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CEOWORLD magazine - Latest - CEO Spotlight - Baja Fulfillment and Section 321: A Paradigm Shift in Logistics Strategies

CEO Spotlight

Baja Fulfillment and Section 321: A Paradigm Shift in Logistics Strategies

Bobby Armijo, cofounder of Baja Fulfillment

Baja Fulfillment was founded in San Diego in 2019 by partners Bobby Armijo and John Borsini to leverage Section 321 on behalf of businesses importing goods into the United States from China and other locations abroad. The company works with various e-commerce brands ranging from publicly traded companies to smaller-scale startups with at least 10,000 online orders per month. The categories vary from small electronics to subscription boxes to apparel both for men and women.

Understanding Section 321 is simple: US law allows for the duty-free entry of shipments valued at or below $800. This means that goods with a declared value of $800 or less can be imported into the United States without incurring duties or taxes. The implications of this provision are profound, especially for e-commerce businesses shipping direct to consumer AKA: Online retailers.

Borsini explains, “I’ve been facilitating cross-border logistics for over 20 years with my own brands—Rude Boyz, GWP, Exit 26—but mainly for my retail accounts like Wal-Mart, Kohls and other big retailers, and of course we don’t see the benefit of section 321 with large retail orders like that. When the opportunity came to help other brands with DTC fulfillment whose orders are less than $800, it was the proverbial no-brainer to invest time and resources to start Baja Fulfillment with Bobby.”

Baja Fulfillment’s Strategic Approach

Because Baja Fulfillment has two locations in Mexico—near San Diego, CA, and at the McAllen, TX, border—it provides a proximity advantage. Despite being an international fulfillment company, its facilities are in close reach of the US—within 30 minutes—ensuring speedy and efficient logistics operations and a safe place for customers to store inventory.

In the usual scenario with a competing domestic 3PL, when e-commerce companies import a container from China or other parts of the world, duties are paid upon the container’s arrival at the US port. Subsequently, a truck transports the container to the 3PL in the USA, where it is received. “Receiving” consists of unloading the container, scanning inventory into the warehouse software, and stocking the goods in bins and pallets so the product is easily accessible for order picking as orders come in from online customers.

In the case of Baja Fulfillment, this step is simply executed just miles over the border. Upon a container’s arrival in the US, Baja takes charge of the pickup using their bonded carrier and transports goods through the country and down into Mexico. Which means the goods never clear customs in the US.

The containers are entered into Mexico under Baja Fulfillment’s Maquiladora license. This license allows the company to bypass duties when entering Mexico, which in itself is the secret sauce. When the container reaches one of the two facilities in Mexico (in aggregate they have space of approximately 700k square feet—think 5 Costcos!) where it is unloaded and received like any 3PL in the US.

From here, the Baja Fulfillment team does pick-and-pack on orders the day they are received. Each order is meticulously labeled with the carrier designated for the US (FedEx, USPS, UPS, etc.) and subsequently loaded onto a truck in Mexico for transportation back across the border into the US the same day the order was placed. As far as the end consumer is concerned, there’s no difference than if their order had been packed in the US. The shipping label on the packages actually show a return address to San Diego, which is also where returns are sent.

Moving this straightforward process across the border creates unparalleled savings for manufacturers and retailers. While this strategy is not new, Baja Fulfillment is systematizing the process, making it impossible for companies to ignore.

Baja’s approach to avoid paying duties and tariffs involves maintaining the continuity of your supply chain. Your factory supply chain stays the same; you simply divert your fulfillment to a new 3PL.

The Partners

Partners John Borsini and Bobby Armijo bring an unusual combination of skill sets to their logistics brainchild.

Borsini has over 40 years of experience in the apparel industry, having launched Four Seasons Design, Inc. in 1999. Prior to launching FSD, John was the president at Seabell Sportswear in Washington for ten years. He has experience in everything from product development to sales to executive leadership. John is the majority and managing partner at Baja Fulfillment. He’s leveraged his experience and relationships in the apparel and subscription business to quickly establish Baja Fulfillment Services as a leading independent fulfillment company since its founding in 2019.

Of the company’s rapid ascent to the top of the industry, Borsini says,“Baja Fulfillment is just scratching the surface. We have expansion plans not only in our current geographic locations, but in other parts of the world as well. There’s no shortage of opportunities to save clients money and to provide a higher level of service than most of the domestic 3PLs, which seem to consistently break their promises to their current customers. Baja Fulfillment has an internal motto: make it happen, no excuses!”

Armijo’s entrepreneurial spirit has led him to create multiple 7-figure businesses. He has been extensively involved in real estate investing in Montana and financial planning for over two decades in San Diego. He has a black belt in Brazilian jiu-jitsu and owns four academies around the globe. As Baja Fulfillment’s President of Business Development, Bobby likes to point out that working with the company can do more to impact his customers’ bottom line than any other single option in their existing business flow, and it can happen virtually overnight.

He explains, “There’s really nothing else you can do in your supply chain that will make such a massive difference in your profit margin. And, you can essentially redistribute the newfound profit to your top line, because the savings you realize can be used to buy more product, hire better, spend on marketing, and gain customers via ad spend, which in turn can create much more revenue for your e-commerce brand. Saving up to 100 percent on your import duty is something that can have an immediate effect—and frankly this is the only thing of this magnitude that can be changed without disrupting where you make your products overseas. And I know this is the case because my existing customers have expressed that in order to squeeze profit elsewhere, they would otherwise be taking big risks with the quality of their products…especially when they’ve come to trust and love their existing factories.”

Bringing it to You, Faster

Baja Fulfillment’s mission has always been to save money for their clients while getting packages to their customers with no lag time when compared to domestic 3PLs. The new facility across the Texas border was opened 14 months ago to service the east coast more quickly and inexpensively for outbound shipping for its current e-commerce customer list. Although no date has been set, an expansion in Toronto, Canada, is planned so the upper-north-east of the USA can also receive the benefit of shorter transit times and, of course, cheaper outbound shipping.

Contact Baja Fulfillment

Virtually anyone who pays large amounts in duties and tariffs and ships more than 10,000 packages per month is a good fit to work with Baja Fulfillment. Visit their website at https://www.bajafulfillment.com/, and email bobby@bajafulfillment.com to get in touch with them today.


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CEOWORLD magazine - Latest - CEO Spotlight - Baja Fulfillment and Section 321: A Paradigm Shift in Logistics Strategies

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Christina Miller
Associate News Editor at CEOWORLD Magazine. I lead the reporting team that covers US financial services and I write a business column for the opinion section. I write news pieces about the US and European market for start-ups and interview CEOs for our interview slot. I also presented one of the CEOWORLD magazine's early podcast hits, Money Stories, in which I persuadeded notable CEOs to share insights into the breaking news, moments of crisis and key decisions that enabled them to build successful international companies.