Buying International Products Online – Part 2
In no way is this post directed at any one individual or a group of them. This is simply to do my best to educate, not only the consumer but the retailer so that we are all on the same page, because after all, we don’t want to charge you taxes, but it is not us doing so, it is your government.
We have moved into a pure digital age where the internet rules the world, especially in the retail industry. Every company is shifting their culture to focus on the online side of things, even the big department stores that once prided themselves and relied on in-store sales and customer service. Gone is that day and every company is now implementing webshops so that they don’t miss the chance to gain a sale 10,000 miles away. I touched on this subject a few months back (as you can read HERE) but feel that I need to explain a bit more on it as I am getting more and more customers confused by their custom’s invoices received after purchasing my products, and know that I am not the only retailer that is facing this same phenomenon as it seems to be a growing issue in the shoe industry (from what I have heard and seen on the forums).
With the ever growing internet, it now means that you could be sitting in the most secluded corner of Alaska and be purchasing some Spigola shoes from The Armoury in Hong Kong with one click of a button. Who would of thought of that 20-30 years ago?! The problem however is that quite often the consumer is unaware of the implications of importing a foreign product into their local economy. Some consumers that have very strict governments that want to protect their country, i.e. Singapore, Switzerland and Norway, and will be quite clued up to exactly how their country’s import taxation works. Others, like many of those in the US and Canada are not as aware as there are (were) not only a lot of loopholes but up until recently they weren’t very strict on the act of adding duties to international purchases. This seems to be quickly and drastically changing however and it would appear that the US (in particular) is cracking down as more consumers from inside the country purchase foreign made/sold products.
That being, allow me to explain how things work….again. Okay, so first and foremost a retail company never charges you “customs taxes or duties.” These are imposed by the local government authority for importation taxation (i.e. customs). But I do know that it can be confusing when the invoice is coming from the courier. So allow me to explain why that happens. You see, the major couriers like DHL, UPS, FedEx etc are actually in cahoots with the custom’s office and the reason that they are able to ship so incredibly fast on international purchases is because they will actually fast track your package by paying the duties for you, only to invoice you later for them or when they are delivering them to you. I can see how it may come from the company shipping you the products, but I can assure you that it is not.
Now there are all kinds of loopholes like undervaluing things or listing them as samples or gifts (when they are in fact not) but what you guys have to understand is that it is not legal to do this (it is fraud) and to ask a company to do that is asking them to risk themselves in order for you to dodge taxes. Some are happy to do this, but many companies that care about their company, won’t and shouldn’t. I hate taxes as much as the next man does, but I know that they cannot be avoided so I just expect them to come and then pay them when they do (as everyone else should).
The real concern and issue at the moment within the shoe industry is the usage of the governmental postal service to ship the shoes. This could be Royal Mail, USPS or whatever equivalent. I don’t know why but a lot of times, if shipped with these companies, custom’s duties do not seem to get imposed (don’t ask me why as I don’t know). So naturally customers want this route in the hopes to not get hit with taxes and thus make their foreign products a whole lot cheaper. Now let me explain why I don’t use them and why probably many others don’t either.
You see, the Royal Mail service is mainly for small packages. Once it goes over 2kg or is tracked at all, it becomes a part of the Parcel Force service (a courier that works with the governmental postal service). And the second that you have a tracking or over 2kg package (as most shoe ones are), the prices go astronomically high. With couriers you can set up accounts and get lower rates depending on how many items you ship. Also the governmental services will never be as fast as the big couriers and if a package is lost, forget about ever getting it back or having good customer service on the other end.
So, I will use UPS or DHL and be able to charge a very low rate to the consumer (with the chances of getting taxed) but could also use Royal Mail and bump up the costs to the consumer 2.5 times and have the chances of not getting taxed (but that is not a guarantee). The thing is that a foreign consumer, no matter where they are, should not expect to ever get a deal by buying a product from another country. And if you did, and do for the most part, simply consider yourself lucky as it is not the norm to avoid taxes. And I think that the US/CA governments are wising up to this and are more heavily and frequently now imposing the taxation so that they can better protect the local economies.
This is an issue that affects not only consumers and retailers so please pass this post on in the hopes to educate so that we can all be on the same page.
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