Selling Internationally - Import Taxes

[Joseph Fireborn]

Hello. I have a question regarding import taxes and how they work.

I have sold several pots to international customers and they have all been forced to pay import duties and taxes. Is there some way I can mail packages that avoid this type of charge? Or is this a normal thing? I really hate that they have had to pay these taxes and it makes the price of my work to international people more than I want to sell it for. They end up paying another 25-30 dollars to pick up their package.

Does anyone have any solutions to this problem? It seems like there has to be a better way? I am not trying to cheat their countries, but if this is the case then I am just going to have to completely stop selling to international people. The tax seems outlandish! I can understand a few dollars or even 10%, but nearly 100% of the price of my work.

It is something I need to figure out because it opens about a few billion more people to sell to.

 

[Mark C.]

I know of NO way to avoid this other than what I do and thats sell to international folks who take their goods with them and cross the boarder them selfs with the goods.You can for example take back into Canada a certain amount and not pay duty taxes on that. I have written hundreds of receipts for Canadians over the past 3 decades taking my work north themselves (Cali and Min can answer the amount you can import duty free)

If you mail the thing you can say it has zero value and its a gift-sometimes depending on the country that can help . Sometimes not.

I sent a  free gift to Canadian friend once and he paid more in taxes than the value of the gift If I had sold it to him.

I know folks who buy my work then fly it to Germany or South Africa tell me its free for Tham under certain values. If I shipped it its under the microscope and taxed to the moon .

On another note now with the current trade wars going on this whole thing most likely will get worse than it is now.

I have recently turned down shipping pots to Japan and Canada to some customers due  to this very reason.I like happy customers not overtaxed ones.

You know what they say one for you nineteen for me.

No relief for you I'm afraid said the taxman.You know you may want to google up that tune (Taxman) by that small 4 man oldies group called the Beatles to get some relief

hers a link

 

[Joseph Fireborn]

Yea it is a really sad moment, I had no idea, nor did my customers apparently. I guess I am done shipping internationally. It is a real shame. Blahhhh. 

[liambesaw]

If your works are valued at a rate that requires duty to be paid, I think it's fair that duty is paid.  Here in the USA, along with most countries, have a threshold under which no duty is due. 

If you were to declare the value of your goods at the price of the material used to create them, it would likely pass duty free.  This is an ethical gray area though and something you'd need to weigh against your conscience.  I always declared the retail value of the item if I was selling retail, and the wholesale value if it was wholesale.  

While it seems like a pain, and not worth doing, duties and taxes are there for a reason.

[Joseph Fireborn]

I declared it as the worth that I sold it for on the package slip. It seems a bit insane. My last customer paid 25 euro. The one before that 20 euro. 

[Callie Beller Diesel]

The one good thing that came out of the NAFTA debacle is that Canadians can now take $150 worth of goods across the border with them duty free. (It used to be something stupid like $50.) 

 

According to my husband, who works in shipping logistics and used to ship pump jacks, electronic equipment and various chemical samples pertaining to the oilfield for a living:

Any time you put a declared value on a package, the end customer will be taxed on it by their government at whatever rate is dictated by the trade agreements between the originating and destination countries. That’s not something you have any say over, or for the most part have any responsibility to collect. (VAT to Europe may be different, so don’t quote me on shipping across the pond.) If you declare the value of the item to be $0, as in the case of a gift, the recipient  shouldn’t be taxed on it. But, full disclaimer, if you do that and they have in fact paid for it, it’s fraud, and the US government in particular is taking a very dim view of such things right now. Also, if you put a $0 value on it, you can’t insure it. 

[Joseph Fireborn]

Yea I am not going to commit any crimes. I don't want to skirt the borders of what is legal, I just don't understand the rate at which items are being taxed. It makes no sense that it is nearly 50% of the value marked on the box. How can any government be okay with that rate? I don't want to get into a political discussion here. I have taken down my items to avoid selling anything else overseas. Bleh.

[liambesaw]

Sometimes it's to encourage people to buy their pottery (or whatever heavily taxed item) locally.

[Joseph Fireborn]

6 minutes ago, liambesaw said:

Sometimes it's to encourage people to buy their pottery (or whatever heavily taxed item) locally.

