Shipping overseas, specifically the USA

[gary]

About 5% of our orders currently go to the US and I am looking at the possibility of increasing this considerably. One of the problems that concerns me though is how many orders get lost along the way. It's bad enough in the UK (though to be fair it's increasingly rarer that an order never arrives), but I've already had one US order that arrived empty - the contents were removed (according to the buyer anyway). One of the things I have discovered is that you can usually choose to send a small order by letter or as a small package - a small package requires you to complete a customs form, whereas the letter doesn't, and it's more expensive. Does anyone have any experience as to which is better?

I would also be interested in any other opinions and experiences of other forum members with regard to shipping overseas.

Gary

[SillyJokes]

We send between 5 and 10% to the States and other countries, usually as a small package and do not have problems with non arrival in the States.

Our main problem is that they often think they have bought from a US company in US dollars. Obviously they must think we are super cheap and can't resist a bargain. Then the exchange kicks in on their credit card bill and they are understandably upset.

It's obviously something we having solved properly on the site although on every single product page we state the currency and you can change to dollars in the basket, when you are also changing the country of delivery to USA from UK.

Filling out the customs label is pretty easy - it's just the weight and value of the parcel plus an air mail sticker and 'small packet' written on (we use a label we print ourselves for this small packet bit).

Obviously you cannot maintain free shipping overseas - it just costs too much and does take that little extra work to process. You might also consider using more sturdy packaging if it gets opened. We use tough, opaque polybags which do not include padding for stuff that can be without extra padding, like wigs, flags etc.

We do very rarely get bizarre questions from the States where litigation is rife. Someone wanted to know if our f**t powder could have caused illness in it's victim and we had to get the data sheets etc. (It is harmless).

Lastly, send enough to the States and you can use a sort of packet post the costs of which reduce with the increased quantity. You are probably already using packet post int he UK if your send out more than 5,000 parcels a year.

[gary]

Thanks - that's really useful!

Regarding the $ / £ issue, most of the people buying from us have known it's a UK site, but I've now added various country flags to each page as well so that they can click on their own flag to use their currency. They can also select the currency they want to pay in in Worldpay, which they seem to use though I had one call from someone who asked me what their order would cost in $ so they could budget for it.

I've sent some orders as a letter and others as a small package. They time it takes to arrive seems to be the same, so the only difference is the price and the stickers from what you say. I'll keep experimenting! We don't offer free shipping outside the UK - as you say it is more hassle and quite a lot more expensive. All ties are sent in padded envelopes which are pretty sturdy.

Thanks for all the tips! :)

Gary

[SillyJokes]

Are your ties boxed? If not, consider polybags like these?

http://www.aid-pack.co.uk/webapp/wcs/stores/servlet/ProductDisplay?langId=-1&storeId=10001&catalogId=10001&productId=1148450

they are much lighter (and cheaper) than padded bags for over seas shipping and are really tough. I coudl send you an exmple if you want.

Caroline

[gary]

Hi Caroline

No, the ties aren't boxed - they just have a polythene sleeve. Thanks for the link- I'll have a look at those bags.

Gary

[gary]

Well, I'm now sending orders to the US as Small Packets but I've still got to wait a while to see if there are any problems. What with all the address, airmail, customs forms, small packet stickers, and the our address on the front, it certainly gives a Christmas decorations feel to the package!

So far, I've had one person complain because they ordered a tie for £14 and their credit card said $30 - clearly they didn't realise it was a UK site, and they missed all the little flags everywhere so I've made it even clearer now! Some people do prefer to pay in pounds so that their credit card company decides the exchange rate rather than us.

I just have a question regarding the customs form though. At the moment I tick the boxes as Gift and Other, and fill in the item description, weight and value. Do I need to fill in the Commercial Items section as well, or is that just if yuo're sending goods to a company?

Gary

[SillyJokes]

You will always get Americans ordering in pounds and thinking they have ordered in dollars - that's because, I think, the pound sign does not display on their screens - they just get a hash sign. Obviously because no other country exists in the world they automatically assume all websites are American.

