Many of you will choose to import goods from abroad (outside the European Union). If and when you do, it’s essential to fully understand how importing works; what extra costs are involved, time frames for delivery etc.
For many new traders, Importing sounds like a nightmare to go through. But in fact, it’s not that complicated at all IF you know the basics behind the importing process – payment, shipping, taxes and customs. In this blog post I’ll try to cover most of the important aspects of importing from China and other countries outside the EU.
What does “importing” mean?
In general, importing means that you’re buying goods from a supplier outside your country. However, in my examples I won’t be counting European Union countries as goods can be freely moved across the EU without paying extra import duty or VAT. For most of you, China and the United States will be the top two countries to import from, so let’s cover them in detail.
Shipping Methods
Shipping costs will make up a substantial percentage of your total product cost, so it’s important to keep them as low as possible at all times. As a general rule of thumb, the bigger your order, the lower ‘per item’ shipping costs you’ll face. There’s no point in importing one pair of unbranded shoes from China as the shipping costs will be far more than the cost of the product itself. Volume is the key to success when building your eBay business around an “Importing from China” product sourcing concept. But that doesn’t mean you have to start off with full container loads either!
Here are the 4 most popular shipping methods you can use to import goods from China:
1) Regular Post. This means normal, regular China Post which can take up to 6 weeks to arrive. No online tracking is provided. It can be used for parcels under 2kg. Usually, you will only use regular post for samples and again ONLY if time is not that important and you can afford to wait a few weeks for a package to arrive. China Post is not the most reliable system so be prepared for lost/stolen packages.
If at all possible, I try to avoid using China Mail for any shipments as the delivery time is simply too long.
If your supplier is located in Hong Kong, you can use HK Airmail which is way more reliable, comes with a tracking number and usually arrives within 5-10 days.
2) Courier. Shipping with a courier company will be the most suitable method for most people starting out IF it involves small, lightweight items. With courier companies such as TNT, DHL, UPS or FedEx you pay a premium price for each kilo BUT you get fast delivery times and an online tracking facility. These days most courier shipments take just 3-5 business days to arrive in any Western country from anywhere around the globe. I personally use TNT and DHL most of the time as their prices have worked out lowest for me. For a 50kg package, expect to pay around £4 or £5 per kilo.
3) Air Freight. This is somewhere between courier shipping and sea freight. Shipping times vary from company to company, but in general range between 5 to 10 days which is not bad at all! With Air Freight costs will be significantly lower than with courier companies, but extra work is involved when the goods arrive in your destination country. With Air Freight you’ll usually have to handle documentation and customs clearance on your own (unlike with courier companies), which for many newbies may seem impractical. Of course, you can always outsource these tasks to a freight forwarding company at an additional cost.
With Air Freight, expect to pay £2-£3 per kilo for a 100kg shipment.
Air Freight is usually cost effective once shipments are in the range of 100kg or more UNLESS very bulky items are involved; if that’s the case your only viable option is to use Sea Freight.
4) Sea Freight. This is the most popular shipping method used by big companies to import goods from China. The cost per kilo (£100-£150 per pallet, even less if you can order full or half-container loads) is very low but the downside is the lengthy delivery time. Depending on where you’re located it will be in the vicinity of 30 to 40 days in most cases.
Just like with Air Freight, you’ll have to take care of the documentation, customs clearance and delivery of goods from the port to your home or office. It’s not that complicated to be honest – I do this on my own on a regular basis, but I understand that for newbies it could seem too complicated and that’s why I recommend using a freight forwarding company that will take care of all the procedures and deliver goods right to your door.
Also, with Sea Freight it’s very important to calculate all the EXTRA COSTS involved once the goods arrive in your country. Your supplier will usually give you the FOB price, which means that the goods are loaded onto the ship. But that’s not the end of the story! Once your shipment arrives at the port there are all kinds of extra charges, such as:
- Unloading charge;
- Port fees;
- Docking fees;
- Storage fees;
- Clearance fees;
- Etc.
And I’m not talking small figures here! These fees can run into hundreds of pounds! That’s why it’s crucial to take these numbers into account BEFORE you order any goods so that you know precisely what your final product cost will be.
Again, the easiest way to keep these costs under control is by using a freight forwarding company. You can ask them to quote for door-to-door delivery which includes all the fees associated with Sea Freight shipping.
