumer goods.

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Distributing a Product

 

Distribution Network

Types of Outlet

Stores
Clothing, Food, Cosmetics, Sports.
Walmart, Costco, Zara.
Drug Stores
Personal hygiene products, Cosmetics, Beauty products, Detergents, Sweets and Drinks.
CVS, Walmart Stores Inc., Rite Aid Corporation, Walgreens Boots Alliance.
Convenient Stores
Open 24/24.
General food, drink, everyday products.

7 Eleven, Turkey Hill, Fresh Start Convenience, Inc.
Speciality Centers (Big Chains)
Gardening, decoration and other items for decorating and fitting out the home
Home Depot, Target, Whole food, Wal Mart.
The Mall
Shopping center with several stores and fast food restaurants.
The Mall of America, King of Prussia Mall, Del Amo Fashion Center, Aventura Mall.
 

Evolution of the Retail Sector

Growth and Regulation
The U.S. is the undisputed world leader of the retail industry: of the world's ten largest retail companies, five are based in the country. According to the latest report by PwC and the National Retail Federation (NRF) - released on May 2020 - the industry’s total GDP impact was $3.9 trillion, accounting for 18.7 percent of US GDP in 2018. The retail industry directly provided 32 million jobs for American workers (accounting for 16.0 percent of the national total), making it the largest private-sector employer in the country. Due to the global Covid-19 pandemic, retail sales in the US could be down by at least 6.5% in 2020, according to new estimates by market research firm Euromonitor. Also according to Euromonitor's analysis, companies that will be less affected by the Coronavirus crisis include food retailers, e-commerce players such as Amazon, third-party delivery platforms and major food brands. Retailers were among the biggest winners of the first complete rewriting of federal tax law in three decades. According to the NRF, the Tax Cuts and Jobs Act has helped revive the economy by eliminating a wide range of tax benefits for businesses and using the money saved to lower rates for all businesses, large and small. The corporate tax rate has been reduced to 21% from 35%, and small business “pass throughs” have received a 20% deduction. The measure also provided relief for middle-class taxpayers. Actually, the retail industry is expected to save $175 billion due to the reduction in the corporate tax rate, according to the NRF. Although it's too early to measure the direct benefits, some retailers have already announced investments in response to the tax cut, like an increase of the minimum salary to $11/hour for their employees.

The U.S. is the ultimate test market for exporters and is open to all kinds of new products and technologies. However, it is very spread out geographically and new products are subject to intense competition. The U.S. market is thus very demanding and requires a considerable amount of preparation, groundwork and long-term consistency. Numerous opportunities for growth exist in the U.S. retail market for retail providers of all sizes, including individual direct marketers or direct sellers, small- to medium-sized franchise unit owners, and large "big-box" store operators.
Market share

The supermarket & Grocery stores industry grew at a rate of 1%, reaching $654.6 billion in 2019. Market segmentation is drawn along various lines, including age group, ethnic group and even social and religious groups, which has forced distributors to adapt their strategies to this situation. One of the most marked consequences of this absence of homogeneity is the emergence in the past few years of "Speciality Stores" (Home Depot, Best Buy, etc.), which currently represent 11% of retail sales. In fact, American consumers stand out for their demanding nature, the importance they attach to price and their product disloyalty. It is thus incumbent upon distributors to continuously adapt themselves to the market and to engage in well-targeted marketing efforts in order to win consumer loyalty. According to the latest figures by USDA, grocery stores, including supermarkets and smaller grocery stores (except convenience stores) accounted for the largest share of store sales (92.2 percent), followed by convenience stores without gasoline (4.5 percent). Specialized food stores, including meat and seafood markets, produce markets, retail bakeries, and candy and nut stores, accounted for the remaining 3.3 percent of the total. According to NRF latest data, the main retailers in US are:

  • Walmart, with a turnover of $ 387.66 billions in retail sales
  • Amazon.com ($120.93 billion)
  • The Kroger Co ($119.70 billion)
  • Costco ($101.43 billion)
Retail Sector Organisations
National Retail Federation
Convenience Distribution Association (CDA)
International Council Shopping Centres
The Association for Convenience and Fuel Retailing (NACS)
 