What you are sending is not a gift, it is a commercial product therefore you should not be ticking the gift box. But you might want to check this with your royal mail support person.

We have few other problems sending to the States. Returns can be a small problem because they cannot use our freepost address for this.

[gary]

Thanks Caroline - I'll check with Royal Mail.

I've now added the following in the product details pages and the shopping cart which should hopefully cut down on the confusion somewhat:

"Prices are quoted in UK Pounds by default. Please select your preferred currency."

Gary

[gj]

The question of gift or otherwies affects the duty/tax they pay on import doesn't it?

I've had stuff sent to me from abroad which the supplier has marked as a gift and I have not had to pay any duty or VAT, but I do not think they were correct to do this.

On another, I got a letter from the Royal Mail saying I had a package for delivery and if I paid the duty and VAT they would forward the goods to me.

I think a lot of people ordering cross border forget about duty/vat etc. Qusetion then is whether you should highlight this within the site, or ignore it and let them suffer the tax etc in their country. Fine if it is a one off order - you've made the sale and they end up with it costing more than they thought. But if they might be placing repeat orders they might not place those orders if their first order tr=urned out to be more expensive than they thought - and delayed whilst the duty etc is collected. If you have the different flags, could you have a note for each of those countries as to the fact that tax/duty etc will be payable on import? Probably needs a marketing person to tell you with that is a plus or a minus!

Graham

[Loui]

I am shipping small packages of small boat parts more and more to the UK and parts in EU but am not experienced with the "VAT" tax and many buyers request that I quote the "VAT" as a lesser amount than they actually paid. Is it important to be accurate about what the item cost? It is important to enclose an invoice with the package? I have tried to research on internet, but it is not clear. Any help on shipping to EU countries greatly appreciated. Thanks.

[ken_uk]

The main problem I found with the small package rate, is it only goes up to 2 Kilos, after that the prices go up through the roof.

Insurance is extra if its required also.

Lots of people do send commercial packages as a gift to try to avoid import duties etc, but they should not be, as obviously if its a item purchased for themselves, its not a gift! But its quite common on places like ebay, some sellers even state they will do it in a auction!

I have had more problems sending inland mail than international mail, oddly, the problems increased when I used smartstamp...

Dont forget, if you increase sales to the USA, you may have to deal with more people from America, and I have found they either tend to be very friendly, and great customers, or incredibly stupid and arrogant. I would have to say USA buyers cause more trouble on average (usually down to a complete inability to understand simple concepts) than UK buyers in my experience. (Thats not to say we dont have idiots in the UK, they are definately on the rise...)

But on the other hand, they are not all like that, my very first ebay sale was brilliant, and that was to an American (I sold a set of 3 Outer limit's VHS videos and they went over 80 pounds - turns out the bidder was the author of one of the episodes!)

[ken_uk]

Great introduction to a forum Andy618, spamming a forum and spamming a member (me) via pm.

Way to go.

[Loui]

Hi Ken, Regretably, I forgot to mention I am one of those stupid Americans and I may have even been called arragont on occasion but not to my face, who is shipping to the UK, hence the reason I don't know much about the VAT system as that is probably the only tax they haven't installed in the US as yet. So, while I am happy you have enjoyed such wonderful returns, I just wanted to know about the shipping/VAT system going from the USA to UK and EU parts. It is interesting people deliberately, but we are worried about the repercussions of that method so we are trying to investigate. :)

[sertav]

Re UK & EU VAT

As far as I understand it, if your client is VAT registered in their own country they must supply you with their VAT number.

Once you have it, you bill them net of VAT and they declare the purchase to their version of HMRC and you declare it here as 0% (exempt?) VAT sale.

If, on the other hand, they’re not VAT registered, then full UK VAT is due at the appropriate rate.

