May 23, 2019 by Andrew Minalto - 91 Comments

WARNING: The DDP China Alibaba scam is REAL!

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Delivered Duty Paid

DDP: Delivered Duty Paid! It sounds like a dream come true for so many Amazon sellers importing products from China! Isn’t it great that you can pay a slightly higher price for the product and get it delivered to you with all taxes already paid for? Perfect! Or… is it?

I’m afraid that when it comes to offers like these, we always come back to the age-old truth that if it looks too good to be true, it probably is. And DDP is no exception.

If you’re importing goods from China using Alibaba.com to sell on Amazon, eBay or anywhere else, you should read this article very carefully, because the chances are you’re currently breaching the law and could be facing severe problems due to tax evasion.

Sounds terrifying? I agree. So, let’s clear the air once and for all and learn about DDP Incoterms and how you CAN and CAN’T use it in your importing business.

DDP Explained

As I have already said, DDP stands for Delivered Duty Paid, and in simple terms, it means that the SELLER covers ALL the costs associated with the goods and the shipment of your order from their door to yours, which includes:

  • Cost of goods
  • Exporting duties/fees
  • Shipping
  • Import duties/fees/VAT/Customs clearance
  • Delivery to the specified address

Sounds great, right? Yes, it does! It’s a great, hassle-free way to import goods from abroad and not have to worry about any of the problems usually associated with importing from China.

Another huge advantage is that you eliminate all the guesswork from the landed cost of the items you buy. The price you pay the supplier is the final price and will be the cost of your landed goods.

This makes it super easy to make P/L calculations, especially for Amazon FBA sellers who have to take into account Amazon seller fees and FBA fees to get their numbers right.

So far, so good—and no signs of any scams! Yes, DDP terms are perfectly legit and used a lot in B2B transactions around the world. The problem is that many Chinese suppliers have a different understanding of what DDP stands for, so they use it illegally. Here’s how…

How DDP Becomes a Tax Evasion Scheme When Importing Goods From China!

Tax Evasion DDP

Here’s how it works: Your supplier will tell you that they can send you the goods via DDP terms for X amount of money, but in reality, they DON’T clear the goods through Customs for your shipment! What happens is your goods are smuggled into the EU without paying all the proper taxes (import duty and VAT).

And they achieve this in various ways:

1) If it’s a tiny package, they will try to pass it through Customs by putting a deficient value on the Customs declaration. If you get caught by Customs and asked to pay taxes, the supplier will come up with some stupid excuse about why it happened, but you will still have to cover those taxes.

2) They will send your goods via ship or train as part of a more significant shipment, allowing them to clear the goods through Customs while paying minimal taxes due to the incorrect classification.

3) They somehow manage to smuggle your goods into the EU without declaring anything. I have heard that the new train shipping method is used extensively for this. I don’t know the exact mechanics behind how they do it, but again, it doesn’t matter. If the appropriate taxes are not paid, you’re essentially taking part in a tax evasion crime and it will come back to bite you.

EU Border Customs

I hope that this information opens your eyes to the potential legal trouble that comes with accepting DDP terms when importing from China.

In my opinion, it is not the smartest move to make. In most cases, you will still receive your goods, but you won’t have any documents or proof to show that the correct taxes have been paid on them. This means you can’t even correctly document these orders/stock on your books! And if HMRC does check your books, you will certainly be in trouble.

There’s a small chance that some Chinese suppliers use legit DDP shipping terms. Perhaps they have a contract in place with the courier/shipping company to make this happen. It is possible, yes, but in those cases, they won’t have any problem showing you the proof/documents that the correct taxes have been paid for the goods you are importing (and you will need these for accounting anyways).

However, it will be rare that you will find genuine DDP terms on Alibaba.com. A super simple way to tell that supplier is NOT offering genuine DDP terms is to look at the price. For example:

If the cost of goods with the “normal” shipping is £3000, but they offer you DDP terms for an additional £200 (total £3200), it’s 100% a clear sign that it is a scam!

The VAT alone on a £3000 order will be £600 (at 20%), PLUS there’s import duty, Customs clearance fees, etc. The additional cost should be a minimum of 25% of the total (£750 in this example).

It’s just common sense; you can’t waive the VAT on imported goods because you use DDP terms, that’s not how it works.

Sometimes suppliers are smart and will add a premium of say 25% or 30% if you choose DDP terms—but they still won’t pay the taxes with it! They still try to smuggle the goods in and keep the difference for themselves.

So, what can you do? What is the solution to this problem? In which cases can we still use DPP terms to make importing life easier? Let’s find out…

Conclusion

Freight Forwarder

My advice is to completely stay away from using DDP terms when dealing with suppliers on Alibaba.com.

It’s not worth the risk when you know that 99%+ of suppliers will scam you this way. I’m sure that Chinese suppliers don’t even see this as a scam—they think that they’re helping us! Just like they do when they continuously undervalue smaller shipments so that they get them through Customs without fees.

The ONLY time that DDP terms should be used is with US-based suppliers and legit companies who have contracts in place with the courier companies. These people will be happy to provide you with all the appropriate paperwork for all the taxes paid on your goods.

For example, Amazon offers DDP terms when you buy from Europe on the Amazon.com website. eBay also provides a very similar feature via their Global Shipping program (which also has plenty of weaknesses when used across the EU).

