The advantage of doing business in the United States is the friendly business environment. However, a heavily diversified market and immense competition make the U.S. potentially challenging for companies that want to start selling in it. We take a look at selected regulations, consumer preferences and trends that are shaping the US market.
1. no VAT, but sales tax
The United States has a two-tier tax system. Accordingly, the following apply:
- taxes at the federal level (uniform throughout the country),
- state taxes.
There is no VAT in the US, but a sales and use tax is collected at the state level.
Sales taxis currently collected by 45 states and the District of Columbia. The tax rate is regulated by each state.
New York State example:
- The state sales tax rate is 4%,
- range of local top rates 0-5% (some jurisdictions have no sales tax),
- Local rates apply to use tax.
Regulations at the state level concern not only taxes, but issues such as data protection.
2. sales tax vacation
The US has Sales Tax Holidays, or tax vacation periods. During this time, individual states (not all) allow sales tax exemptions or reductions. The exemptions and reductions cover specific groups of goods, and the rules and rates vary from state to state.
Examples of products covered by the tax vacation:
- New Mexico - revenues from retail sales of tangible goods that took place at the exact time specified by the state (November 30, 2024).
- Florida - Retail sales of impact-resistant windows, doors and garage doors (July 1, 2022 - June 30, 2024).
- South Carolina - clothing and some accessories, footwear, school supplies, some bedding and bathroom items (August 2-4, 2024).
3. emphasis on data protection
We hear a lot about million-dollar fines for data leaks in the US. Data protection is an extremely important aspect, not only for the authorities that control the proper collection and processing of data.
75% of U.S. consumers believe that data privacy is a human right.
In a HubSpot report U.S. Consumer Trends we can also read that 72% of consumers are more likely to make a purchase if they know how companies use their data.
This means that investing in data security is beneficial both legally and in terms of image.
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4. product labeling regulations
Products offered by weight, measure or number must have labels that comply with the Fair Packaging and Labeling Act. Some are subject only to state laws. Any product that comes from overseas must have a an indication of country of origin in English (unless regulations provide an exception).
5. the American system of measurements
Most countries in the world use the metric system. However, the United States uses a system based on the imperial system. The American customary system of measurement differs little from the British imperial system. The differences relate to measures of volume, such as:
- A British imperial fluid ounce is equal to 28.413 ml.
- An American fluid ounce is 29.573 ml.
6. linguistic diversity
The U.S. does not have an official official language, although in some states English serves that function.
Exclusively English spoken 78% of the US population (2019 r.). An additional language to consider in marketing efforts is Spanish.
People of Hispanic origin are the largest minority group in the U.S. (62%), and their language was the most widely spoken (next to English) in American homes.
Among the 5 most widely spoken languages other than English are Chinese, Tagalog, Vietnamese and Arabic.
7. social media shopping
The United States is the third country in the world with the largest number of social media users (308 million). It is surpassed only by countries such as China and Brazil.
Social media in the US is not only a source of entertainment and communication, but also a shopping channel. The most popular social media platform that US consumers use to shop is Facebook.
According to the information we find in the HubSpot report search engines are the main place to look for answers to questions. However, it is impossible to ignore the role of social media, where 32% of consumers look for answers.
8 Immediate delivery
Due to consumer expectations of fast delivery, the Quick Commerce market is growing in popularity in the US. The product category according to which there are particular demands for delivery time is food. Ideally, delivery should bethe same day, or even within an hour.
This market continues to grow. In 2023, it generated 26 billion dollars, and estimates for 2027 put it at 40 billion.
9. mobile e-commerce
A mobile-optimized website should be a priority for a company that wants to sell in the US. Smartphones generate the majority of visits and sales on retail websites. In Q1 2024, these devices accounted for two-thirds of orders and the majority of traffic.
Expectations of technology are convenience and time saving. Mobile devices fit into this landscape of needs. So does AR/VR (augmented and virtual reality) technology, which makes it possible, for example, to measure clothes and shoes without leaving home. Results of survey conducted in March 2023 says that some 69% of US shoppers would like to use an AR-based app to try on clothes and shoes.
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10. search engine Bing
Bing, although less popular than Google, has a significant share of the search engine market and is worth considering in SEO strategies. Microsoft's search engine has almost 7.5% of the search engine market share in the United States. Of course, Google is second to none in this ranking, claiming an 87.45% share.
Bing's user satisfaction index is 77 points out of 100, and has remained at 82-75 between 2010 and 2023. In comparison, Google's rating in 2024 is 81 points. In this evaluation, indicators such as the quality of the mobile app, the number of ads on the site or privacy are taken into account.
Summary
It is helpful to enter the U.S. market to understand local regulations, consumer preferences and effectively use communication channels. To sum up:
- Taxes in the U.S. are complex, with differences occurring at the state level.
- Labeling regulations and the measurement system require products to conform to U.S. standards.
- Data protection is a priority for consumers.
- Fast delivery and convenient availability of offerings via smartphones is a standard expected by customers.
- Linguistic diversity is worth considering in marketing communications.
- Social media, especially Facebook, is an influential sales channel in the U.S., and the Bing search engine can be an additional source of website traffic.
Source [accessed August 26, 2024].
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