Exporting & Importing issues for the Shopify age
Doing proper research for your product and exporting to see how much it will cost you or your customer is a good idea before you even let the purchase happen. Most countries, charge insane amount to import goods or have special levies when goods are from specific countries. If you don’t pay attention to these issues they can be very costly to you or your customer. Sometimes it isn’t worth exporting the product at all unless you can pull in some larger volumes to try and make up for the loss on duty rates to your profit margin; assuming you are absorbing the export costs. If you not you should also consider if exporting is even worth exporting to your customer world wide.
Keeping your HTS ( Harmonized Tariff codes) inside of your Shopify item list is a great way to quickly keep things under control. Next, let’s find out a few ways to figure out what those codes are.
Finding your Tariff Codes
Using a service like dutycalculator.com was the go to, but they have all but disappeared or at least the easy access has & the service is firmly placed behind a paywall. This is too bad because it was one of the best tools available to find your duty rates in many countries all at once. You can still use hts.usitc.gov or uscensus.prod.3ceonline.com. You can, of course, use a brokerage firm like UPS
In all honesty, this is part art, and science and is a book all in itself, which I may cover in a later article
Specific rulings or what is a binding ruling?
While importing goods for a company I worked for several years we had to import a new product. We had been importing these types of products for years, but we had developed a new product with a bunch of new features. So after talking to our customs brokerage several times, and going online and researching the sh!t out of it, we believed we had a product that was closer to a Fitbit than our product so based on this ruling rulings.cbp.gov/detail.asp?ru=n068636&ac=pr it was a 1.7% duty. Before we had to break out each component and its cost because each part such as the strap and the display had different rates. The ruling in the USA Fitbit ruling helped us reduce our duties paid and provide clarity for every time we exported or imported this product into the USA. Unless you pay a brokerage you will have to do a lot of digging to find these kinds of rulings. The government websites do not make it easy to find these. It was a pain in the ass, but with a couple weeks of research, and talking to our broker we saved a lot of money. Importing or exporting products is part art & science. You need to understand what markets and the regulations your product is ruled by.This can be hard if you have a product that bridges multiple product categories. Unfortunately, your product might not fit neatly into an existing product category and you will be left defining your own.
Keeping all this in your head is important and monitoring your codes inside your Shopify setup is important especially as you export your goods abroad.