Even with all the additional fees Sea Freight is still the cheapest shipping method for imports from China. Remember that it’s cost effective ONLY if your order is big enough. Usually, a half pallet or one full pallet will be enough if your margins are right. Again, this will depend on the kind of goods you’re importing, their value and weight. Sometimes Air Freight offers the same savings as Sea Freight with the added bonus of much speedier delivery.
In general, Sea Freight is better for bulky items or in cases where the shipping time is not that important. Personally I try to stick to couriers and Air Freight as often as possible as I just can’t stand the long wait involved when using Sea Freight. (but then again I deal mostly with small, light weight items).
Advantages of Using a Freight Forwarder
Here is some good news – I have recently started recommending a freight forwarding company called Woodland Global. You may already have heard about them if you’re an active member of The Wholesale Forums as Darren, who works for them, is a member there and he helps people with questions about importing.
Woodland Global is a great company to deal with and so far I have only heard positive feedback about them:
- There are no yearly or joining fees;
- They’re UK based and very easy to get in touch with;
- They’re fast because they ship containers from China on a weekly basis;
- Their pricing is very competitive, even for small-time importers;
- They will deliver goods to your door and take care of all the documentation.
In a word – Woodland Global is a perfect solution for small-time importers! Their fees are very affordable and they’ll even deal with small orders. If you’re interested in their services and need a quote, get in touch with Darren on TWF or simply use the contact page on their website.
Imagine the kind of opportunities this opens up to you, especially if you’re just starting out on your journey and you’re still looking for the perfect niche? Most people stay away from bulky items as they don’t want or don’t know how to deal with Sea Freight shipments effectively. Now, with the help of a freight forwarding company, it’s suddenly not so much of a problem anymore!
Woodland Global can even pick up goods for you in China and deliver them to the nearest port. However, if possible, always try to arrange shipment of goods to a Chinese port via your supplier, as this will often work out to be cheaper.
Shipping from the US
If we talk specifically about importing from the USA, the cheapest option for sending parcels is with the US Postal Service. They’re reasonably priced, especially if you don’t opt for their fastest shipping method. You can send up to 30kg per shipment and the closer you get to that 30kg mark, the cheaper the price per kilo.
Even if your order comes in at 50kg, you can simply split it into 2 shipments and still send it via USPS. Of course, this will only work with small, lightweight or valuable items, not furniture or LCD TVs. For bulky items you’ll want to go back to using Air Freight or Sea Freight.
As you can see, each method has its advantages and disadvantages, but in general you should be able to make your decision based on these 3 major factors:
1) Size and weight of the shipment
2) How long you can wait before the shipment arrives
3) Value of goods
In other words, the best shipping method will depend on your order!!!
Payment Options
When dealing with ANY supplier for the first time, you have to be extremely careful. There are so many scammers operating out there in the wholesale industry, so before you decide to send money to your supplier, make sure you do all the background checks available to you to make sure you’re dealing with a legit company. And even then, always, always start with a small trial order to avoid huge losses if that supplier turns out a scammer.
When you have done all the checks and verified the supplier, you can place your first order. Which payment method is safest to use? Usually, suppliers will accept the following:
Wire Transfer – this means sending money from your bank account to the supplier’s bank account. This is the most common payment method used in B2B transactions. Wire Transfer doesn’t offer ANY protection, so only use this method with suppliers you trust 100%. Sending money to a supplier in China can take up to 5 working days.
Transfer fees will vary from bank to bank but in most cases will be in the region of £10-£30. Most banks offer international wire transfers at a reduced cost when you use the bank’s ONLINE banking facility. Finally, the fee you pay your bank to carry out this transaction is usually a fixed one which means that the more money you send per transaction, the lower per pound fee you’ll pay.
Most Chinese companies will accept wire transfer as a default payment option. If they don’t, it may be a sign that something dodgy is going on. Make sure you only send money to the company’s bank account and not to a personal bank account, no matter what story the Chinese supplier tells you.
It’s worth bearing in mind that even though your bank may charge you only a fixed fee for making the payment, that there are usually additional fees involved. Banks typically add a markup to the exchange rate and so you end up having to pay more to send money overseas.
TransferWise: Companies that specialise in international money transfers could save you a substantial amount of money if you’re looking to make frequent transfers to your Chinese suppliers.
FCA and FinCEN regulated, TransferWise are up to eight times cheaper than banks when it comes to making international payments. They always convert money at the mid-market exchange rate – ie. the rate you see on Google is the rate you’ll receive. The only fee you’ll pay is a small, upfront fee on the value of the transfer. You can also make global USD payments to your Chinese supplier and with their fixed fee of $2 + small % cost of currency conversion, their rates are very competitive.
