Getting your business ready to export takes a fair bit of work and proper research. When done right, your hard work will pay off, and you can sit back and watch the revenue flow in from the international market.
Australia is no stranger when it comes to exporting to the USA. Data from the Department of Foreign Affairs show that USA is the 4th largest market that Australia exports to. Most common exports include beef & meats, aircrafts & parts and alcoholic beverages.
As you begin your research on exporting, it’s important to know if your business is ready for it. Our beginners’ guide to exporting from Australia will be a great starting point to understand taxes, tariffs and financial assistance.
There’s also lots of fantastic advice for exporting to USA here.
In this guide we’ll cover:
- Finding the right products to export to USA.
- Understanding the types of products you can (and can’t) export.
- The best ways to export products to USA.
- Costs to export containers from Australia to USA.
- Understanding licenses for exporting to USA.
- Export and import duty, tariffs, and taxes.
- Getting paid in foreign currency
Finding the right products to export to USA
Exporting your goods to the USA and making a profit means that your products must be sold. If you are exporting goods that are already in surplus in the U.S. market, or if there is no demand, it would be harder to sell.
Avoid produce and perishable goods — Food and produce are very expensive to export, since you need specialized shipping. Additionally, food exports are subject to strict criteria, so you’re best off avoiding them altogether.
Avoid mass-produced, cheap goods — USA imports so many of these types of goods from China, you’re never going to compete when you factor in the costs of manufacturing and logistics.
Do your market research — Amazon and AliExpress, both enormous online marketplaces, have a huge presence in USA— You can certainly sell through these marketplaces, and they’re a good place to start when it comes to market research. Additionally, look into specialized market reports on what sells in USA.
Understand your margins and pricing — Exporting can eat into your margins — Make sure you’ve got a rock-solid understanding of all your costs and the price you want to sell at, and account for exchange rates to make sure you can still turn a profit.
Understanding the types of products you can and can’t export to USA
Both Australia and USA have limitations on what you can export and import.
Australia export restrictions
The Australian authorities prevent or restrict goods like some chemicals, biological materials, pharmaceuticals, animal and plant species, weapons, and more from export. You can find a complete list here. You should also learn what Australian Customs needs from you if you want to export.
USA import restrictions
The United States authorities prohibit certain types of goods being imported including firearms, certain fruit and vegetables, animal products and biologicals. Find the full list on the U.S. Customs and Border Protection website.
The best ways to export products to USA
When it comes to exporting to the U.S. there is a lot involved and getting it done right is important. If it’s your first time exporting, we recommend hiring someone who has experience in this area. This is the typical process you can expect when exporting:
You manufacture or purchase the items domestically, in Australia OR you manufacture them elsewhere and arrange for shipping from there to United States.
You understand the various regulations, tariffs, and licenses you need to export.
You arrange for international shipping from the point of origin to United States— For larger items and big quantities, you will typically use container cargo, for smaller quantities, you might use an international shipper like FedEx.
On arrival of your goods in United States you pay the necessary duty, tariffs, and any other fees.
You arrange for your goods to be held on your behalf in United States.
You market your goods for sale in United States, often through a retail store, third-party marketplace, ecommerce website, or some other outlet.
You sell your goods and arrange for them to be sent to your customers.
You get paid and transfer your money back to Australia.
You pay any necessary local taxes in United States and Australia.
Typical container costs — Shipping from Australia to USA
International shipping might not be as expensive as you think. According to the Sea Freight Calculator, the cost of renting a full container to ship goods from Australia to USA is approximately:
- 20 ft container — $5,700 USD
- 40 ft container — $7,500 USD
And according to Australia Trade, renting part of a container will cost you between $150 and $250 AUD per cubic meter or 1,000 kilos, whichever is greater.
Remember that these are only shipping costs — The cost of actually having your goods freighted from one port to another. They don’t include costs involved in getting your goods to a warehouse, insurance, duties, and other fees. Make sure you understand your total logistics costs so you can factor them into your pricing.
We’d advise you to compare a number of quotes from shipping companies and suppliers based on the type and quantity of goods you want to export.
Understanding licenses for exporting to USA
The type of license you need to import into the U.S. depends on the type of goods you want to send there. The U.S Customs and Border Protection website has more details and you can find further information here.
Note that the rules and regulations around importing and exporting to and from USA do change from time to time. Make sure you check with official sources to ensure you’ve always got the latest information.
Export and import tariffs, duties, and taxes for USA
With the Australia-United States Free Trade Agreement (AUSFTA), all tariffs have been eliminated for export products to the U.S.
Certain taxes and duties may apply, based on the type of good you are importing into the United States. The U.S. Customs and Border Protection has information for specific items to work out duty rates.
As you can see, there is some work involved in exporting to U.S., but if you’ve already made good inroads into the Australian domestic market, it can be a great next step. Make sure you do your research, understand what you’re getting into, and plan carefully. Then you’ll be ready to launch, and sell your products.
Getting paid in foreign currency
American businesses will typically pay you in US dollars.
If you are selling goods in the US market, consider using the TransferWise Borderless Account.
Until recently, Australian businesses had 3 options to receive money from overseas customers:
- Get paid into a local Australian based, Australian dollar account.
- Open a Foreign Currency Account, usually with a bank
- Use a payment gateway like PayPal, Braintree or Stripe
Unfortunately, these options are usually filled with fees, balance requirements or massive exchange rate mark-ups.
In October 2017, TransferWise released the Borderless account in Australia and it’s really impressive. It allows you to receive, hold and transfer 27 different currencies.
The unique feature though, which is particuarly useful for businesses, is the ability to have local bank account details in USD, EUR, GBP or AUD. This makes receiving money from customer abroad, exceptionally ease.
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