Operations

Guide to Duties and Taxes when Expanding Your Business Internationally

Selling internationally to grow your business can feel daunting. As well as handling cross-border delivery, you also have the complicated task of applying the correct duties and taxes. Duties and Taxes are a common logistical concern for businesses with sellers saying it’s their biggest barrier to international growth*.

What are Duties and Taxes?

Sales Taxes are financial obligations paid to the government on sales, and duties are a tax payable to the government on goods and financial transactions. Both of these hike up the price of buying from a seller in another country, but are there to protect companies from foreign competitors and enable the government to control the flow of certain products in and out of the country.

Taxes vary from country to country with different thresholds for when taxes apply to imported items. It’s best to research the tax thresholds for each country you plan to ship to and be able to let your customers know.

How are Duties and Taxes Calculated?

Duties and Taxes are calculated by multiplying the taxable value of the shipment and the tax and duty percentage of the country you are shipping to. Duty percentages do vary depending on the category of goods and taxable value and can change from country to country depending on the valuation method.

Different ways to pay – DDU vs DDP

Duties are taxes are a legal obligation for your buyers. There are two ways they can be paid – DDU and DDP.

DDU shipments are paid on delivery, with customers being contacted by customs when their parcel arrives to settle any charges. This option means that you need to clearly communicate to your customers that the duty will apply to their shipment. Failure to effectively communicate this could lead to an unexpected surprise for customers on delivery, which can reflect badly on your brand.

DDP shipments mean that the sender is responsible for paying the duties. This usually means that they are included in the existing price or added at checkout. This option might make products appear more expensive upfront, but does mean that your customer won’t be contacted for any additional fees and the shipment will be delivered easily.

Communication is Key

Communicating to your customers about Duties and Taxes is important. To boost the customer experience and secure repeat purchases, you need to make sure customers know how and when they will be paying duties and taxes throughout the delivery journey. This should be included on product pages, at the checkout, in your shipping policy and your FAQs. If this is left unclear, you risk cart abandonment, low customer satisfaction, refused deliveries, and more time spent on inbound customer queries.

Making Duties and Taxes Easier

In the modern age, there is more technology available to help online sellers deliver a seamless experience for customers whilst also making their own processes easier. This is also true when it comes to the complicated issue of calculating Duties and Taxes. We have now added a Duties and Taxes calculator to our GFS Checkout software. This provides a simple plugin that presents an array of different delivery options, and calculates the full delivery cost, making cross-border delivery easier than ever! Plus, you can decide if you want to combine Duties and Taxes with the cost of the order or let the customer choose whether they pay now or on delivery.

Find out more by watching our video, or sign up for a demo!

*GFS and Tamebay international survey 100+ decision makers, eCommerce businesses with £1m-£50m turnover– September 2018.
2020-11-09T16:00:25+00:00May 20th, 2019|

Webinar with IMRG: Building a Checklist to cover all Brexit scenarios

Webinar with IMRG: Building a Checklist to cover all Brexit scenarios

‘A horrible ending or an unending horror’ – maybe it doesn’t have to be either…

All conceivable Brexit options remain on the table. Whatever the outcome of our intended departure though, there is a lack of clarity on the impact on trading with the EU – but what is certain is that borderless trade with the EU is likely to come to an end.

Join IMRG and GFS in a follow up to our recent Data Breakfast debate, as we consider what contingencies you can be putting in place to protect existing EU revenues by ensuring continuity of trade as well as open the gateway to international eCommerce growth – at the same time.

What will I learn?

This webinar focusses on the key areas you should be considering right now to end uncertainty and build your internal checklist for turning the major changes coming for UK businesses into an opportunity for international expansion:

  • Required systems changes for order fulfilment
  • Steps to protect the customer service promise and your brand
  • Continuity of delivery and returns performance
  • Setting the groundwork for future international expansion

IOSS, DTP, DDP, DAP… SOS?

Selling to the EU just got easier and cheaper…

Contact us – we’re here to help!

2023-05-17T14:55:46+00:00May 9th, 2019|

In the press: GFS empowers hampers.com’s delivery infrastructure during peak shopping season

Global Freight Solutions empowers hampers.com’s delivery infrastructure during peak shopping season

Following a two-year partnership with Global Freight Solutions (GFS), hampers.com – one of the UK’s longest established and biggest hamper companies – has reported a parcel volume increase of 20 percent year-on-year. As a result, the two businesses have signed a deal to extend their relationship by a further two years in a contract win worth over £1 million.

The hike in parcel volume figures came about as a direct result of GFS’ multi-carrier parcel services, enabling hampers.com to increase the delivery options available to customers worldwide, and the integration of GFS Selector, which has greatly streamlined order fulfilment. The timing of the contract will also strategically gear the online retailer up for forthcoming seasonal peak periods.

