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Customs & duties: a comprehensive guide for international shipping

Georges Bchara

Thinking of expanding internationally and wondering about the necessary procedures? These tips will help you!

Customs & duties: a comprehensive guide for international shipping

Thinking of expanding internationally and wondering about the necessary procedures? Do you want to find out all there is about duties and customs between countries as well as the related paperwork and logistics? The tips are going to help you open up to the world, literally!

Expanding across borders has become one of the best ways for eCommerce businesses to pursue growth; and the numbers don’t lie.

According to easyship.com:

  • International sales are growing at a much faster rate (25%) compared to domestic ones.
  • International merchants have 12.5% more sales volume.
  • Global ecommerce sales will reach almost $4 trillion USD in 2020.


Many sellers soon find that cross-border eCommerce is plagued by a myriad of legal and financial regulations. These regulations differ from country to country, meaning merchants must stay informed of the laws in the country they plan to export to.


With the continuous expansion and development of the numerous means of communication and transport, online trading is becoming easier! And now, with our help, nothing will stop you from taking your business overseas.


Checklist

The following matters, which we’ll be detailing here, are to be considered when shipping internationally:

  • Checking the laws and regulations
  • Learning about the duties and taxes
  • Filing the correct paperwork and documentation
  • Charging your customers accordingly
  • Planning your shipments with ecomz


Almost all merchants have to go through these necessary procedures in order to deliver, and eventually, fulfill their orders correctly and effectively.

Laws and regulations

The first thing you need to check before shipping your products beyond your borders is the laws and regulations of the receiving countries.

These rules can vary immensely between one country and another especially when it comes to identifying dangerous products. For example, Kinder surprise eggs are banned from entering the USA but they’re perfectly legal in almost all other countries!!



To find out more about this, websites like export.gov and UPS.com have provided us with tools allowing us to search for country-specific rules and regulations. Make sure you check those out to guarantee a successful order fulfillment process.


Duties and taxes

Duties are a mandatory element when introducing a new product to a new market and, you guessed it, these tariffs tend to differ in each country. However, product and shipping details can help you estimate the cost of clearing your items from customs.

There are 2 types of taxes you should be aware of when shipping internationally: the Delivery Duty (DD) and the Value Added Tax (VAT).

  • Delivery Duty: this tariff has 2 types:
  • Delivery Duty Paid (DDP) which means that the merchant settles all the fees related to the shipment.
  • Delivery Duty Unpaid (DDU) meaning that the customer is the one responsible for paying the fees of the shipment. Keep in mind that if you wish to go with this option, you have to make it clear for your customers!
  • Value Added Tax: unlike the Delivery Duty, this tax is a fixed percentage but it differs from one country to another.

In case you were wondering how to calculate the duties of every shipment, check this duty calculator and price your products accordingly.




Export documents

Various factors such as shipment, payment, and transaction help determine the necessary paperwork for international export however, some documents are common to almost all operations:

  • Harmonized System Code (HS Code): due to the numerous variables involved in international shipping, Harmonized Codes standardize each product and classify it which makes it easier to determine its respective duties.
  • Commercial invoice: which contains all the information about the seller and the buyer in addition to all the details about the product and the shipping method.
  • Export packing list: this document includes additional details about the product such as type, size, quantity, and weight but it also reflects the mode of transport and carrier data.


Apart from those, additional documents such as certificate of origin, insurance documentation, manufacturer ID (For USA imports), export declaration, transport document, export permits, dangerous goods declaration, exchange control document, inspection certificates, and consular invoices may be required depending on the type of the products and their legal status in the country where they’re being shipped to.

Always keep in mind that all information you share in any of these documents must be correct and complete to avoid all unwanted complications and delays.



Shipping tips

As always, all processes are facilitated with ecomz! Therefore, if you wish to start shipping internationally, make sure you apply the following advices:

  1. Targeted shipping: if most or all of your shipments are designated for a single country then make sure you master it! Study the laws and regulations of that country and don’t forget to learn all about its duties and taxes. Make sure you use the tools mentioned above. For example, if you’re business is based in Europe and most of your shipments go to the United Arab Emirates (UAE) then it will highly benefit you to know all there is about that city.

  2. Customer duty: Most of the time in ecommerce, the customer is responsible for covering the duties and taxes that might arise from international shipping. That’s why, make sure you incorporate this added cost into your prices and be very clear about it with your clients. In some cases, there are specific shipping agreements between countries which dictate special rates, and sometimes even eliminate them entirely! One of the most famous agreements is the one between the USA, Canada, and Mexico, known as NAFTA for example.

  3. Consolidated shipping: if you are shipping a large number of orders to a specific country, you can group them all in to 1 full shipment (also known as Full truck or container load) and transport them as one package. Once it arrives to its destination country, the single shipment is split into many orders and delivered to your customers. This method, known as consolidated shipping, can be extremely effective in terms of cost, speed, and damage control since you go through the custom clearance once instead of doing it for every single shipment.

  4. Hire a broker: it’s always beneficial to let the pros do it! Customs brokers will hugely optimize the customs clearance process by handling all the tasks in the best possible way. They can also act as consultants and usually charge a monthly fee, per shipment, or work on commission. You’ll be able to expand your business globally without worrying about the process.

That’s not all, ecomz offers you the chance to integrate with many local and international couriers or you can choose your own custom shipping solution.
DHL express, for example, is the world’s leading logistics company and it can make your job much, much easier! Make sure to check their website to learn all about their services in addition to other valuable information about international shipping.

Don’t forget that you can always revert back to our manuals and discover all there is about ecomz shipping.


 

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