If you plan on importing goods from China, Alibaba.com, or any other website, stick with simple shipping terms where you are in control of how your products are processed through Customs:

1) With small shipments, it will usually be a courier company.
2) With larger purchases, you will want to use sea freight or air freight handled by a freight-forwarding company (such as Woodland Group).

As long as you ask the supplier to write down the correct VALUE on the Customs declaration and get a proper invoice from them showing all the goods, the amount paid, etc., you will have no problems clearing your goods through Customs, paying the taxes and getting the relevant documents that prove those payments were made.

Have you been using DDP terms and been scammed? I would like to hear your story! Leave your comment or question below the post, and I will personally get back to you within 24h, Monday to Friday.


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91 Comments
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  1. Hi Andrew,

    Thanks for your reply. The package is supposed to be delivered to my home address in the UK. The seller said they would put the package on a train from China to Poland. From there, it would clear customs and then be ready for collection by UPS.

    I called UPS UK again today and they have said they need the seller to instruct them to forward the package to the UK. and that I would have to contact the seller. I have also contacted UPS in Poland. They said they are willing to send the package, but need the sellers Polish contact number. I told UPS Poland, the seller is in China and that I only have a Chinese contact number for the seller. UPS Poland seemed surprised by this, as they state it has no paperwork from China. UPS Poland would not accept this, so my package will sit there until the seller provides a Polish contact number.

    The seller has not asked for any additional money. It seems as though it has been smuggled in to Europe via train! I have sent an email to the seller/manufacturer asking them to explain themselves. Any thoughts on what I should do next? Regards, Shaun.

    1. Andrew Minalto

      Hi Shaun,

      Yes, probably they tried to smuggle the goods into the EU – just like I explained in the post, but something went wrong and now the shipment is stuck at Customs.

      I don’t really know what to suggest here apart from trying to resolve this issue directly with the seller.

      Andrew

  2. Hi Andrew, I have ordered an electric bike from Alibaba. Its apparently been shipped to Poland via train and is allegedly sitting at Customs. From there it is being delivered via courier (UPS) I have tried to get the tracking number from the seller, but they have stated they do not have one yet and that UPS will provide one when Customs have processed the bike. I called UPS today and they told me I should have been issued the tracking number from the time the bike was shipped. I paid the full balance of the bike on the 17/08/2020. DDP was £600. I’m slightly worried i’ve been lied to by the seller. Your thoughts?

    1. Andrew Minalto

      Hi Shaun,

      Thanks for your comment.

      Why is the item not being delivered to you? Is the supplier asking you to make any extra payments to them?

      Andrew

  3. Hi Andrew,

    What would you recommend to do to ensure customs and taxes are paid properly? I’m in the process of placing my first order. I’m still doing product research but I’m thinking about ordering 25-50 units, items under 10oz each and value possibly around £300-500. I assume air express would be the best option. Would I use a 3rd party company to take care of customs?

    1. Andrew Minalto

      Hi Reka,

      If you’re using air express (courier), you don’t have to worry about this as couriers will do the Customs clearance for you, by default.

      Just make sure to inform your supplier to put REAL/ACTUAL value on the Customs declaration as they really love undervaluing goods.

      Thanks,
      Andrew

  4. Hi
    I am currently dealing with a purchase from Alibaba, my first (maybe a little naive) basically my product cost 650USD delivered (£545) the package has been shipped but I am now being told it’s being held by Italian customs due to the “package being poorly packed” although the tracking reference is showing it as “tax/VAT” they are in sting i make a one off payment (refundable) of 1800USD to the courier, if it isn’t paid there will be extra payments for paying late. I am standing firm and refusing to pay but getting nowhere….is this DPD? And can you offer me any advice?
    TIA Paul

    1. Andrew Minalto

      Hi Paul,

      What did you order?

      Sounds like a total scam to me.

      Andrew

      1. Hi Andrew

        This is my conclusion unfortunately, my bad…. i ordered fishing equipment ( unbranded) I will cut my losses and learn from this experience.
        Thanks

  5. Roelf Karelse

    Hi Andrew, thank you for a great article. I am in South Africa about to do my first Alibaba order, have been quoted DDP. Value of shipment is $165 and have been quoted $129 for shipping unfortunately I am not sure about the dimensions and volume of the parcel.
    Does sound safe?

    1. Andrew Minalto

      Hi Roelf,

      I’m sorry, but I don’t really know how shipping from China to South Africa works, what import procedures and taxes you need to pay etc.

      This information is all about importing from China into the EU.

      Andrew

  6. Hello Andrew,

    I hope you can advise, I found this link via google.
    I am looking to purchase from Alibaba 250pcs comes to £520
    I have been advised
    Express shipping £270 or £141 for sea freight door to door?

    My items are workout bands, very light in my opinion.
    My main issue is i’d like to receive my items right to my door and keeping the price very low and avoid the high charges. (Located just outside London)
    Any advice would be helpful. Thankyou

    1. Andrew Minalto

      Hi Becki,

      Thanks for your comment.

      Go with the express shipping. That sea freight quote won’t be all-inclusive, I can guarantee you that. There will be extra fees/costs when goods arrive at the local port and in general – for such small shipments, sea freight is NOT the most suitable shipping method.