Setting up the payment is simple as well. You sign up for a free account, set up your transfer by entering your supplier’s bank account information and state what currency you’d like to pay them in and then fund your transfer. Options include bank transfer and debit/ credit card. Your supplier won’t need to do anything. For them, it’s just like receiving cash into their bank account.
With over 3 million customers and co-founded by the first employee of Skype, you can be assured that your money is sent securely. However, just like with a normal wire transfer, your money is not protected if your supplier turns out to be fraudulent so it’s best used when you’re paying a supplier you trust.
You can find out more about TransferWise in my post here.
Credit/Debit cards – one of the safest ways to pay for goods is by using your credit card. Chinese suppliers will vary rarely take credit card payments but companies in the EU or US will, in most cases, be happy to accept credit card payments. Some companies may add on a small extra fee to cover the fees they have to pay themselves when they accept a payment by credit card.
Why are credit cards good for paying your supplier? First of all, with most card issuers you can initiate a charge-back if something goes wrong with your order or the supplier turns to be a scammer.
Secondly, most cards offer a cash-back or points system where you can actually get some money back in the form of bonuses from your bank – be they frequent flyer points or extra cash in your bank account.
Lastly, if the supplier accepts credit cards it’s a pretty good sign that he’s legit, especially if we are talking about suppliers in the UK and US. Why? Because it’s not that easy to set up a merchant account and start taking credit card payments. Companies have to undergo a strict verification process to be able to take card payments and this is something most scammers won’t do.
PayPal – I’m sure you’re fully aware of what PayPal is and how it operates. These days, most Chinese suppliers will accept PayPal payments. All your payments with PayPal are protected, so you can always open a dispute and request a refund if a supplier has scammed you. Now, you will not always win those disputes, but PayPal’s most recent policy is generally buyer friendly and sellers are the ones who have to prove that the transaction was legit and the goods were delivered.
Again, it’s not that easy to open a PayPal account in China, which is why scammers try to avoid using PayPal and will push WU, MG or other similar, unsafe payment methods. As with a wire transfer, make sure you’re sending money to the PayPal account of the company you’re dealing with and not a personal PayPal account.
Escrow – Legitimate suppliers know how important safe payment methods are to buyers and that’s why when dealing with suppliers on Alibaba, you now have the option of using Alibaba’s escrow payment system.
What is escrow? With escrow, you first send the money to an escrow company and they hold it for you until you receive and inspect goods and only then release the money to your supplier. It is by far the safest payment method as you ONLY pay your supplier once you have received and inspected the goods.
Western Union, MoneyGram etc. – NEVER ever deal with a supplier who only accepts Western Union, Money Gram or similar payment methods! The only time you should use Western Union is when you are ordering product samples as WU transfer fees are much lower than bank transfer fees.
But only do it with totally verified, trustworthy suppliers. When you use WU, you can’t actually send money to a company; only individuals can send and receive money via the WU network.
Most scammers will only accept payments via Western Union. If branded goods are involved, it’s a sure sign that you’re dealing with a scammer!
Personally I try to stick with PayPal when dealing with Chinese suppliers and PayPal or credit card when dealing with US based suppliers. Wire transfer is usually ok for European suppliers and manufacturers, if we are talking about verified suppliers.
Currency Exchange Rates
There’s not much really you can do about currency exchange rates; you simply have to accept them as an additional cost when dealing with suppliers abroad. If you’re dealing with large amounts of money (in excess of £10k+), you can look for currency exchange companies that may offer you better rates. Personally I have never used such companies as I’m only dealing in high profit margin items these days where 1% doesn’t have any impact on my bottom line.
If PayPal is the only payment method offered by your supplier, you simply have to accept PayPal’s exchange rate as it is. If wire transfer is an option, you could probably get a better rate from your bank BUT they’ll take a commission on an international transfer which will offset all the savings you would make on the currency exchange.
If you have a really strong, long-term relationship with your supplier, and you’re 100% confident they won’t scam you, try offering a PayPal Mass Pay option to your supplier – in return for a percentage from the total you have to pay (PayPal won’t charge any fees to a supplier using Mass Pay).
So for example, if you pay $1000 via PayPal in the usual way, PayPal will charge a fee of around $30 and the net amount the supplier will receive will be $970.
