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PeteHeat
8th December 2009, 16:31
Hi this is my first post so hope this is the right place.
I'm about 2 months away from trading (as a sole trader) online with a website selling wigs and hair extensions. These are made to order in China. Initially (for the first few months) I will get the pieces sent to myself so I can run a quality check. However the plan is to eventually have them sent direct to the customer.
What has become apparent in the last year whilst dealing with the factory is when they post items to me they do not always declare the value correctly: especially if it is a small order. If it is a single item they put 'gift of nil value' on the customs declaration which is not true. The true value is over $100. Therefore I am not always paying import VAT and the courier's handling fee.
When I am sending the items direct to the customer they will be liable for the import VAT (I will have adjusted my prices accordingly). Should I be concerned if the factory don't fill in the customs form correctly? What liability is there on my part to ensure all taxes are paid? I'm thinking specifically of a VAT inspection and being held liable for unpaid import VAT.:eek:
Thanks in advance for any help anyone can offer.

dingbat
8th December 2009, 16:35
Yes, many Chinese companies give lower values on goods they ship out because many customers ask them too.

Just tell your supplier you want the proper value on the invoice next time.

btw, why do you want the factory in China to send directly to the customer? That's just suicide. You'll be out of the picture there and then.

PeteHeat
8th December 2009, 16:51
Thanks for the quick reply dingbat.
Yes I am concerned about being out of the picture so I will actually get them to use an address and sender's name that doesn't identify the factory I am using. An individual would find it hard to order direct because there are so many different variables on each wig/extension. There are no universal standards for the way they colour hair, how many hairs per inch constitute a certain density, what knots are used, what type of hair is used, what base material is used. It's taken a year of tooing and frooing to understand how they work and getting a standard for my orders.
The main reason for getting the pieces sent direct is one of speed. The factory prioritise my orders and with direct delivery I can offer a production time half that of any competitor (3 weeks versus 6 weeks).