      So yeah, just go with the Express shipping – the courier company will handle the Customs clearance procedure for you and deliver goods straight to your door. PLUS this will be so much faster way of getting your goods compared to the sea freight! 🙂

      Hope this helps!
      Andrew

  7. Hello Andrew,

    Many thanks for this article. I am just starting off in this type of business, and I want to import some goods from China to the UK. The supplier has offered DDP shipping (like you could have guessed), and after reading your article, I am a bit nervous about the whole thing and would appreciate some advice.

    The total cost of the product is: $2,771.00
    DDP quote from supplier: $639.00
    Item weight: 200kg
    Shipping method: Train to UK.
    I also have the Commodity code or HS code which I can provide to you if that information helps.

    Just something to note, I have previously requested that they send me details of other shipping methods, and they remained adamant on sending via freight train.

    Thanks in advance.
    Ayo

    1. Andrew Minalto

      Hi Ayo,

      Thanks for your comment.

      As explained in the article, it’s most likely a scheme of getting your order into the EU without paying all the taxes.

      You can ask your supplier – will they be able to provide you invocies/documentation for VAT/import duty paid on the full value of your order?

      Most likely the answer will be no.

      Andrew

      1. Hello Andrew,

        Thanks for your response.

        Their reply was indeed no. And their explanation was that “Local agent will do custom clearance for a whole train not your company orders, so they can not offer details tax of yours”.

        Please what do you advise I do?

        Many thanks

        1. Andrew Minalto

          If you don’t want to break the law by not paying proper import taxes, do not agree on such order/shipping terms.

          Andrew

  8. Thanks for this article, has helped me Realise I should be going DDU and not DDP.

    However I have called up HRMC and actually if u can prove you’ve paid to the courier ‘DDP’ it’s actually their fault and you won’t be liable. It’s more of the risk of getting your stuff impounded and having to pay customs and having a delay in the shipment is the hassle?

    1. Andrew Minalto

      Hi Matt,

      Very hard to believe that HMRC said that – maybe they misunderstood the problem?

      Because IMPORTER is always responsible for Customs and paying taxes, always.

      Andrew

  9. Hi Andrew, I have some big concerns regarding my freight forwarder in China. I am getting two cartons air shipped to Amazon UK. The forwarder received the cartons from the manufacturer 5 days ago, I paid for the shipping and I was told I would receive my tracking numbers once the payment cleared (within a few hours).

    I only got one tracking number from the forwarder. I said there should be two (one for each carton). They tried to tell me that this was the “master number” and that the other number would show on the GLS website if I checked the tracking information. I did that, only to find that the only numbers are the “master” number, which is the GLS tracking number, and a Parcel Force number, which I assume is for when the shipment reaches the UK.
    In a nutshell, it looks to me like there is only one tracking no for GLS, and one for Parcel Force. Am I right in thinking that there should be two numbers for each? One for each carton so I can track them both? Also, Amazon is asking for two tracking numbers on the shipping plan.

    Lastly (sorry for the long post). Even though I paid for the shipping a number of days ago, the tracking information for GLS is still showing as “The parcel data was entered into the GLS IT system; the parcel was not yet handed over to GLS.”. When I asked the forwarder why the goods are still have not been handed over to GLS, I was told that it was handed over and GLS will update this information once the goods clear customs. Does this sound right?

    Some things just don’t add up, have you any idea what might be going on or am I just being paranoid?

    1. Andrew Minalto

      Hi Chris,

      Thanks for your comment.

      Who is your freight forwarder? if it’s a legit company, they should be able to explain all of this to you..

      But in general, yes, it is ok to have just one tracking number, even if there are multiple parcels. And yes, with some services, the tracking information only becomes “available” and active online when the goods enter the UK. So I can’t see any red flags from the information you have given. Again, I hope you’re using a reputable freight forwarding company, then you should be in safe hands.

      Thanks,
      Andrew

      1. Hi, thanks for your reply.

        Yes they are a reputable company who seem to come recommended by quite a few Amazon sellers.
        I tried asking the questions to get an understanding of the process but the answers from them where somewhat vague, maybe with the language barrier. The bit that was frustrating me was that I was expecting two different tracking numbers and they never properly explained why there was only one. I was worried that one of my cartons would not be accounted for.

        I also expected to have detailed tracking information for the whole journey and thought the packages were still lying in the forwarders warehouse days after the shipping was paid for.

        I’ll just put it down to a lack of experience on my part and just relax and leave it in the forwarders hands.

        1. Andrew Minalto

          Yeah, I mean – I couldn’t see any reason/information why you should worry. That automatically doesn’t mean that everything will go smoothly, but there’s no point in worrying about a problem before it even happens, right?! 🙂

          Take care,
          Andrew

  10. Irfan Yaqoob

    Hi Andrew,
    Thank you for this article which is very helpful.
    I’m new in this type of business and want to import some goods from China Via Alibaba. And the seller has sent me the invoice of the items which I want to buy.
    Items cost $3500 and DDP (door to door service) cost $1230 by China train for the UK. Total pcs are 800 with a weight of 480 kg.
    Please give me some advice, and let me know is it genuine/rare price from seller thank you in advance.

    1. Andrew Minalto

      Hi Irfan,

      Thanks for your comment.

      I highly doubt it is a genuine DDP quote… Even though technically/mathematically it could be the truth, knowing how Chinese sellers operate, I say they won’t pay taxes, at least not on full value.