But if you agree to using Mass Pay, the supplier might charge you only $980, generating savings for both parties. $20 may not seem that much but that’s only if you send $1000. For larger payments this method can save hundreds of $ in fees! REMEMBER, only do this if you’re 100% confident about supplier you’re dealing with!
To sum it up – factor in currency exchange fees as an additional cost that you can’t do anything about! PayPal will probably turn out to be the best payment method for you, especially if you sell on eBay (buyers will also pay you via PayPal, simplifying cash flow for your business).
Taxes
When you import goods into the EU from abroad, you have to pay two kinds of tax before the goods are actually released to you:
- Value Added Tax (VAT)
- Import Duty
The VAT rate is different for each European Union country, so make sure you check your country’s specific VAT rate before making any calculations. The current VAT rate in the UK is 20%.
Import duties vary widely from product to product so do check the accurate rate with the help of this free online calculator:
http://www.dutycalculator.com/
Import duty will be usually be in the range of 2%-5%, but with some products it can be as high as 10% or even more. On the other hand, with some product groups you won’t have to pay import duty at all, so be sure to check out that online calculator to see exactly how much import duty you’ll have to pay for your particular goods.
REMEMBER!!! Import duty is payable only on the goods’ value, but VAT will be applied to the TOTAL of:
Goods’ value (price paid to the supplier)
+
Shipping
+
Import Duty
So VAT is calculated on the value of the goods + shipping + import duty. I just wanted to clarify this as people often get a nasty surprise when they see a bigger number than the 20% of the goods’ value they were expecting.
Register for VAT or not?
Many people who are just starting out importing will ask this question – should I register as a VAT payer before I import goods from abroad? The answer is NO, NO and NO! Without going into numbers and complex calculations, you will want to stay away from VAT registration as long as possible (that is, until you reach the maximum turnover after which you HAVE to register for a VAT number by law).
So just remember that you don’t have to register before you reach the threshold. The current VAT threshold in the UK is £77K over the previous 12 months. You can even ask for an exception to be made if your turnover exceeds this amount temporarily. You’ll find more details on the HM Revenues and Customs website. VAT thresholds vary from country to country, so if you’re based outside the UK, be sure to check the local laws regarding VAT registration.
Read more about VAT registration for small businesses here.
EORI Number
A few years ago the EU introduced an EORI number to monitor imported goods. This number is used for statistical purposes and there are no extra costs involved.
You’ll find more information about EORI on the HMRC website. As a general rule of thumb, if you’re a registered business it’s a good idea to register for EORI before you start your importing activities or else the process of receiving your shipment when the goods arrive in the UK may be delayed.
EU regulations, CE mark.
With some product groups you have to be extremely careful when importing goods from China, or any other country outside the European Union as you must ensure they comply with EU rules and regulations. Some sensitive product groups are:
- Health & Beauty products
- Electronics
- Children’s toys and equipment
- Food
- Chemicals, drugs, creams etc.
What you’ll find is that most Chinese suppliers will tell you that all the certificates are in order : DON’T take their word for it! If you can, verify that all the documentation is genuine so you can import those goods into the EU without any chance of them being seized and destroyed at customs.
Copyright & Patent Issues
Another sensitive question – patents. You’ll eliminate copyright issues as long as you stay away from branded items and items with branded designs (such as kids’ toys with Disney characters, company logos, movie characters etc.) With patents, the situation is more difficult as there is no easy way to find out whether an item you want to import from China doesn’t breach any registered patents. What you can do though is ask your supplier about potential issues with this BEFORE you place your order.
Patent issues often come up with electronics and specific instruments and devices, so if you’re dealing with some really fancy device or piece of equipment, make sure the supplier’s products don’t use any patented, protected technology.
Conclusion
Don’t be afraid of the importing process, but start small.
It’s not as complicated as it looks, especially if you use courier as a shipping method. With couriers you don’t have to worry about long shipping delays or customs clearance as they will take care of all the documentation for you.
Take it step by step – place a small order on AliExpress and see how it works out. On AliExpress you’re protected by an Escrow Payment System, so if something goes wrong with your order, you can always open a dispute and get your money back.
Good Luck!
