January 9, 2023

Understanding Kits, Sets, or Bundles When Shipping Internationally

Reading Time: 4 minutes

Creating kits, sets, and bundles is a great way to offer value to your customers and sell more products. But when shipping internationally, you must meet global standards for what constitutes a kit, set, or bundle. Who sets these rules? That would be US Customs and Border Protection (CBP), the World Customs Organization (WCO), and other customs agencies worldwide.

Read on to understand if your goods meet the specific customs requirements to qualify as a set and, if so, how to classify them correctly. For even more detail, read our help centre article on the subject here.

How Does Shipping Bundles Internationally Work?

Shipping products as kits, sets, or bundles is convenient and cost-effective for customers and merchants. But when it comes to shipping bundles internationally, businesses need to make sure they’re classifying their products correctly.

When shipping from the US and goods are classified as a kit, set, or bundle, they receive a 10-digit HTS code according to the Harmonized Tariff Schedule set by the US International Trade Commission (ITC).

Your products need to meet requirements to be classified as a set, set, or bundle and use one HTS code for shipment.

If your products meet this criteria, you can classify your shipment by the material or component that gives the set its essential character. Let’s say you’re selling a kit containing spinach and chive linguine, parmesan cheese, and basil pesto sauce. You may then classify the group of products as a “pasta kit” rather than listing each individual component.

If your products don’t meet the threshold to be classified as a set, you’ll need to list each item separately. This means identifying each item with a unique HTS code and customs value.

Do Your Products Meet the Requirements for a Kit/Set/Bundle?

The General Rules of Interpretation (GRIs) outline three requirements for items to be classified as a set for international retail sale. All three need to be met, so make sure you answer “yes” to EACH one:

  • Does your shipment consist of at least two different articles that are classified under different headings? In other words, do the first four digits of their HTS codes differ?
  • When the products are put together, do they meet a particular need or allow the customer to carry out a specific activity?
  • Are the items suitably assembled for sale directly to users without needing to be repacked?

If you answered “no” to any of these questions, your products cannot be classified as a kit, set, or bundle. You’ll need to itemize each product separately. This is often the case with loosely grouped items like promotional marketing packs or sample gift collections. While these product groups may have components from different headings, there may only be a vague application, and/or they may not be packaged appropriately for direct sale without repacking. Therefore, they can’t be classified as a set.

If you answered “yes” to all, your products may be classified as a kit, but you’ll need to understand how to classify your bundled items correctly.

How Do I Classify a Set for International Shipping?

To classify your products correctly as a set, you need to assign an HTS code for shipment. This code identifies the correct customs duties to be paid and is determined by the set’s essential character.

Determining the essential character of a set is crucial for correct classification, but it varies between goods. It might be determined by:

  • the nature of the products’ material or components;
  • the quantity, weight, value, or bulk of the products; or
  • the role that each item plays in using the products.

For our pasta kit example, the component of the set that gives it its essential character is pasta. Without the pasta, you don’t have a pasta kit. You just have some toppings. Therefore, the HTS code for the pasta kit would be pasta (1902).

We recommend referring to CBP’s Informed Compliance publication on the Classification of Sets for more information.

A Real-World Example: Your Delicious Pasta Kit!

Establishing whether your goods qualify as a set is fairly complicated, so let’s look at a basic example that includes assigning the HTS code according to the set’s essential character.

Remember that your goods must meet a particular need or help a customer carry out a specific activity. (Refer back to the Classification of Sets for more details on what qualifies as a “particular need” or “specific activity”.) This means each component needs to be used together with another to achieve a single purpose. In other words, the individual products are clearly intended to be used together.

Let’s think back to that pasta kit that we mentioned earlier. We’ve put together a product grouping of:

  • linguine, which has an HTS heading of 1902;
  • a jar of pesto sauce, HTS heading 2103; and
  • parmesan cheese, HTS heading 0406.

These are packaged together, labeled, and sold to customers as a “Pasta Set.”

Why does our pasta set qualify? Firstly, it consists of at least two different articles, which are classified under different headings. Secondly, it consists of products put together to carry out a specific activity: making a delicious pasta dinner. And thirdly, it’s packaged for sale directly to users as a pasta set without needing to be repacked.

Now, our pasta set needs an HTS code. This is determined by the essential character of the set, which is pasta. Therefore, we’ll begin with the heading for pasta 1902. Assuming the pasta contains egg, it will be classified as HTS code 1902.19.4000.

Navigate Complex Customs Compliance with FlavorCloud

FlavorCloud is a headless global logistics platform transforming cross-border shipping and Global Trade Compliance for modern ecommerce.

Dynamic pricing, dynamic routing, data-rich, and AI-optimized—FlavorCloud provides the best shipping and customs services at the most affordable price via our Global Carrier Network—the world’s largest cross-border network of premium parcel carriers and customs services.

We’re here to help you navigate complex international shipping and compliance challenges and make your international business flow seamlessly.

Trilby Rajna

Head of Content & PR at FlavorCloud, with a passion for combining creativity and data. Please get in touch with any PR requests, relevant guest post pitches, and collaboration ideas at trilby.rajna[at]favorcloud[dot]com.

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FlavorCloud Team

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