Making customers aware of import duties, customs Duty, VAT, and others

halolightco
New Member
3 0 3

Hi everyone, i'm relatively new to shopify.

 

I'm based in the UK and am planning on running a store dropshipping items from China to certain regions of the world.

 

I have a product, i have a supplier and i am happy with my purchase price and the shipping arrangement.

 

My cost including shipping is roughly £75 depending on destination country and i'm selling my product for £150.

 

My supplier is sending my product from china to the destination country via DHL Express with estimated delivery of 5-7 days to the countries i was looking at selling to.

 

in my learning it was recommended to look to dropship to 'The big 4': UK, USA, Canada & Australia.

 

not wanting to go live without having all the details to hand i have been doing my research and i have come across the Customs fees, Import Taxes, Handling Fees etc.

 

I understand each country has its own policies, trying to decipher this for the US and Canada seemed a bit tricky so put my attention to selling products to UK and Australia.

 

My understanding of these fees and taxes are that they are the responsibility of the buyer, in my situation the buyer is my customer and therefore if they order something from my store, it is imported to their country from china and they are expected to handle any fees that come their way as a result. Please correct me if i am wrong.

 

I do not want these charges to come as a surprise to my customer and am trying to find a solution to make them aware that these can apply, possibly give them an estimate for how much they will need to pay in their country. 

 

My main concern is that i will make a sale, my product gets shipped to the destination country however it is held in customs and the buyer is sent a message advising they need to pay X amount for the product to be released and delivered to them. As a result my customer refuses delivery and the product is sent back to me i then have to potentially pay for the return of the item? potentially have to refund the customer? leaving me out of pocket and creating more work. Also if my customer is dissatisfied they could leave negative reviews on my pages damaging future business and turning away future customers. If this happens routinely this will be a surefire way of the business going down the drain.

 

My understanding is that no fees will be charged to my customers in Australia unless the imported good are valued at $800 Australian dollars or more? However the Uk clients will have to pay Import VAT and Customs Duty and potentially a handling fee? 

 

Sorry if i have gone on too long but i am really looking for some clarity in this field as it seems difficult to find information out there on this.

 

I would really appreciate any information, or how anyone else in the same situation has dealt with this in the past.

 

Thanks in advance 🙂 

Replies 12 (12)
SaraK
Excursionist
23 0 3

Hello there! I just came across the same topic... I'm seeing that nobody ever replied to your post - that's a shame 😞 
May I ask if you managed to sort this out and how? @halolightco 
Thank you in advace!

EvgenyLukiyanov
New Member
1 0 1

Did anyone solve this yet? can we notify the buyer that they will be charged customs if they order from specific country and the cost of the item is over X amount?

Nitti
New Member
1 0 3

Hi everyone,

I'm also new here and trying to figure the same thing out.  In the meantime I have made my customers aware they are responsible for duties in my shipping policy.  You can have something like this:

"Customers are responsible for all international duties upon arrival.  Please check your local government agency for these costs."

You can word it however you want as long as it's on your site and not a surprise to you customer.  If they don't read your shipping policy then that's a whole different issue.  As long as it's on your site  you are somewhat protected if they decide to dispute it. 

Also, I believe I came across an app that may collect taxes and duties for $10/month.  But I am not willing to fork out more money until I get more sales.

Ideally having these paid at checkout by the customer would be best, that way transactions are completed more smoothly.

Anyone else have ideas?

Thanks 🙂

Zenmaster
Tourist
4 0 6

I am concerned about the same thing and I have decided to take advantage of the banner section of the checkout page.  We are going to create a png that includes my logo but also has text that tells International customers that they are responsible for duties/VAT fees upon package arrival.  It's literally the only solution I can think of that will put the info in front of the end user and not require someone to go to the shipping page.

I figured I would share my idea with you all, in case you felt it would be a solution for you as well.

Jacki

mwhitley
Tourist
4 0 2

We use an app called EasyShip that shows the import fees and duties when they checkout. We have them pay this upfront. This is one of the only app that I know of that gives this option.

JB6
Excursionist
14 0 16

This is so good to know. 

Do they also show brokerage fees? This is a fee that is charged by the carrier (UPS, DHL, etc) that I believe is based on the other fees.

JB6
Excursionist
14 0 16

Having the customers pay on their end is a real pain. When I first sent shipments from the US to Canada, UPS wouldn't allow them to pay online and they had to be there in person to make the payment (I don't remember why).

In addition to the duties / taxes, the carrier charges a brokerage fee, which I wasn't expecting. I asked UPS and DHL if they could give me a flat rate for this going forward so that I'd know what to expect, to no avail.

Here's how I'm now going about international shipments. I look at the fees that were charged for those first few shipments. Now, instead of having the customer pay for them upon arrival in their country, I have the carrier (in my case, UPS) charge my account for all fees (you can't do this in Shopify shipping, you can do it on the carrier's site). When the customer makes the purchase on my site, a "handling fee" appears for their country, which is actually the amount I expect them to be charged for the taxes and brokerage fees and is explained as thus in my shipping policies. This is easy for me because most of my products are around the same cost and weight. You may have to set up different specifications for how this could work for your products.

mwhitley
Tourist
4 0 2
Maybe? I suggest checking it out for the details. I haven't dived into the
breakdown but I do know it shows taxes and duties.
Mickie
New Member
2 0 0

I like the way you handled the duties/taxes for your international customers. We're just now expanding our shipping into Canada from the US. We wanted to be billed for the duties and taxes so that our customer could avoid the hassle you mentioned but UPS said that there was a $15 surcharge for the shipper to pay those so we've decided to set it up with the customer paying. Were you able to avoid the surcharge somehow?

 

JB6
Excursionist
14 0 16
No, I am not able to avoid that fee. I believe that "surcharge" is the brokerage fee that I mentioned. It's the fee they charge for working with customs.

I happened to be corresponding with a Shopify Shipping rep about another matter and asked about this topic. She had some great suggestions. I haven't tried any of them yet, but here they are:

- If you want to continue having fees be charged to your own UPS account, you could consider integrating that account with your Shopify store. This would allow you to display your UPS rates using your accounts to customers, and you would be able to buy labels using your own account on Shopify. This involves enabling Carrier Calculated Shipping, which can be done in three ways: It is available by default on the Shopify Advanced plan or higher, can be added to your subscription for an additional $20USD/mo, or can be added for free if you switch your billing cycle to Annual billing.

- It is possible to display duties/tariffs to customers at checkout. To do this, you would first need to ensure HS codes and region of origins are on your products. Then, enable a third-party app from the Shopify app store to display and or charge these taxes at checkout to customers (ex. Zonos Duty and Tax and Easyship). This solution allows your customers to see the expected duties they will need to pay at checkout.

- Another thing to consider would be updating your Shipping Policy to inform customers that there may be a possible duty or tariff with their order.




Mickie
New Member
2 0 0
Linguaeshop
Tourist
4 0 0

Are you happy with the app? Have you had any feedback from clients?