Andrew
[…] understanding what it means for them. For example, people contact me and ask how Brexit will affect importing from China, when in fact, it won’t make any major […]
Hi Andrew, very informative article. Thank you, I hope you are still reviewing comments. I want to start selling small stainless steel lockets, I have placed a couple of small test orders with the likes of Aliexpress and have received those. The likelihood is that the orders won’t contain a huge number of items, maybe 20-30 with a value of around £30-40, max £50, maybe placed once or twice a month, they will be posted by China Mail and reach me via Royal Mail. I’ll be setting up as a sole trader to go legit. My question is about paying Vat on these orders, do I have to ? I don’t ask so as to shirk responsibility, I want to do things legit. Im not going to be VAT registered as will be a very small turnover and won’t be anywhere near the threshold required. However I’m conscious that when I start to show expenses as payments to Aliexpress on my book keeping, then HMRC will question these purchases made from outside the EU and then raise issues of VAT. So do I pay Vat on these kind of imports and if so what is the process ? Many thanks.
Hi Dick,
Please take a look at this article for more information on VAT thresholds on imported goods:
https://andrewminalto.com/import-duty-vat-threshold/
Thanks,
Andrew
hi Andrew
Great article. Have you used a courier for low bulk, low weight packages?
My supplier is saying we can use Fed Ex for $143 shipping cost for 100 t-shirts, its 1 box weighing 25kg.
Would this be cost effective, and would i need a freight forwarder/shipping agent as well? Or would Fed Ex look after everything and simply bill me any customs duty owed or any other charges once my carton was in the UK?
Hi Derek,
Thanks for your comment.
Yes, for that size/weight package, courier is the ONLY cost effective way to do this. And yes, FedEx will take care of Customs clearance process and simply invoice you for VAT, import duty and processing fee. Just make sure you remind supplier to put REAL value of your order on the commercial invoice and Customs form, so that the shipment does get cleared through Customs properly and you pay all the correct taxes.
Thanks,
Andrew
Hi Andrew,
You were recommending … “you will want to stay away from VAT registration as long as possible (that is until you reach the maximum turnover after which you HAVE to register for a VAT number by law).”
Tha’s all good by me, but on the other hand, you advised to get the EORI number before importing and I realize they request this among others:
“Before you apply EORI
To apply you may need your:
VAT number and effective date of registration – these are on your VAT registration certificate”…
sorry but I’m a little confused now if you can clarify would be much appreciated.
Thanks for your great Blog!
Regards,
Gerardo
Hi Gerardo,
No, that’s not true – you don’t need a VAT number to register for EORI number.
If you don’t have a VAt number, just leave that VAT field empty.
Thanks,
Andrew
Hi Andrew,
What a very informative article so thankyou for that. We are currently looking at bulk ordering baby carrier car seats from China and I realise there has to be several safety margins that must be met before doing so. Firstly where do you suggest we start? We are looking at branding our own car seats rather than buying an established brand and in the future we look to expanding with other baby items and consumables Any help or guidance would be greatly appreciated. Many thanks!
Hi Gemma,
Yes, that’s correct. Items like baby carrier seats will need to be certified.
You should contact a Testing House and ask them about steps you need to take, how much it will cost etc.
Thanks,
Andrew
Hi, great to have a web site/message board which answers a lot of questions, thank you so much. Still confused though.
I imported some key rings this week from China as a starter (my second shipment) to see how they go
It seems that the sender under valued the package. I paid £480 (£300 product and £180 postage). 7kgs sent 3 day post. 800 units.The package ‘cost’ had £45 on it.
I am not VAT reg or EORI reg.
I had to pay £63 also to the shipping company on arrival (paperwork & duty)
Am I doing something wrong here?
Sorry I am a novice and in need of advice as to what I need to address and are postage/duty costs excessive?
Hi Ellie,
Thanks for your comment.
What does the paperwork say? What was the goods value that taxes were calculated on? If it shows real/full value, then you have nothing to worry about.
If not, please check this post:
https://andrewminalto.com/shipment-without-customs/
Thanks,
Andrew
Hi, having an absolute nightmare finding out if a company I’m dealing with in China is legit. Any advice please? thanks, Liz
Hi Liz,
I have several good guides on this topic:
https://andrewminalto.com/top-10-alibaba-scams/
https://andrewminalto.com/alibaba-scam-exposed/
Thanks,
Andrew
Thankyou for this website, very useful, Iam thinking of importing a small petrol powered mini digger from China to France, it seems, that while reading your notes and other comments, that its best if I get the supplier to send using a DPD agreement, so all the associated costs are known at the outset, I just have to pay by “Paypal” and sit back and wait for the knock at my door. I cannot find out if a mini digger for home use is classed as agricultural equipment of not, and will this effect the import duty. Thankyou
Please, don’t do it.