      You should ask your supplier whatever they will be able to provide you with all the paperwork that process payment of VAT and import duty? Chances are that they will say no…

      Andrew

  11. Hey Andrew

    I have a good relationship with a supplier from Alibaba, always ship DDP (DHL Express) to USA Amazon fulfilment centers….

    However latest shipment has been stuck in NY custom clearance, the suppliers are asking if i have a customers broker and are now saying the NY customs need a US residential tax ID

    Any thoughts on this? is this simply the first time customs have checked and my supplier has been caught off guard? as a UK resident how to i get one? I assumed DHL handled this (never had an issue in 3 years)

    1. Andrew Minalto

      Hi Paul,

      Thanks for your comment.

      Yes, I think that’s exactly what happened there. If they did DDP for you, then they should take care of the Customs procedure.

      Sorry, I can’t really help with the US Customs procedure as I don’t have much experience with it. When I was sending the stock to Amazon in the US, I was also using DHL and real/legit DDP terms and they took care of everything for me. All I had to do was give them a POA, that’s it.

      Thanks,
      Andrew

  12. Hi Andrew,

    I am about to pay for my first product and it was going to be shipped DDP by air from China.

    The shipping price is about 25% of the EXW price and the supplier claims they work with many Amazon FBA sellers.

    1. Could I just ask you, what should I be doing to make sure the supplier is trustworthy and will be paying all taxes and claiming the correct value of the shipment etc. Is there any documentation I should be asking for or informing the supplier that I will need once the deal is finalised?

    2. Also, I am not exactly sure what kind of documentation I will require from my Chinese supplier for my records and HMRC tax purposes. I had already received samples and the only thing I received from them was a Commercial Invoice. Is there any other documentation required for bigger shipments? If so, what is the difference between DDP and EXW in terms of documents required by HMRC?

    Thank you in advance for your answer.

    1. Andrew Minalto

      Hi Pio,

      Thanks for your comment.

      You won’t get any proof/documents because your supplier WON’T pay those taxes.

      25% of the product cost would barely cover the VAT and import duty, not talking about the actual shipping costs via AIR.

      So, you can ask your supplier for proof of paying taxes but they won’t be able to provide any.

      And you won’t be able to properly book this order/shipment in your company books either. That’s why I created this post to warn people about this DDP scam.

      Andrew

  13. Hi, thanks for the article. I have just got a DDP quote from China – UK standard sea shipping.

    600 units weighing 28kg in total (split into 3 boxes).

    Total manufacturing cost for the 600 units $540 (the FF did not ask me for this cost which I thought was strange).

    My quote from FF was $239 DDP

    This was from a FF in China who do a lot of Amazon FBA shipping. Does this price sound legit? It’s my first ever order so I’m not sure. I asked for a breakdown of the quote, will this help in any way?

    1. Andrew Minalto

      Hi Chris,

      Why do you want to use sea freight for a 28kg shipment?

      Courier/express is more suitable for such a small order.

      Andrew

      1. Thanks for your reply Andrew.
        I was going down the sea shipping route to try to keep costs down. I had read that air freight has sky rocketed in recent months so I thought rail or sea might have been the better option.

        1. Andrew Minalto

          Not for a 28kg shipment.

          That’s way too small for sea freight, additional charges/costs will kill any potential savings in the freight cost.

          Andrew

  14. hi.
    thank you for a large dose of knowledge.
    What is the situation when I get a commercial invoice from china, but the shipment takes place from some country in europe? I am from Poland, so I will get the parcel without paying the duty. Do I then have to ask the seller for some confirmation that he has paid the duty when importing to Europe?

    best regards
    Bart
    Bart

    1. Andrew Minalto

      Hi Bart,

      Thanks for your comment.

      Please read this post carefully – if that happens, most likely the supplier has scammed you in a way that goods were not properly declared when entering the EU market. You should contact your local Customs office and inform them that you want to declare your shipment and pay the necessary taxes.

      Thanks,
      Andrew

  15. Andrew Newby

    Thanks for your advice. You just saved us a massive headache! We are looking to import 500 units of whisky cubes, and they quoted us $900 for shipping (DDP). We asked them to send via FedEx (or another known courier), and it went up to $1800 + import taxes. Any suggestions on a good courier to carry coolant gel? They said:

    “just let your forwarder know stainless steel ice cubes have cooling liquid inside, they are sensitive products”

    Otherwise we will just have to drop the purchase, as it puts the profit magins too tight 🙁

    Thanks!

    Andy

    1. Andrew Minalto

      Hi Andy,

      Items like these you will most likely want to ship via sea freight. Courier will be too expensive.

      So get a quote from a freight forwarder using this website:

      https://www.freightos.com/

      Thanks,
      Andrew

  16. Hi, thanks for this very informative article.
    I am shipping goods from China to UK. The total cost of goods is $1391.52 13 boxes each weights 19,5kg and its size is 60x60x48
    DDP $762. Do you think this is Legit?

    Thank you!
    Kasia

    1. Andrew Minalto

      Hi Kasia,

      Thanks for your comment.

      What shipping method? Sea freight, train or courier?

