Expand Your Brand to Mexico: Strategies to Bring Your eCommerce to Mexican Territory

In recent years, e-commerce has become a global phenomenon, allowing companies to expand their reach beyond national borders and access new markets. Direct-to-consumer sales through e-commerce channels are valued at more than $6.3 trillion in 2023, with an annual growth rate of 10.4%.

However, expanding internationally also presents unique challenges, including navigating complex regulations, customs, and taxes. For US and global direct-to-consumer e-commerce brands looking to expand in Mexico, using an Importer of Record (IOR) and a Merchant of Record (MOR) can be a total game-changer, helping launch the brand quickly and with lower shipping costs.

REQUIREMENTS FOR IMPORTING TO MEXICO

Importing and selling in Mexico is not without challenges. The country has strict regulations regarding the importation of goods, including restrictions on certain products and specific permit and certification requirements.

This necessarily involves:

• Obtaining a tax identification number, known as the Federal Taxpayer Registry (RFC).
• Registering your company with the National Customs Agency of Mexico (ANAM).
• Creating a local entity in Mexico.
• Obtaining permits and certifications for cosmetic and food products through Mexican regulatory agencies such as COFEPRIS or specialized providers such as Freyr Solutions.

Failure to comply with these regulations can result in costly fines and penalties, including seizure of imported merchandise at customs.

Mexico also has complex tax laws, including Value Added Tax (IVA) and customs duties, which vary depending on the type of product and its country of origin. Using an IOR and a MOR can be an effective strategy for global direct-to-consumer brands looking to expand in Mexico.

What Are IOR and MOR?

An IOR is a third-party service provider that acts as the legally registered importer of your products.

Benefits of using an IOR:

• Foreign e-commerce brands can rely on the expertise of these service providers.
• They ensure compliance with local regulations and tax laws in Mexico, including obtaining permits, managing customs, and paying taxes.

On the other hand, MORs offer a similar service but focused on the sale of products. A MOR acts as the merchant of record in sales transactions in a foreign market.

This includes:

• Collection of payments.
• Refund processing.
• Compliance with local tax laws.

In Mexico, the MOR is responsible for collecting and remitting IVA and other taxes to the government.

Without these services, a brand would have to handle permits, licenses, customs, and taxes alone, which can delay a launch by 12 to 18 months and affect its profitability.

3 Advantages of Working with an IOR and MOR in Your Company

Compliance with local regulations: IOR and MOR providers ensure that your company complies with tax and regulatory laws, managing customs, permits, and certifications.

Time and cost savings: Delegating to these providers avoids long and expensive processes, accelerating the launch and reducing expenses.

Experience and knowledge: IOR and MOR providers have the necessary experience to guide your company, reducing risks and increasing the probability of success in expansion.

Cubbo as an Expansion Partner

Cubbo, through its IOR and MOR services that form the core of its International Expansion team, has helped global e-commerce brands overcome the logistical and regulatory barriers to enter the Mexican market, allowing them to focus on what they do best: selling their products.

With Cubbo, the launch can be completed in 30 to 60 days, depending on the type of product and regulatory requirements. Additionally, thanks to its agreements with local carriers, brands can reduce shipping costs and improve the accessibility of their products for the end consumer.

In short, using an IOR and MOR is an ideal strategy for D2C brands looking to grow in Mexico. Once inside the country, Cubbo fulfillment services handle all order management within Mexico.

If you are a global D2C brand interested in expanding to Mexico, working with a reliable and experienced partner is key. Cubbo combines deep market knowledge, established relationships with carriers, and flexible solutions that help your brand grow and consolidate in Mexico over the long term.