Protectionism is useful for some situations, but for pottery? It seems a bit redundant, although I guess if it's a large portion of their economy.  Anyways. I appreciate all the comments. I was just curious if I was doing something badly wrong in my shipping labels.

[liambesaw]

What did you declare it as?

[Joseph Fireborn]

White Mug 

[LeeU]

 Commerce is political, shaped by whether fair, or not, and the degree to which transactions are intertwined with gov't(s), private parties, cultural influences, and-in many societies-religion. The process of distribution, viewing, selling, preserving, or destroying art is often political, regardless of the content or nature of the piece. We on this Forum tend to avoid addressing politics in reference to our work, in order to keep discussions civil and focussed on the pleasure, processes, practices, and problems of clay and glazes.  But, there is a political aspect to the selling of art, when gov'ts impose excessive (not reasonable/fair) export duties, taxes, fees, export penalties etc. , which, in this case, have literally impeded someone's ability to conduct business in a fair manner relative to the value of his work. Yeah---BLEH---and double bleh!     

[Callie Beller Diesel]

Often, it doesn't matter what it is: if it's a purchased item of any kind, it'll get taxed by the destination country. The thresholds and rules vary by country. Shipping ceramics is usually pretty easy, compared to shipping things like wood or animal products. If the item is marked as a mug, that's the best thing you can do to keep things simple for border agents of any kind.

Etsy might be a good resource to look at for some articles about shipping from the US to Europe. They're usually pretty good about keeping their sellers appraised of things they need to know to keep things legal.

[Min]

When I have something shipped from the US to Canada I NEVER use a courier company. If it can't go by USPS then I don't order it. On top of any applicable duties and taxes the courier companies ding you a brokerage fee far higher than what Canada Post collects. 

[Mark C.]

I sell at art shows and my work goes all over the planet  over the past 45 years but its taken but the owner over the ocean or border and taxes are most likely never paid. I write receipts  for anyone who asked and only a few have asked for lesser than the real amounts. I did cut some slack on a large dinnerware set  reciept a few years ago heading over A border (gee I do not recall which one).

I have bought enough stuff and sent enough stuff I do as Min says-USPS is the best way.

Goods from Australia and Germany where pricey.

It could be worse we could be shipping steel and dumping it somewhere?I think thats a 25% tariff plus shipping costs

Like I said no shipping pots for me to Japan as that customer took my work from a show and wanted more-oh well.

I did recently ship 5 mugs to New Zealand and that cost over 100$ plus the taxes-It was doctor or did not care about costs.He has been a repeat customer from US art shows.

 

[Roberta12]

10 hours ago, Joseph Fireborn said:

I declared it as the worth that I sold it for on the package slip. It seems a bit insane. My last customer paid 25 euro. The one before that 20 euro. 

Joseph, just to be clear in my own head, the mug was one price, the shipping was one price, then the customer paid an additional 25 Euro for duty fees?

[Joseph Fireborn]

Yes. That is exactly right. Which they did not expect to pay or I assume they didn't by their response when I followed up on delivery of the item tracking  USPS. None of them were upset with me by any means, but it still seems bleh for the customer. They already paying a lot for international shipping for a single cup.

[GEP]

Joseph, I went through the exact same experience a few years ago. This first time I shipped something to Canada, I was shocked at how much the customer needed to pay to receive the item. Lucky for me, the customer was expecting it. But it left a bad taste in my mouth, I felt like I didn't provide a good value. That's when I stopped shipping outside the US. Of course, things progressed to where I don't ship at all, except for on a very limited basis around the holidays, because the cost of shipping and shipping materials is amounting to a "bad value" too. 

Lucky for us in the US, we have the largest potential customer base here in our own borders. Taxes suck but that's life. 

[Rae Reich]

I think it should be left to the discretion of the buyer whether they want to pay the tariff. Customers from other countries are usually well aware, or should be,  of what they're asking when they want you to ship. Of course, remind them at the time of sale.

I'm not sure I understand the conscientious objections. You are denying yourselves sales rather than giving them the choice? 

Why not notify your representatives when your opportunities for trade are being infringed by prohibitive policies?

[Gabby]

I mailed a bowl to South Africa. By coincidence a woman in the shipping depot from which I sent it told me that mailing in October it would never get to the recipient (because there would surely be a strike and the mail would be destroyed...). I thought it was just a rant.