      Thanks,
      Andrew

  17. Hi Andrew,

    I have just made my first order on Alibaba and its ready on Monday. my agreement with the supplier was that I was handling shipping. I have a souring agent handing this for me with DDP shipping for 500 unit at 1000usd, my supplier is asking for customs clearance documents or the will not close the deal on Alibaba but my agent has informed me that they are trying to get a tax refund from the government and because of this he has informed me that this will not allow him to send the shipment directly from china to amazon warehouse.

    really confused and any help will be much appreciated
    best regards Dean

    1. Andrew Minalto

      Hi Dean,

      Thanks for your comment.

      How much did you pay your supplier for those 500 units?

      Just want to know whatever that sourcing agent is actually paying taxes for your order or not.

      Andrew

  18. Hi Andrew,

    Thank you for this site and for helping with personal questions.

    I’ve always used EXW with courier or DDP but more and more sellers are quoting DDU, even ones I have been working with. Is there a change going on?

    As for DDU, I have a US order coming in that’s under $800 which Im told is tax free but for bigger orders, DDU, do you know if customs agents calls us and we pay over the phone or do we have to drive to customs location?

    Thank you,
    Dee

    1. Andrew Minalto

      Hi Dee,

      DDU is actually very common if not default option when couriers are used. The supplier can say EXW price and then quote a courier shipping fee OR give you a DDU price, which basically means the same thing – items delivered without taxes paid.

      Yes, couriers will contact you IF/WHEN shipment needs to go through Customs.

      Thanks,
      Andrew

  19. Michael Knight

    Hi Andrew,

    I have just read your article and was about to make an order with a supplier in China before I read it but holding off for now.

    This is my first time ordering something from China as I am new to this. I am buying 250 pcs at $0.98 per piece and they have quoted me $180 for DDP shipping via Train.

    I am guessing this is a scam but would like to know your thoughts please.

    Kind Regards

    Mike

    1. Andrew Minalto

      Hi Mike,

      How big is the order in terms of size/weight?

      Thanks,
      Andrew

  20. Hi there I’ve ordered 120 of my product at 3USD each from Ali baba, the shipping + DDP to my door is around 85usd because the product is cheap does this sound it could be legitimate? I’ve just asked for documentation with their courier/ shipping company to see an agreement and won’t be making a bigger order if they cannot supply correct documentation, I’ve got them to include, all seller takes responsibility for DDP and customs and taxes on my invoice.

    1. Andrew Minalto

      Hi Lewis,

      Of course, it’s not legit. 120 units by $3 each, the total value of the shipment is $360 + shipping costs.

      VAT alone on that $360 is $72. So how can a $85 DDP fee ALL INCLUDED cost be legit? It can’t.

      Thanks,
      Andrew

  21. Hi Andrew!

    First of all thanks for the post, it’s very interesting.

    I am working on my first product and I’ve got some DDP shipping quotes from my provider which I think are suspiciously low, so I’ve got some questions around how DDP works. I have read somewhere else that there’s no need to provide your EORI number to the air courier and they are responsible for paying custom tax and VAT, so I am wondering:

    1) Do they provide any documentation to evidence that the customs tax and the VAT have been paid correctly?
    2) How are those goods tracked to me without the EORI number? (from HMRC perspective)
    3) If you got the goods to your door but they have not paid the right custom tax and VAT, how and where can that impact you in the future?

    I just want to make sure all the taxes and VAT are paid correctly to avoid future problems.

    Many thanks in advance! 🙂

    1. Andrew Minalto

      Hi Maddi,

      Thanks for your comment. Did you read the post? 🙂 As these questions are already answered here.

      1) No.

      2) They’re not tracked, because goods are not properly declared with Customs.

      3) It’s called tax evasion and can get you into serious trouble.

      Andrew

  22. Hi Andrew,
    Thanks for the brilliant information you provide. You seem to have a great handle on this complicated subject.
    I was hoping you could clarify a couple of points as I am trying to get my head around shipping and import taxes (for some reason I seem to be going around in circles in my head). Let me see if I’ve understood correctly…

    1. Am I correct in saying that for goods sent express/courier, eg. Fedex or Alibaba Parcels, there is no need for a freight forwarder as the courier clears the customs?
    2. Am I correct in saying that for goods sent express, either via Alibaba Parcels or Fedex, it best to ask for DAP terms? If that is the case, will you get an invoice from the carrier to settle the duties when they arrive? Will the goods still be delivered to the address specified, eg. your home, office or amazon and a customs receipt provided by the courier company?
    3. For an order that is DAP and shipped express, is it just a question of paying the supplier as per the contract and then paying the courier company when prompted?
    4. As a tangent to question 2, if you get a DDP quote should you assume it is DAP? Effectively, assume it pays for shipping but the customs hasn’t actually been paid correctly? In this case could you get a request for customs payment anyway? As you said above, if you don’t pay the customs when prompted I guess you won’t get your goods.
    6. And finally, for anything that is not sent via Express, should you use a freight forwarding company? Should we tell Woodland that you have recommended them?

    P.S Any plans for any more youtube videos?

    Thank you again!
    Alex

    1. Andrew Minalto

      Hi Alex,

      Thanks for your comment and questions. Will try to answer them one by one:

      1) Yes, that is correct.

      2) Yes. Yes, the courier will invoice you for VAT, import duties and clearance fee. Yes, to your address, but not to Amazon directly, as Amazon can’t act as the importer for your shipment.

      3) Yes, correct. Just make sure the supplier shows REAL/FULL value of goods on the invoice and customs form.

      4) You should avoid DDP quotes altogether. Just say you’re not interested in DDP.