In December 2017, hampers.com recorded strong sales revenue figures for the peak holiday period, which saw GFS successfully ship over 50,000 parcels for the online retailer. This was one of the key motivations for extending their partnership. However, experts have estimated that the timing of peak consumer shopping periods is shifting. A recent Deloitte report stated that European shoppers are starting their Christmas shopping earlier and earlier, peaking in November last year. Meaning the pressure is mounting for online retailers to future-proof delivery functions against potential disruptive threats like poor weather conditions, as well as having the flexibility to manage and switch between carriers at the flick of a button, which GFS Selector allows for.

Freed up to deliver more

Ian Longworth, CEO, hampers.com: “My only regret after experiencing our first peak with GFS was that we had not done this 10 years earlier. Before GFS, we tried to manage logistics in-house –spending time on keeping track of parcel deliveries and collections across multiple carriers – which ended up being a real struggle. Now we work exclusively with GFS. This means one relationship, one collection service, one point of resolution if there’s a query, and one invoice to keep track of. As partners, we trust that GFS can take care of the delivery side of things, which frees us up to put all our efforts into sales and marketing for a bumper holiday season.”

In addition to GFS Selector, hampers.com is using GFS Manager to proactively track and manage parcel deliveries to ensure they get to where they need to. With the added support of GFS Logistics, they’re able to provide additional collection services during peak times to ensure timely despatch and subsequent delivery.

Stephen Deverson, sales director, GFS: “We’re very proud that hampers.com has entrusted GFS for outsourcing their delivery. This is just one of many examples of the trusted relationship we have built with our customers. Our expertise assures customers like hampers.com that when it comes to carrier management and delivery capabilities, particularly at critical peak time, GFS is there to support their business.”

This article was originally posted on retailtimes.co.uk on 4th October 2018 – find the article here.

2023-05-17T10:14:59+00:00October 8th, 2018|

How GFS can help you defeat delivery hurdles during peak

In the run up to peak trading, many online retailers have their sights set on sales volumes but this should not come at the cost of consumers’ needs. To win and retain a customer you need to think about the customer experience as a whole; from first click to delivery at the door to returns. This means that shipping should be as much of a priority as stock availability and website capability.

IMRG’s latest industry report calculates the overall cost of delivery delays: redeliveries, failed deliveries and loss of business from disappointed customers, is a staggering £436,548,044 a year. Resource heavy despatch operations or first time delivery issues are amplified when peak volume hits, so it’s time to overcome logistical hurdles and use delivery to your advantage.

Manage customer expectations

Delivery options do influence a customer’s decision to buy and lack of choice to meet customer expectations is regularly cited as the main reason for cart abandonment. Sales tend to reach over the £billion mark over Black Friday weekend, so to take advantage of opportunities like these it is paramount to tell your customers at the checkout when they can expect their delivery.

Present your delivery options in a way that recognises the needs of the customer and, most importantly, what you can fulfil. With the GFS Checkout plugin, you can give consumers the power to choose how and when they receive their order with delivery services tailored to their specific address.

Getting orders out the door quickly

Despatch should be quick and easy, and selling on lots of different channels should not hold you back. GFS has integrations with leading ecommerce platforms and can produce shipping labels for over 1000 different carrier services. Specialist shipping tool GFS Selector can automate despatch across multiple sales channels, eliminating manual tasks to save you time while improving shipping accuracy and efficiency.

Service mix and mitigate your risk

One size doesn’t fit all and there’s a diverse range of services to suit different consumer needs. Getting this right will delight your customer while boosting performance and cost effectiveness for you. GFS can create the best carrier and service mix for you with access to a full spectrum of delivery services, including international services, click + collect or lockers – with warehouse automation to get the perfect match every time.

According to IMRG, the last two months of the year account for 25% of all parcels volumes in the UK so spreading the risk with multiple carriers can give you a safety net in the event you need to quickly switch. Managing many carriers in-house can become overwhelming in busy periods when resources are tight. GFS is your one point of contact for all parcel enquiries no matter which carrier you sent the parcel with.

Control and visibility – overcome the hidden costs of delivery enquiries

Customer experience not only impacts the likelihood of a sale but the chances of repeat purchase. Feefo, the online customer review experts, states that 95% of customers will return if a complaint is dealt with quickly and efficiently. Handling the enquiry comes with a cost, IMRG have calculated that the average cost per enquiry is £6.10. Factoring this cost into your operation majorly affects your margin but what if you could avoid the complaint in the first place by managing customer expectations around delivery.

GFS’ team of parcel trackers, monitor your shipments to identify possible delays, taking preventative actions to reduce delivery issues and increase customer satisfaction. When this is combined with delivery notifications, the customers are kept in the loop and the chances of delivery failure are greatly reduced.

Peak is a rollercoaster; it can be exhilarating seeing the orders fly in but also stressful as operational capacity reaches the point of exhaustion. You need a partner you can give you the right support and knowledge to defeat your delivery hurdles. GFS, the delivery experts, will help you get the most from peak without breaking a sweat.

2020-11-09T16:16:21+00:00March 15th, 2018|
Go to Top