What you need to know about exporting to the US: The land of opportunity

Ingrid van der Zalm, Director Small Business Marketing at UPS, shares some suggestions to help you break into one of the world's largest and richest markets.

Expanding your customer base to the US can be an appealing prospect for British small business owners, but how can your company make the leap across the Atlantic?

This article is the third in our series on exporting, which started with exporting demystified, followed by delving into your guide to overcoming customs complexities.

Why the US?

In terms of individual countries, the US is the UK's largest export market for goods and services, representing 15.5% of total UK exports by dollar value in 2019[1]. As well as generating high demand for UK products and services, the US ranks sixth in the World Bank's Ease of Doing Business report for 2019[2].

British businesses in particular are often drawn to the US thanks to the fact that there is no language barrier and a similar business culture.

Check state laws

The US is a vast country with over 50 states, some with bigger populations than many European countries. Always check what the local laws and regulations covering your product are. The US is a relatively open market, but there are trade laws as well as licensing requirements which may vary on a state-by-state basis.

Identify prospects

How do you find business partners and distributors in the US? These days, you can learn a lot through desktop research - check out British American Business and the US Embassy for starters.

Trade shows are another great source for finding distributors and buyers. With many now taking place virtually, you can participate from your home or office in the UK.

Navigate customs and taxes

The US tax system is complex. Taxes can be imposed by both the US federal government and individual states, counties and even cities. However, you may be eligible for certain tax exemptions, so it's best to seek advice from a certified accountant or tax lawyer.

The good news is the UK and the US have signed a double taxation agreement which ensures that you won't be taxed on the same income twice.

Check out my recent article for the lowdown on overcoming customs complexities and avoiding border delays.

Increased de minimis, decreased time and cost

In 2016, the US raised its de minimis value threshold from $200 to $800. This means that many goods valued at $800 or less can enter the country without any formal customs procedures. Moreover, in general, no duties, fees, or taxes need to be collected. It's easier than ever for small e-commerce sellers to export to the US if your shipment value falls below this threshold, as you need to spend less time preparing your parcels and are less likely to pay unexpected costs.

However, it is important to be aware of the restrictions. For example, shipments of certain goods such as alcohol and tobacco do not qualify for de minimis. For more information, click here.

UK-US trade agreement

Negotiations are under way for a bilateral UK-US trade agreement, including proposals to help small businesses. If approved, aligned UK-US customs procedures and simplified administrative processes would allow you to get your product to its final destination more efficiently.

Keep your customers at the forefront

The US has a strong service culture and American consumers and businesses will expect to be treated well. Simple things like displaying your prices in US dollars and citing measurements in imperial units as well as metric will help to convert US visitors to your website.

Understand the shipping rates

Make sure there are no surprise costs for you or your customers. In order to display the correct shipping rates for American visitors to your website, you will need to understand the prices for shipping to the US and a reliable logistics partner that serves the market.

Tap into UPS's online rates for small businesses and receive a 5% discount until 31 December 2020. Want to unlock even more savings? Benefit from an additional discount of 10% by signing up to UPS communications here.

The information provided in this article does not, and is not intended to, constitute legal or other advice; instead, all information, content, and materials are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information. Any links to other third-party websites are for the convenience of the reader, user or browser; UPS and its employees do not recommend or endorse the contents of the third-party sites.

[1] World's Top Exports

[2] The World Bank