      5) Yes & Thank you! 🙂

      Hope this helps Alex!
      Andrew

      1. Hi Andrew,
        Thank you for taking the time to respond. Frankly up to this point I had been requesting DDP quotes thinking it was the easiest way, but you have really helped me understand why this is not a good idea.
        Alex

        1. Andrew Minalto

          You’re welcome Alex! 😉

  23. Hi Andrew,

    I want to drop ship leather dress shoes from China to Canada. I want to prepay all duties and import taxes for the end consumer. How do I go about this? Is there a way to prepay import duties and ship the product without showing an invoice price of what I paid the manufacturer for the product? I don’t want the end consumer knowing what I paid for the product. What can I do to ensure this while prepaying all duties?

    Thanks,
    Griffin

    1. Andrew Minalto

      Hi Griffin,

      Thanks for your comment.

      The only way to get this done is to open an account with a courier company (DHL, UPS etc.) who can then offer you such service, at an additional cost of course.

      Chances are that they will ask for decent minimum order number per month before they will even consider doing this.

      Thanks,
      Andrew

  24. Chris Arnfield

    Hi Andrew,
    I am one of your older customers from the eBay days.
    I have been importing from a couple of suppliers in China. I have started getting massive invoices from the courier companies, TNT and FedEx. All the documentation seems above board and stated correctly, including the amounts. My daughter-in-Law is an accountant and she says that as my contract details from the supplier state that the goods are to be sent under DDP, I should not be getting bills from the courier for customers duty and VAT, as they should have been paid by the supplier.
    Is that correct?
    I have gone back to an older supplier who I know was always honest. They told me upfront that I could pay a bit extra and they would organise the freight etc. under DDP with UPS. True to their word, the consignment took slightly longer as they organised the import etc.
    What do I do now with all these invoices from TNT and FedEx which I guess should have been dealt with by the suppliers?

    Regards

    Chris

    1. Andrew Minalto

      Hi Chris,

      Thanks for your comment.

      Yes, in theory, that’s true, but as you did learn from my article, 99% of Chinese suppliers are scamming the system and selling the DDP as an easy up-sell, while smuggling goods into the EU without paying proper taxes.

      What can you do with those invoices?

      a) you can contact suppliers and ask them to cover them for you. Which will never happen.

      b) simply pay those invoices by yourself.

      Either way, you’re the one who will have to pay them as you’re the importer and you’re responsible for this, not your supplier.

      And of course, in the future, don’t fall for this scam again and don’t use DDP terms when importing from China.

      Thanks,
      Andrew

  25. Hi Andrew!

    This article has been very helpful for clearing some of the confusion surrounding DDP terms vs FF.
    We are arranging our first shipment from China. I’m curious about what you think:

    1. FF quote is 900usd by sea plus 4% duty plus 25% tariff (Trump list), that totals to about 2300usd for import.
    2. DDP term from supplier is 780usd including everything. That is about 16% of the value of goods.

    According to what you said it is a red flag, as its nowhere near the duty alone.
    Is that right? The supplier says that 99% of their clients use DDP term. The quote from the FF is so high with this new tariff, that I want the DDP to be legit..

    Thanks for your time!
    Kriszta

    1. Andrew Minalto

      Hi Kriszta,

      Thanks for your comment.

      Yes, 100% red flag. It simply can’t be legit. That is – if you want to stay within the line of law and pay all the taxes that you need to pay.

      Suppliers will tell you all kinds of stories, just to get the order from you. Don’t take their advice, especially when it comes to taxes!

      Thanks,
      Andrew

  26. Hi Andrew
    Thank you for great article.
    I am new to Amazon FBA business and I am thinking to order my product from alibaba. If I tell them I want to use UPS/FEDEX etc. Will these cause trouble and smuggle the product if I use Delivery Duty Paid method (DDP). Also using this method will I be required to provide to the UK customs any paper like VAT paper or anything as I am new to the business and have not sold anything before. I think I have seen somewhere that I will be required VAT form and confused about it. I did some research and nothing show the solve. thank you in advance.

    1. Andrew Minalto

      Hi Said,

      Thanks for your comment.

      Don’t use DDP terms, forget about them. If the order/package is small, yes, ask the supplier to get you a quote for express/courier shipping and add it to the final invoice. Also, make sure to ask them to put the REAL/FULL value of the goods on the Customs declaration and commercial invoice. To be 100% safe your goods get properly declared through customs, once you have the tracking number and see that shipment has arrived in the UK, you can contact the courier company and inform them that Customs clearance procedure will be necessary.

      No, you don’t need to be VAT registered to import from China, that’s a lie.

      Andrew

  27. Hi,

    Just came across this as I used DDP for my supplier and the total ddp fee (shipping, duty and vat) was less than what it should’ve been. So they under declared the value. I didn’t know any better at the time, so not sure what to do now that I know what happened.

    What should I do now? Do I contact HMRC and explain the situation, and will they know how much was paid and simply allow me to pay the remaining so it is correct?

    Please help, as I am quite worried.

    1. Andrew Minalto

      Hi Joe,

      Thanks for your comment.

      Yes, you need to contact HMRC, fill out a special form there to correct the issue and pay those taxes. There shouldn’t be any fines for doing this, as long as you show the initiative and contact them first.

