A recent Etsy forum question prompted me to do a little bit of research “The customer refused to pay the international customs fee?” I wondered how much that custom fee could have been to refuse to pay.
They were shipping from the United States to Ireland. I am not sure what the item was that they shipped but the items in this persons Etsy shop is around $40. This is the price point I used to do my research. Many of my items are $40 or less so I felt like as a seller I needed to understand the impact of selling items to other countries.
I used google analytics recently to track my top 10 countries. Recently, I updated my shipping prices to these countries. This forum post kind of freaked me out a bit because it might have been for not. If you knew that you’d have to pay a custom duty fee and tax that would cost you double, would you pay it? I don’t think I could pay double. I think I would try to find the item elsewhere first.
As a seller, we’ve been instructed to include a statement in our policies that tell buyers that they are responsible for any fees that their country imposes on them. So what does this mean exactly?
In the United States, I can make a purchase online from anywhere worldwide and I don’t pay custom fees or taxes. If I am on a trip and physically return with items then I have to pay duty fees & taxes. If I am buying from a small business owner online in the same state (Connecticut to Connecticut) then I pay sales tax. This sales tax number varies from state to state. If I buy from a small business owner out of state then I don’t pay sales tax. If I buy online from a large company then I pay my own state taxes.
Pardon for all of the explanation on this but I am hoping that international buyers might be reading this as well. So it is helpful to them to understand how it goes on here in the US. We all pay fees or duties on items we purchase. We just call it different things.
If the United States charged me a 100% tax on something. I probably wouldn’t buy it. I’d learn to do without. I thought it was interesting that in some countries if you buy a bike from China, that they charge an 85% disposal fee when you purchase it because of the toxic paint.
I am a dork and totally find all this fascinating. It is kind of like in the United States you aren’t able to bring certain produce across the lines because they are afraid of bugs that can kill Orange crops. This all makes sense. It is to protect our Agriculture. Some things I don’t understand. I digress.
I make handbags that are non-leather and made from natural fibers like cotton. My items are held to a different standard than someone who makes leather bags. Also, it matters where the materials are sourced from which is also very interesting.
You can see it is just as cumbersome for us here in the US as it is for you. Here is a map of sales taxes on purchased goods in the US. There is also a higher special luxury tax and special tax on other goods.
Here are the top 10 Countries that come to my Etsy shop. I gathered this information on Google analytics. For the purpose of my calculation I assumed the purchase price was $40 and it was not insured.
source: Duty Calculator
I hope that my customers find this chart helpful in deciding on what items they would like to purchase from me. For most countries given the price of my items, it is really not much more than paying sales tax just like we do here in the United States. There was only one country that I researched and was completely shocked about, and that was that Israel, they have an Import Fee of $36 for goods from the US. I just don’t even know what to say. I guess they don’t want to do business with small businesses in America. This is totally cost prohibitive.
I just wanted to get an idea of what I was up against. I hope this helps you all out who like to sell internationally as much as I do.
**These are my personal opinions. They are not fact though I’ve tried to provide reliable sources. This information is for illustrative purposes only. I am not in any position to provide tax advice or international sales law advice. This is just one example that I used. Other items may have different fees and expenses internationally. You should do your own research to decide if it is right for you as a buyer or a seller.
****Just found another interesting piece of information. As a seller it is illegal for the seller to pay the taxes imposed on the buyer by their country.