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From the TheGenieLab US - TheGenieLab Blog blog



Having an international capable store is important to have the reach to serve clients worldwide. What is more complex is the ability to estimate and deliver the correct landed price/cost for your clients with confidence without errors that could impact your profitability.

 

The challenges of Duties and Tariffs

With Custom’s clearance that is about to impact the UK with Brexit looming in the next few months, the ability to have European goods go back and forth with the UK is now a big concern as Tariffs/Taxes will be imposed on certain goods, as well as delays in logistics due to inspections.

While clients will have to get used to the changes in logistics and costs of doing business, being able to deliver to clients a landed estimate is crucial for them to decide and transact the goods they have in their baskets.

As a merchant, uncovering the impacts of your goods per country/region to where it is being shipped to can be a chore, but communicating it can even be tougher in your store. You have Duties, Tax, VAT, brokerages, disbursements, bonds, ancillary fees, and all kinds of various costs that can impact the total for that one item. Once you have your goods mapped out, organized and ready to upload into your store – how is that done?

 

Enhancing your store to handle Duties and Tariffs

Depending on your eCommerce platform, finding the right App/Plugin would be the first step to uncover your options in managing to price with Duties and Taxes.

Take for example Zonos as a Shopify App – it is a thorough package that allows you to set your rates.

https://apps.shopify.com/duty-and-tax-calculator-iglobal-stores

There are additional options on Shopify, here is a listing of them for Shopify.

Shopify TaxJar: https://apps.shopify.com/taxjar

Shopify Tax Receipts: https://apps.shopify.com/tax-receipts

Shopify Dual Price Display PRO: https://apps.shopify.com/b2b-dual-display-of-tax-included-and-tax-excluded-price

Shopify Tax Exempt Manager: https://apps.shopify.com/tax-exempt-manager

Shopify Invoice + Sales Tax USA: https://apps.shopify.com/invoice-sales-tax-us

The above list has variation and applicability to your business, your clients and international tariffs/duties/taxes/fees.

 

Example of what to expect from your App

An example from Simply Duty will describe to you on what an imported item looks like from the USA to the UK:

Example:  CIF – Contract, Insurance, and Freight

This considers the cost of shipping & insurance. This is the method that is most commonly used and will produce higher costs of the two possible calculation methods.

Goods value: £5000 (purchased from outside of EU converted from USD to UK£)

Cost of Shipping/Insurance £500

Sub Total 1: £5500 (amount duty is calculated on)

Duty on Sub Total 1 @3.5%: £192.5

Sub Total 2: £5692.5

VAT @ 20% on Sub Total 2: £1138.5

 

TOTAL Landed cost including duty and VAT: £6831

 

So in this example, the total of UK duty and VAT (tax) payable to import these goods to the UK is £192.5 + £1138.5 which is £1331.

Source: https://www.simplyduty.com/calculate-uk-import-duty-taxes/

 

Note – a calculator is available to audit your calculations to ensure your data in your store outputs the correct landed costs.

Calculator: https://www.simplyduty.com/import-calculator/

 

Conclusion

If you are challenged in this department, then the tools should do a decent job to assist you in setting up the right values for the import/export tariffs/duties/tax/fees. If you do not have this in place and rely on manually quoting a price, the delay in doing so could cost you a sale. Avoiding refused packages (as the local authority imposes its tax/tariff on the end recipient), angry clients that had an unexpected charge, and general customer experience issues. Most clients that are knowledgeable understand that there are duties and taxes to be paid. Making it easier for them to understand landed costs is the best way to do business with them.