Managed Markets | Which Shipping Rates Apply?

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Topic summary

A merchant is configuring Managed Markets to collect duties, taxes, and brokerage fees from Canadian customers at checkout, preventing delivery surprises. They’re exploring DHL and UPS options that handle these fees upfront.

Key Question:
Whether custom shipping rates can be created (e.g., “DHL Expedited”) to partially subsidize costs instead of using Shopify’s calculated rates.

Solution Provided:

  • Enable duties and import taxes through Settings > Markets for Canada
  • Use carriers offering DDP (Delivered Duty Paid) service, such as DHL Express or UPS Worldwide
  • Create custom shipping rates via Settings > Shipping and Delivery by selecting “Set Custom Price” instead of carrier-calculated rates
  • Name rates descriptively (e.g., “DHL Expedited - No Hidden Fees”) and set subsidized prices

Additional Context:
The response also addressed USD pricing conversion through Shopify Markets, noting a typical 1.5% conversion fee when customers pay in different currencies. The discussion confirms that custom rates can coexist with prepaid duty collection, allowing merchants to control shipping costs while maintaining transparency for Canadian customers.

Summarized with AI on November 1. AI used: claude-sonnet-4-5-20250929.
2

Hi @GoBlue

I totally get why you’re looking to switch from CAD to USD pricing—managing fluctuating exchange rates with so many suppliers can be a real headache. It sounds like you’ve already done some solid research, so let’s go over your key concerns and make sure you’re on the right track.

Switching to USD Pricing with Local Currency Conversion

Yes, you’re correct that Shopify allows you to set your store’s primary currency to USD, and then automatically convert prices for international customers based on their local currency. Shopify Payments handles this conversion using real-time exchange rates. However, keep in mind that:

  • If you enable Shopify Markets, you can display prices in CAD for Canadian customers, but Shopify will automatically convert from USD.
  • Exchange rate fluctuations may cause minor variations in the displayed prices for customers.
  • Shopify may add a conversion fee (typically 1.5% if using Shopify Payments) when customers pay in a currency different from your store’s base currency.

Now, let’s tackle your Managed Markets & Shipping Rate Questions.

Managed Markets | Collecting Duties & Taxes at Checkout

You’re absolutely right to be concerned about Canadian customers facing unexpected duties, brokerage fees, and taxes at delivery. Fortunately, Shopify Markets allows you to collect these fees upfront at checkout. Here’s how:

  1. Enable Duties & Import Taxes in Shopify Markets

    • Go to Settings > Markets
    • Select Canada and enable “Include import taxes and duties at checkout”
    • Shopify will then calculate these fees and add them to the order total.

  2. Use a Carrier That Supports DDP (Delivered Duty Paid)

    • DHL and UPS both offer DDP services, meaning duties and taxes are paid before delivery.
    • Make sure you select a DDP shipping option when purchasing labels.

Custom Shipping Options for DHL & UPS

If you want to partially cover shipping costs and avoid the default calculated rates, you can create a custom shipping rate in Shopify:

  1. Go to Settings > Shipping and Delivery
  2. Under “General Shipping Rates,” select your Canada shipping zone.
  3. Click “Add Rate” and choose Set Custom Price instead of using carrier-calculated rates.
  4. Name it something like “DHL Expedited (No Hidden Fees)” and set a lower price.
  5. Optionally, create another rate (e.g., “UPS Express - Prepaid Duties”) with a different cost.

This setup allows you to charge a portion of the actual shipping cost while ensuring Canadian customers still benefit from prepaid duties and taxes.

Final Thoughts- Switching to USD pricing simplifies supplier payments and reduces exchange rate headaches.

  • Enabling Shopify Markets ensures Canadian customers pay duties/taxes upfront.
  • Using DHL or UPS with DDP prevents surprise fees at delivery.
  • Custom shipping rates allow you to subsidize costs without using carrier-calculated prices.

Hope that helps! If you need extra help, just let me know asap.
Thanks,
Daisy.