      Thanks,
      Andrew

  28. Hi Andrew
    Great article !
    I am very new to importing. I wanted to order chiavari chairs for a wedding $17 each MOQ 50 which would equal to $850 they offered dpp shipping for $790 which sounds high considering is almost the same price as the chairs on top of that I would still pay customs and duty correct ?
    If I purchase the chairs in the USA each chair is around $49 with freight shipping cost. Would you recommend to just stick buying from an USA supplier ?

    Thanks !

    1. Andrew Minalto

      Hi Lucero,

      Thanks for your comment.

      50 pieces is not enough to import from China, forget about it.

      Find a good wholesaler in the US, who can give you a good discount on 50 chairs, hassle free.

      Thanks,
      Andrew

  29. Hey Andrew,

    I have just read your article, it is an amazing one.

    Now, I am about to start a collaboration with a chinese supplier from Alibaba to send my products in the US to be sold on Amazon.

    My Q for you is: for products worth 7000 $ they offer me shipping 455 $ DDP by sea… is this a scam ? … for me it seems one but just double check.

    Many thanks,
    Nick

    1. Andrew Minalto

      Hi Nick,

      Thanks for your comment.

      You can’t send goods directly from China to Amazon like that – Amazon can’t act as your importer.

      You need to use a freight forwarding company or Amazon FBA prep house so they can receive/import goods on your behalf and then send to Amazon.

      As for the quoted shipping cost itself – hard to say, it depends on the size of the shipment.

      Thanks,
      Andrew

  30. Hi Andrew, I am about to buy a small oven with the molds which do not exceed 46 kilos of weight together nor a meter apart in addition to its price is 379 dollars, I already asked the corresponding questions to the supplier in Alibaba, it has all the filters that you suggest to do business, however, at the time of asking for the proforma invoice to review all the details, before sending me the formal quotation he told me that he was sorry, that he changed the shipping price from $ 291 to $ 472. What would you do in this case? This factory has several profiles with differences basically in prices of the same product or years of experience in Alibaba … 6 – 2 years of experience, however it is the same brand and factory, why is this, can I trust? What do I do about the sudden change in shipping price, is it normal before proforma? I clearly want to use Trade assurence as a means of payment. If you can answer me it would be helpful.

    1. Andrew Minalto

      Hi Guillermo,

      Thanks for your comment.

      They can do whatever they want really… the real question is – do you really want to take all the risk buying just ONE unit of such an item?

      When you count in shipping, taxes and everything else, it would probably be cheaper and safer for you to buy that item locally. Alibaba is a B2B platform where people buy items in bulk, it’s not really suited for retail sales.

      Thanks,
      Andrew

  31. Glen Smith

    I saw a new product on Alibaba.com which interested me, the product itself was cheap to buy at around £2.20 each and with an order of around 240 of each product, they are advertising free shipping to the UK. So after reading what you’ve stated about some Chinese companies believing that they are doing you a favour should I stay clear of this offer ?? or should I go back to them and ask them to send me the goods via a more safer way of receiving goods ??

    Best regards

    Glen

    1. Andrew Minalto

      Hi Glen,

      Thanks for your comment.

      FREE shipping doesn’t necessarily mean that they’re using DDP terms. It could be just that – free shipping.

      You should contact them and ask about the shipping method they use. Most likely it will be a courier – then clearly state them that you want the REAL value to be
      shown on the invoice and Customs declaration, so that you can properly pay taxes when goods arrive in the UK.

      Thanks,
      Andrew

  32. Jae from Gorilla ROI

    Hey Andrew. It’s not uncommon that manufacturers from abroad will usually misunderstand some rule or regulation. But unfortunately, this doesn’t excuse anything. The problem magnifies when the manufacturer throws you, the client, under the bus.

    Btw, we’ve started listing our products on Amazon UK now. Wish us luck!

    1. Andrew Minalto

      I think they know EXACTLY what they’re doing – they have been doing this for many years with small packages sent via normal mail and now have “transferred” this knowledge to B2B orders as well.

      Good luck! 🙂

      1. Jae from Gorilla ROI

        Oh wow! So you really think they do know, huh? I was being optimistic and giving them too much credit then. Doing it repeatedly throughout the years is a big red flag. That really sucks.

        1. Glen Smith

          Does that mean that you have received goods for years via DDP without having any customs charges or any other problems ??

  33. Hi, I will be placing my first order. I will shipping via air express through my supplier. Should I ask my supplier to ship air express door to door? Or is all air express shipping door to door? Is there a difference in air express shipping DDP, DAP, etc? I keep hearing about the DDP scam with Alibaba suppliers, but not sure if that applies to air express shipping as well.

    1. Andrew Minalto

      Yes, in 99% cases EXPRESS means door to door.

      If your supplier offers DDP terms, with express, most likely they will under-value goods. In same rare cases they could have a genuine DDP contract in place with the DHL, but that’s very rare in China.

      How to know they’re trying to scam you? Simply ask for two quotes:

      1) One ex-works (EXW)
      2) One with DDP

      The DDP one should be at least 25% higher. If that’s not the case, they’re not offering you true DDP terms.

      Good thing with couriers though is that when you get a tracking number, you can contact them in advance, supply the real invoice to them so that they use that for Customs clearance and you can pay all the taxes properly.

      Thanks,
      Andrew

  34. Theresa Brown

    Thank you once again for a very informative post. We are hoping to make our first order very soon, so it came at a great time. So, am I right in saying we should ask for FOB and then if we want our goods shipped by sea, arrange with a company like Woodland Group?