E-commerce

Internet access
The U.S. is among the leading countries in terms of internet technology and penetration. It is estimated that about 89% of the total U.S. population has access to the internet (versus 74% ten years ago). For some demographic groups – such as young adults, college graduates and those from high-income households – internet usage is almost universal (Pew Research Center, 2018). Today, roughly three-quarters of American adults have broadband internet service at home, however the adoption of traditional broadband service has slowed in recent years, also because a growing share of Americans now use smartphones as their primary means of online access at home. In fact, about 95% of Americans now own a device, with the share of those owning smartphones at 77%. Along with smartphones, nearly three quarters of U.S. adults now own desktop or laptop computers, while roughly 50% own tablet computers and around 20% own e-reader devices. The most popular web search engines in the U.S. are led by the market leader Google, which generated 63.4% of all core search queries in 2017, followed by Bing (23.7%) and Oath (formerly known as Yahoo), with a market share of 11.9%.
E-commerce market
Since 2011 the U.S. online retail growth has accelerated and in 2017 the e-commerce represented 13% of total retail sales and 49% of the growth of the retail sector as a whole. Consumers in the US spent US$ 453.4 billion online for retail purchases in 2017, a 16% increase compared with US$ 391 billion in 2016 (data from U.S. Commerce Department). While the top two e-commerce companies - Amazon and eBay - are for the most part online-only retailers, 60% of the biggest e-commerce players are multichannel, with a majority of sales occurring in-store (Walmart, etc.). Other major online stores include Apple, Home Depot, Best Buy and Macy’s. Electronics & media is currently the leading product category in America, followed by toys, hobby & DIY. Americans are increasingly using their smartphones to browse and make purchases: it is estimated that mobile shopping represents 40.3% of total e-commerce traffic (Adobe Analytics).
E-commerce sales and customers
There are currently 203.96 million e-commerce users in the U.S., with an additional 26 million users expected to be shopping online by 2021 (eshopworld). Amazon is responsible for an outsized proportion of total online sales, with a turnover forecasted to reach USD 258 billion in 2018 (equal to 49.1% of all e-commerce retail spend in the country, and 5% of all retail sales (e-Marketer). When Amazon’s sales are combined with e-commerce sales from eBay and Walmart - the next two companies on the list - they represent almost 5% of total retail sales in the US. It is estimated that 95% of Americans shop online at least once a year, with about 30% shopping online weekly. Online shopping is more common in younger generations, with respectively 67% and 56% of Millennials and Generation X that claim to prefer to search and purchase on e-commerce sites rather than in store (the ratio being 41% for “baby boomers” and 28% for seniors). The top three most influential factors in determining where Americans shop are price (87%), shipping cost and speed (80%) and discount offers (71%). Almost a quarter of online shoppers (23%) are influenced by social media recommendations/reviews. Oddly, one in five Americans have accidentally bought something they didn’t want. Credit cards remain the preferred online payment method (56%), while 25% of American shoppers prefer to use PayPal for their transactions. Debit cards and vouchers/promo codes have a lower share (10% and 7% respectively).
Social media
Today around seven-in-ten Americans use social media, compared to 26% in 2008 (Pew Research Center, 2018). While young adults were among the earliest social media adopters, nowadays the share of users aged 50-64 has increased and is estimated to have reached 64%. Facebook is the most-widely used of the major social media platforms across all type of age groups, with 214 million users. Smaller numbers of Americans use social media such as Instagram (77.6 million), Pinterest (75 million), LinkedIn (133 million) and Twitter (67 million). YouTube is also very popular (180 million users), while instant messaging apps like WhatsApp are less common (around 20 million). For many users, social media is part of their daily routine: around 75% of Facebook users – and around 60% of Instagram users – access these platforms at least once a day.
 

Direct Selling

Evolution of the Sector
According to the World Federation of Direct Selling Associations, 2016 direct retail sales amounted to USD 35,540 million and involved 20,500,000 independent representatives. It is the largest direct selling country in the world, with China a close second. One in six US households are involved in direct selling. The 35-44 age group is the largest in the industry (26%) followed by the 44-54 age group (23.3%) and the 25-34 age group (21.4%). Women accounted for 74% of people involved in 2016.

Euromonitor International expects the best direct selling products - health, beauty, and personal care items - to continue growing. Direct selling companies are inviting customers to register as preferential customers that purchase directly from the company, which helps the former defend their business models are product-based instead of recruitment-based. Their online presence has also grown.

The industry faces increased competition from other self-employment options as Uber and e-commerce, as well as new entrants to the direct selling sector. Mary Kay was the leading direct seller in 2017 followed by Amway, Melaleuca and Herbalife. However, nine companies that have USD 30 million in sales in 2008 are expected to surpass USD 400 million dollars in sales.

The US lacks coherent direct selling legislation. To solve it, the Anti-Pyramid Promotional Scheme Act of 2017 (H.R. 3409) was introduced in Congress to stop pyramid schemes and differentiate them from legitimate direct selling opportunities at a federal level.
 
