I run a website catering to a very specific niche within the tropical fish hobby, and have carved out a nice little business here in the U.S., and recently, Canada (www.tanninaquatics.com).
I have received a lot of requests from potential customers in the UK to start making my products available there. I tested the concept first by shipping items to a friend there, and it went well. However, the initial cost of shipping (I used USPS) is not really what concerns me...The bigger obstacles seem to be the Import VAT and Clearance Fee. I realize that VAT is required, but I wonder how vendors shipping ot the US address these fees and additional costs with their UK customers. Do you build some of the cost into the shipping? Is there a way to "prepay" these items on this end, so the customer doesn't have to deal with it, or is there soem other way?
I'm a bit new to the world of international commerce, so forgive my ignorance! My products are relatively inexpensive, and the average order is usually $50US or less. A recent test shipment to the UK cost $52 for shipping, 8 pounds for customs clearance, and around 14 pounds for VAT. All of this on a retail value of around $50US seems pretty high. In real practice, I'd likely charge some sort of flat fee for shipping (and "handling", perhaps?) like I do in the US. Of course, since I was shipping to a friend, I reimbursed him for these expenses...How would you address these issues with real customers? I suppose the shipper is generally not responsible for VAT(?), but what about the customs charges? Or, could it be that for low cost items, doing retail business between the US and UK is not practical? Ultimately, I'd probably have a UK rep on the ground there to handle domestic sales, but initially, I'd liek to control the customer experience.
Any thoughts, resources or personal experiences you have had would be greatfully appreciated!
Thank you in advance!
Tomas from the Shopify Guru team here!
I don't have personal experience with this Scott save for living in the EU myself but thought I'd give my 2 cents and some info I found and hope that helps you.
Different businesses handle customs and VAT charges different ways. It's not uncommon for businesses to simply make it clear within their shipping policies that customs duties will be due on receivership of the products.
If you want more information about selling to the various countries of the EU you can check out the export.gov European Union Country Commercial Guide. While a bit dry to read this is a fantastic resource for all the information you could need about exporting your products to the EU.
In the long term having a UK supplier or a localization of your store would be the simplest option, saving you and your customer the longer distance shipping and VAT calculations. This way you would have faster shipping and more transparent prices for your European customers.
I hope you find this helpful,