For instance:

Item cost: £100 GBP
UK VAT rate: 17.5%

For vat registered client you’d bill it at £100 GBP

If not registered, you’d bill it at £117.50 GBP

Hope this makes sense…

[Loui]

Yes, thank you. Most helpful. Loui

[kulture]

Now I am confused. I always thought that you could NOT charge VAT unless you were VAT registered. Thus Loui, you probably do not have to charge VAT as you do not pay the VAT to the UK (or other EU) government. Your customers however have to pay VAT on entry into the country. This is normally paid, and the charge passed on, by the courier.

For the UK there is a low level exemption of £18. Thus any package valued at under £18 can be imported VAT free.

So in your case, if you are selling an item for £100, then you sell it at £100 and your customer then has to pay an additional £17.50 to customs when it enters the country. (and probably a handling fee as well).

What I suspect the customers are asking you Loui, is to put a lower invoice amount on the customs declaration (this is called fraud) so that they pay a lower VAT/import duty. The danger of doing that is the whole shipment can be seized by customs.

sertav's explanation is what happens if a VAT registered business ships goods to another business from one EU country to another.

[frauke]

At "the day job" we ship 85% of what we sell overseas, but only about 3% to the US.

Anything small goes UPS, unless a customer makes there own arrangement (we ship Ex-Works, so technically the customer should collect from our premises). The web site is very good - from organising the paperwork through to tracking & POD's. (Tracking refs are put on invoices which are posted seperately). You can pay extra for insurance, but all shipments are covered up to about £65 automatically. We have only ever had one claim for something that cost us £50.00 to replace - they paid out within 2 weeks of filing in the claim form.

We ended up with UPS because we have the odd import from the US, and found our suppliers prefered them - and by giving them permission to charge our UPS account - it was easier to deal with the import. UPS will give good discounts if you tell them you have the volumes - (We just made it up!). Initially we thought we would not do much through them (the discounts are based on a weekly shipment volumes) but it has worked more than we expected and even do all our UK shipments now through them. Overall our shipping costs (on small items) has dropped and we are starting to charge less to customers if they ask us to arrange shipments for them.

There were a few hiccups in the early days - but as we often ship to the same customers it has got easier - and they have also got faster. We normally use express saver (faster) rather than expediated (slow) as after the discounts it can actually work out cheaper! One of our regular (once every 2 months) packages to Shanghai in China recently have started to arrive at our customer within 24 hours!

[frauke]

Loui - Yes you have to enclose an invoice with the package. Also the HS Code. This code established what (if any duty) may be due.

Often people (misguided) ask to have lower amounts on the invoices. When an item is imported into the EU from the US, customs will decide how much the item is worth include carriage costs and what the HS Code is. If any of it is missing - they will put a value based on what they consider it should be (hence people are misguided if they think a low invoice will make a difference!)

The HS Code may mean, no duty is due, however VAT will be charged on the value of the items entering the EU based on the invoice. (Providing the C&E consider the invoice correct). A VAT registered company can reclaim this cost, a non VAT registered business/person cannot.

There are agreements to do with duty - for example if in the UK we sell goods to Switzerland a non EU country there is an agreement that if the invoice has special wording then no duty is due - if the wording is missing then duty becomes due. To find out this sort of thing - the local Chamber of Commerce is very useful for this - the only reason I know that an exporter joins!

[Loui]

Thank you so much, that is just what we were trying to find out. We had not been enclosing invoices but we had informed customers that it was necessary to disclose full amount paid on items shipped out of the country. So, now we will make sure to enclose the invoices and continue to state the full amount paid on the customs sheet. It seems similar to the sales taxes due in the USA, where we are more familiar with the system. These are just small sail boat parts we are auctioning off that we assume are being purchased by Europeans, Australians, etc. because they are not able to obtain the parts where they are or that they are less expensive, even with the VAT and shipping costs, purchasing them from the USA given the discrepancy in exchange rates. Thank you again, for the information, we did not want to offend anyone or get anyone in trouble and not having shipped much overseas, there is a learning curve for us. Thanks for your gracious kindness. Loui