 

Commercial Intermediaries

Trading Companies
 
  • Type of Organization
A typical trading companies is more market-orientated and transactions driven. They usually act as an independent distributor creating transactions by linking domestic producers and foreign buyers.
As opposed to represent a specific manufacturer brand in a foreign market, the ETC determines what U.S. products are desired in a specific market and then work with U.S. producers to supply it.
  • Main Actors
Wal-Mart Stores; Exxon Mobil; General Motors; Chevron; Hewlett-Packard ; Ford Motor; Home Depot.
Wholesalers
 
  • Type of Organization
According to the United Nations Statistics Division, "Wholesale" is the resale (sale without transformation) of new and used goods to retailers, to industrial, commercial, institutional or professional users, or to other wholesalers, or involves acting as an agent or broker in buying merchandise for, or selling merchandise to, such persons or companies
  • Main Actors
Cargill; Agricore United; Byrne Dairy; HD Supply Hasson Hardware; Hughes Supply.
Useful Resources
Search engine to find wholesalers
Search engine to find wholesalers
 

Using a Commercial Agent

The Advantages
The more realistic marketing strategy for a small or medium-sized firm.
Import agents are often appointed as sole agents for the entire country.
Where to Be Vigilant
This approach requires great care in the selection of the representative.
Don’t try to use a list of importers as a basis for “cold calls” on prospective agents. It is important to build a personal relationship.
Elements of Motivation
Exclusivity, a limited term of representation, minimum sales, or qualitative indicators of sales efforts. Frequent communication per fax, mail, phone.
The Average Amount of Commission
From 5 to 10% for regular business transactions, and from 10 to 20% for occasional transactions
Breach of Contract
Article 1 (General Provisions) and Article 2 (Sales)
Finding a Commercial Agent
International Trade Association
Alibaba

Learn more about Traders, Agents in the United States on Globaltrade.net, the Directory for International Trade Service Providers.

 

Setting Up a Commercial Unit

The Advantages
Although still costly, establishing a presence and an office in the US is necessary when your are considering a long-term sales development. As a long term investment, it costs you less than to use a commercial agent.
Where to Be Vigilant
It should be considered in long-term sales development.
Different Possible Forms of Settlement
 
  • A Representative Office
Such an office can obtain market data and other information and provide necessary promotional and service support.
  • A Branch Office
A branch office may take and fill orders and carry out a full marketing program, including advertising, recruiting a sales force, and performing promotional activities.
  • A Company
Setting up a wholly-owned corporation will involve more time and expense, but it can offer effective means guaranteeing better protection for proprietary information, obtaining credit, and penetrating markets.
 

Franchising

Evolution of the Sector
In 2019, there were 773,603 franchise establishments in the United States. In 2019, the economic output of franchise establishments in the United States was about 787.5 billion U.S. dollars. Contributing to the economic output of franchise establishments in the United States, were about 8.43 million people who worked for these industry. The largest segment of the franchising industry is fast service restaurants, followed by business services. McDonald's is the most popular but also the most profitable franchise in the United States, with over $96 billion in sales. After McDonald's, it was 7-Eleven, raising $86 billion in sales.

Franchising in the US is regulated both federally and at the state level. The general rule in the US is that:

  • Franchisors must comply with both federal and state franchise laws.
  • The law that is the most protective of the franchisee prevails.

At the federal level, franchising is governed by the Federal Trade Commission's (FTC) trade regulation rule entitled Disclosure Requirements and Prohibitions Concerning Franchising (16 Code of Federal Regulations (CFR), Part 436 (2007)) (FTC Franchise Rule). Federal registration is not required. The FTC Franchise Rule applies in all 50 states and US territories and protectorates (including the District of Columbia, Puerto Rico, Guam and the US Virgin Islands). The Federal Trade Commission regulates franchising at the federal level.

Some Big Franchises
Mc Donald's, fast food
UPS Store, shipping
7-Eleven Inc., iced coffee
RE/MAX Int'l. Inc., real estate
InterContinental Hotels Group
For Further Information
IFA, International Franchise Association
AAFD, American Association of Franchisees & Dealers
AFA, American Franchisee Association
 

Finding Assistance

Export Trading Companies
Export Trading Company Affairs, US Chamber of commerce
Recommended Resource
Doing Business in the U.S.
 
 
 
 

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Learn more about Sales in the United States on Globaltrade.net, the Directory for International Trade Service Providers.

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Latest Update: May 2022