I have recently been introduced a to book “Landed Costs for Dummies” by Avalara. I have to admit it is an eye opener. Wanted to share with you some of this information.
The Internet has made buying and selling products across borders easier than ever before. We shop for everything from toner cartridges to lumber on the Internet to find the best prices, quality, and selection, regardless of where the seller is located. This borderless world of e-commerce has opened up amazing new sales possibilities for businesses of all sizes, all over the world.
But whenever goods leave one country and enter another, government agencies have to be dealt with and paperwork has to be filed. It’s a complicated maze to navigate, made even worse by the fact that there are two governments involved — in the ship-from and ship-to countries — each with its own rules. And these rules can be very different.
With all that government involvement, you can bet that there will be additional costs. Most governments assess taxes and fees upon incoming shipments. The exact amounts depend on a variety of factors, but these extra costs can be substantial — they can even exceed the value of the shipment itself!
Think about that for a minute …. in terms of a customer’s expectations. Your customer thinks he’s paying US$500 including shipping for his purchase, but after all the taxes and fees are assessed, his actual to-the-door price could be more like US$1,000. That final price that he pays is known as the landed cost.
To prevent your customer from getting an unexpected call from his country’s customs folks, letting him know how much money he owes, you should provide that information before checkout. Your customer may decide not to go forward with the purchase, but that’s better than an angry customer refusing delivery of a package you paid to ship.
Your complimentary ebook explains the challenges and benefits of cross-border selling, shows you how to calculate the international landed cost, and explains why it’s probably in your best interest to use a landed cost calculation app rather than trying to determine it manually for each order. Download your complimentary ebook HERE.
I hope you learn lots of this book.