    1. Andrew Minalto

      Yes, that is correct.

  35. Hi Andrew,

    I just discovered your blog, it’s great and full of info. You have a new reader 🙂

    This post on DDP is somehow spot on for my situation. I am a quite new FBA seller and have just imported my third stock via sea shipment. I use a freight forwarder separated from my supplier. I have requested DDU for this shipment.
    I have to say that I am not Vat registered, however I have been told that I can claim back the VAT paid on this import once I will register for VAT (hopefully in 3-4 months).
    Few days ago my freight forwarder sent me the custom and vat bill, which was just a PDF showing the breakdown of VAT and Custom fees. In this document my company name shows up as “Importer”. The FF said that they had already paid it on my behalf. The PDF doesn’t not show the VAT number used to import. A few seller friends told me that it should show the FF’s VAT number, so that when I will claim this vat back, HMRC can track who paid it. Obviously in this scenario my FF is not authorised to claim it.

    My FF refuse absolutely to provide me with the same document showing their VAT number for several reasons which sound all kind of BS. I was going to pay anyway fearing that my goods would be held at custom, however the good news is that the goods have actually been shipped and are now at the amazon FC. In this scenario now I have more leverage as I am already in possession of my goods.

    what do you think I should do? I think I will refuse to pay until they prove that they have paid the right VAT and Custom amount. I am afraid they might have paid less than the due amount and just pocket the difference. Do you think that if I dont pay the FF and arrange payment with HMRC, the FF has some legal way to sue me?

    Thank you so much for your help Andrew I really appreciate the support you give to your community!

    1. Andrew Minalto

      Hi Mike,

      Thanks for your comment.

      Hmm, hard to say what is going on there… In my mind, they should have no problem in showing their VAT number on the invoice. On the other hand, I don’t know ALL the legalities of this…

      Can they show you the Customs declaration or something that proves that they have paid all the taxes?

      Thanks,
      Andrew

      1. Hi Andrew, thank you so much for your prompt reply. No, they refuse to show any kind of Custom receipt or any proof that they have actually paid. I think I would just rather avoid paying the freight forwarder and arrange things directly with HMRC…

        thanks a lot mate – appreciate your help 🙂

        Have a great day!

        Mike

        1. Andrew Minalto

          Yeah, that sounds very scammy to me….

  36. Melodee Lucido

    Andrew, thank you so much for being such an amazing, brilliant person. You put so much value into all you do. I heard about you thru Dylan at flipflip. I am a brand new reseller and my head is spinning with info 🙁 I am 67 yrs young and starting over after getting wiped out by hurricane Michael—business and all. So it will be a bit til I can jump into your course. I was so excited after watching all the intro video (yes, it was loooong; I stayed til the last breath) I couldn’t sleep at all . . so I got up and re-watched it hahaha. I look forward—so very much—to being in your program. It is never too late to start all over again. Thank you more than words can say. I believe that the Uni brings just the right teacher when we are ready—-if we are showing up to life daily. I will implement the things in the video and have new joy and excitement at my j.o.b. Mannny blessings to you.

    1. Andrew Minalto

      Thank you so much, you made my day! 🙂

      and best of luck with the new venture!

      Andrew

  37. Hi andrew, i have just started shipping from china so very new to importing and im guessing my supplier has used the DDP as he hasn’t sent me any tax or duty documents so i have now asked for these, i would like to do the process properly and would like to use a freight forwarder, would you recommended using the company that you mentioned above? I will be using sea freight mostly all of the time due to the weight of product. Thanks

    1. Andrew Minalto

      Hi Craig,

      Thanks for your comment.

      Yes, absolutely – Woodland Group is a great company to work with.

      Andrew

  38. Marcin Kozlowski

    Hi Andew,
    Thanks for a great article. How do you think when you use a courier for a smaller orders for example up to 60 kg.

    It’s best to organize a courier company from my end and let them to collect an orders from the chinese factory or let to organize my chinese supplier but choose exw service and tell them to use a real value of the goods on the declarations?

    Thanks for your support
    Martin

    1. Andrew Minalto

      Hi Martin,

      Thanks for your comment.

      Let Chinese supplier organise courier delivery, yes. They will get a much better price than you.

      Just make sure they declare full value of the goods, include REAL invoice with the shipment so that everything goes smoothly at Customs. If you have a tracking number on hand, you can contact courier company directly on your own and say that you will need to declare goods, send them invoice etc. so that they have REAL numbers on hand.

      Thanks,
      Andrew

  39. Very interesting!!
    I have used DDP and challenged my supplier to provide proof of tax payment. They failed to show any documentation hence I am very certain I have been scammed. This was my very first shipment from China. Is there any action I would need to take to rectify this error and pay my tax accordingly? How can I do this? Or should I hope this one-time “offence” won’t be recognised by HRMC and I will ensure for future shipments that everything will be paid correctly? Thanks!!

    1. Andrew Minalto

      Hi Alicia,

      Thanks for your comment.

      Yes, you need to contact HMRC and ask them for a special form – so basically you need to do the Customs clearance procedure now, after the goods have been already delivered to you.

      You can of course hope that no-one will notice this one transaction, but I personally wouldn’t do that.

      Thanks,
      Andrew

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