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March 23, 2022

How Duty Drawback Can Help Ecommerce Businesses Save Big


Tim Vorderstrasse

Head of Drawback, Flexport


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The last two years have been a time of massive growth for ecommerce brands. The pandemic led more consumers online and accelerated already strong ecommerce growth. The result is an additional $105 billion in online sales, according to the U.S. Commerce Department.

With that in mind, we’re going to look at some ways ecommerce and retail companies can take advantage of duty drawback to recover operating capital. E-commerce is a unique sector in many regards, creating some interesting challenges and some major opportunities when it comes to duty drawback recoveries.

Duty drawback is the refund of up to 99% of import duties and fees when a company exports or destroys its products. This enables e-commerce companies to price their products more competitively, reinvest capital funds in growth, and build a more profitable business.

Drawback is in the details. With Flexport, companies have access to reliable and granular import and export data, documentation, and world-class expertise. We’re here to help you. There’s no reason why saving money should be complicated—let us show you how easy it can be!

Benefits of implementing a drawback program

Of course, the primary benefit is the cash refund you’ll be able to retrieve once implementing a drawback program. With those funds, you can look to your growth and expansion plans and put the money into targeted projects in whatever area takes priority. Along with expanding your business, other areas that might benefit from this cash infusion include:

1. Pricing

With import duties and fees out of the picture, you can price your goods more competitively and perhaps even appeal to more foreign consumers. The profitability of an export sales channel growing from this competitive pricing can afford you the ability to explore more regions to sell into.

2. A more profitable business model.

Drawback refunds can be used to offset transportation costs, marketing, expansion, and product development. By funneling operating capital to these departments, you can stabilize your business, increase sales, build the next great widget, the sky’s the limit. Beyond that, the growth of existing export volumes and diversified export sales streams will result in a more sustainable business model.

3. Stop paying double duties.

Being able to recover duties on exported products enables companies to reinvest closer to their home base. Building distribution hubs within the US can lead to new job creation and reinvesting in the local economy. And since drawback allows you to recover duties paid on imports, you can easily fulfill more orders from a US base of operations.

How Flexport Can Help Increase Your International Profitability

If you’re looking for more profitability on international sales, you aren’t alone. Many companies are paying more in duties than they ever were before. We can help get that money back by showing you how to claim the largest drawback refund allowable on your import duties and fees. It’s our mission to make sure that every company has access to the best duty drawback program possible so they can reinvest those savings into their business.

Duty drawback is an excellent way for e-commerce businesses to improve their bottom line while also making themselves more competitively priced, which will lead to increased sales and profits over time. If you want a better return on investment from your international sales, we have the solution for you!

Learn how Flexport is the right freight forwarder to help you with your ecommerce shipping solutions.

Contact Flexport’s dedicated drawback team and sign up for a free consultation with one of our experts today!

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