Indeed it never got to the recipient. Six or eight months later it was returned to me with the notation that it was never picked up.

I do not understand international mailing practices.

[GEP]

3 hours ago, Rae Reich said:

I'm not sure I understand the conscientious objections. You are denying yourselves sales rather than giving them the choice?

By the time this happened to me, I had already figured out that packing/shipping is a terribly inefficient way to sell pottery. Compared to handing the pot to a customer who is agreeing to transport the pot home themselves. I was looking for reasons to limit my online availability. It wasn’t just the extra cost to the customer, it also involves a trip to the post office and extra paperwork for me. My other online sales are picked up at my house by UPS. It was a no brainer to decide “US shipments only.” 

[Mark C.]

(My other online sales are picked up at my house by UPS. It was a no brainer to decide “US shipments only.” )

same with me -I have to go to a post office and that takes me away from all my nap time. so its ideal breaker-UPs drives by every day-I just put out my UPS flag and they pick up when I need them. its easy.

I have found shipping out a pot here and there is really not a money maker as well.I let my outlets deal with this if they want to. Most do not.

 

[Callie Beller Diesel]

Juuuust to play devil's advocate:

I'll argue that a trip to Shipper's Supply to get packing materials, a day spent wrapping orders after a successful online sale and a messageto the postal service for pickup is less physical effort than hauling pots and a display unit to a venue of some kind and sitting in a 10X10 space for 3 days. Packing orders in one's jammies is considered socially acceptable, while fuzzy slippers and a questionable t-shirt might be frowned upon while attempting to sell in public.

Both business models are valid, I think it's just a matter of chosing the work that suits you as a person, and people should play to their strengths. If you're going online, you need to be more adept at a different style of marketing. I  too, prefer to deal with people in person, but there are customers that want things in between sales, and I don't have a lot of retail outlets at the moment. I've been experimenting with leaving a handful of popular items listed in my Etsy shop, and pointing people there if they have inquiries. It's lead to a few sales I might not have gotten otherwise with minimal effort. I keep a half a dozen 8"x8" boxes and enough packing peanuts for 3-4 shipments on hand all the time, and have some packing items stored conveniently next to my stock area.

What I find interesting is that most international customers that shop online regularly are familiar with and accepting of paying import tax. They consider it part of the deal. They know they're getting from you what they're not able to get anywhere else: your particular creative stamp on whatever it is that you make.

Most of the rest of the world is also used to a higher rate of shipping than US customers. USPS offers extremely reasonable rates compared to a lot of other national post services. I've actually taken to burying some of my shipping costs in the online posted price of an item so as to not scare off some customers.

[Mark C.]

I think it a matter of expectations and much more on WHERE you live. If its in the boonies and you do not want to travel than its fine to ship-if you whole business model is on Easy than you are married to shipping. Thats fine.Its not my thing but I can see it especially if you have high value items.

Doing a three income stream I have found the most profit is from art fairs  vs shipping or wholesale. That said I do all three.(see my February  CM article  on that.

If I can make an average of 7-8k at a regular show (not counting my best ones ) than thats more profit than shipping any one or two mugs to uncle George in Texas.

For me shipping is serving my existing customers not new ones.It feeds back to more show sales.

I would rather drive two days set up for 3 day show drive home and have 7k for that than ship a hundred of boxes out. But thats me not everyone has put in the decades to get this kind of customer base.I realize this and know that hard path is not going to work for everyone .especially those with kids.

I know someone who is very content shipping out 25 $ mugs to gross under 35K a year. That guy is not me but I do understand it. I'm just more driven.

these days I'm overwhelmed with mug requests and I think its a upward trend RIGHT now. I'm just not a fan and try to steer them to a venue I'll be at later in the year first.Just today a customer from Wa state called saying how she loved the 4 mugs I sent her last month and wanted more. Oh boy another pack job with one arm.

I think the break point on shipping is 4 items-that makes more sense than 1 or 2.

[GEP]

The difference between these two formats is volume. I can unload 150 to 200 pots in a three day show. It’s not feasible to pack and ship this amount of pots in three days. No matter how good you are at online marketing, there is a fairly low ceiling of volume, defined by the packing and shipping. Doing shows is a lot of labor but the ceiling is much higher.