In this post we will develop our previous research on internationalisation in particular to export shoes to the United States. We will start with an example of a business specialised in women’s casual shoes.
Despite being the main world economy, the US also suffered the world financial crisis in 2008, from which they recovered, so well that in 2014 their economic growth reached 2.2%. Despite this, there have been significant variations throughout the years, but the general situation stimulates private consumerism, which is a positive aspect for the country’s imports.
Besides this, we can see that the United States is the largest importer of shoes globally. It is a mature and saturated market. Spain’s position as importer of shoes is improving year after year, with growing exports towards the US and rising prices of women’s shoes.
CHARACTERISTICS OF THE SUPPLY
The recovery of the American economy led to a growth of shoes imports. Most of them are low-cost shoes (from China, Vietnam and Indonesia), but we also need to take into account exports from Italy, which went up to 8% in 2014. Therefore we come to the conclusion that there is an increasing trend in the fashionable, high-quality, high-prices (especially for women) shoes segment.
The total exports from the US rose 4% from 2013 to 2014. Despite the growth, if we take into account the charts and if we compare these figures with the imports, we can conclude that the US can be considered a shoes import country.
CHARACTERISTICS OF DEMAND
The option of export shoes to the United States can be very interesting. According to a survey carried out by the Consumer Reports National Center, the American consumer has an average of 19 pairs of shoes, buys an average of 4 pairs per year and spends an average of 329 USD per year. The American female consumer of European shoes looks for high quality, exclusive and original models and values personalised service at the points of sale. The amount Americans spent on shoes rose 2% over the period 2013/2014 (USDOL, BEA, Personal Consumption Expenditures, February 2015, table 2.4.5U).
Thanks to these data we can state that, despite being a mature market, the US is a convenient country, full of possibilities for fashionable women’s shoes exports.
Export shoes to the United States: marketing factors to bear in mind
In order to have free access to the commercial traffic in the US, we need to respect the Federal Government, State Authorities and Local Authorities regulations. Moreover, there can be codes established by the private sector, which we encourage you to pay attention to for safety and quality reasons (even if they are not mandatory).
When export shoes to the United States, we also need to abide by the general tariff regulations, dictated by the Customs and Border Protection (CBP) federal organ. As for the tariff treatment, if our product were made up of rubber sole and a predominantly textile upper part, the tariff code we would need to use is 6402999081 (20% tariff).
One option would be to get in touch with a local representative so that they could make operations at destination easily, thanks to their market knowledge and potential client portfolio. They wouldn’t need to worry about the import formalities, distribution and payment, as the exporting company would take care of that.
We will now detail the aspects to take into account in order to set our final retail price in the US:
The letter of credit is the most recommended payment method for the exporter who starts an exporting activity for the first time, because there are banking institutions involved in the operations and the letter of credit becomesa payment order. It provides assurance that the merchandise will be paid once sent and as soon as the exporter fulfills the previously agreed terms. It is equally recommendable to consider the option of an export management open policy via CESCE, in order to make sure the payments will be finally made in case of outstanding balance.
Packaging and labeling:
According to section 503.2 of the Status of specific items under the Fair Packaging and Labeling Actand to section (a) of the Title 16 of the Code of Federal Regulations, shoes are not considered a consumer commodity. That is why they are not subject to the packaging and labeling rules of the Federal Trade Comission (FTC) – Title 16 CFR, Part 500.
The only FTC requirement in terms of labeling is that the country of production needs to appear clearly and indelibly when it reaches the final consumer. The expression “Made in EU” is not valid.
The graphic design of the boxes is very important, because even if in most of the cases shoes are not even shown in them, consumers take the product home within them. The quality of the shoes boxes will be in accordance with the product’s quality and their fashionable, sports and high-range appearance.
The industry standards demand that the shoes are labeled with its composition in the upper and inner parts, as well as on the sole.
Eventually, we can conclude that once we have analysed all factors, we can see that exporting shoes to the US is a feasible activity. However, we always need to bear in mind all the matters discussed above.