This website and information is for business owners, not consumers.
Buying such one item from China is WAY TOO RISKY for you! You can end up with a damaged unit, lots of extra fees etc. etc.
Just buy the item locally, from a reputable seller, who can provide warranty etc. Trust me, it’s worth paying more for that for an item like that.
Andrew
Hi Andrew,
Thank you for the valuable post always 🙂
I’m planning to import private label handbags made of cotton and am struggling to find the answer about the EU labelling requirements.
I understand handbags don’t need to be CE marked but do they still need to be labelled to show the materials and country of origin?
I am not sure if handbag falls under textiles category, where then I would probably need to label for the materials.
If you know something or a reference website, it’d be super helpful!
Warm Regards,
Lem
Hi Lem,
Thanks for your comment.
Hmm, unfortunately, I don’t have experience with importing handbags… best bet would be to contact Trading Standards and ask them if there are any special requirements on labelling.
Thanks,
Andrew
Hi Andrew,
Thank you for your reply and yes I will do that 🙂
Warm regards,
Lem
Hi – this has to be the most informative thread/article ever! VAT-registered business, selling low-value keyrings (£20) & electronic components around the world, and buying some items from USA/China in order to manufacture them. I have not got an EORI because I ship via Royal Mail and rarely receive items by courier (I’m not so bothered about speedy delivery to me). Do I need one right now? Obviously I hope to increase business, but volume is intentionally low at the moment due to other design projects. I’ve read on HMRC website something about having to record all exports/imports as a declaration – is that really the case? I’ve never been asked for an EORI, hence I’m now totally confused! Any advice appreciated… Thank you!
Hi Helen,
If Customs have never asked you for EORI, you most likely don’t need it.
There’s a certain value of orders/shipments EORI is mandatory – as far as I remember it was around £800 mark. That is for one individual shipment.
Thanks,
Andrew
Hi Andrew! Thanks for help us.
If i want to buy cosmetics and accessories from Alibaba to uk, and sell those itens in my own website, I have to registre my business or I can buy an sell things without a registre until reach 77k to pay VAT threshold?
And what is the maximum order (£) I can do before became a business? I mean, to receive my order with any problem.
thank you so much for your help.
Hi Caroline,
Thanks for stopping by.
You have to register at least as a Sole Trader (or Ltd. company) if you want to import goods from China and re-sale to make a profit.
You can, of course, import those products as an individual, that’s fine – for personal use. But if you want to re-sale them, you need to register a business.
It has nothing to do with turnover thresholds.
Andrew
Hello Andrew!
I’ve come up against a few problems, i’m using the alibaba trade assurance service to protect myself during a trade. However the supplier seems to be reluctant to put the product specifications within the ‘product quality standards’ section of the contract.
Instead they’ve put comments such as ‘ everything is intact, everything works fine’ in the ‘product description and specification’ section only. I’m sure you’re familiar with the contract format and im sure like me, you see this as a knock against a reason to buy!
Any advice on what i should do? FYI these people accept debit cards for payment, which you’ve mentioned is a good sign
Also if i were to go with a longer shipping process (20 days or something) with a service like china post, do these guys ( like DHL ) deliver straight to my door?
Thanks again!
Thank you for your answer, but I am still confused with VAT . Do I have to pay VAT to the HMRC for my order?
No, you don’t have to do that as shipping terms already include it.
Hi Andrew, I done my first shipping from China today. China’s partner (seller) recommend to me shipping as “duty free air door to door delivery-tax including ” DPD. Does it means I do not have to pay “import duty” or VAT? Could you please explain me how this shipping method work. Many thanks for your help
Hi Marcin,
Yes, that means that taxes are already included in the final cost price you pay.
There are two ways Chinese suppliers usually can offer DDP terms:
1) They use a courier who offers this as a service;
2) They use a EU based warehouse as middle men/processing facility where all shipments from China are cleared through Customs and then delivered to final destination in Europe.
Thanks,
Andrew
Hi Andrew
Something i forgot to mention,
My supplier seems to be giving me an option on maybe not declaring the full amount of the package to customs when they drop it off, I’ve tried to be very clear to declare the true value of the product so it can be taxed properly, id like to avoid a random payment/charge months down the line
The handling fee i mentioned, is this a fee that is only charged if my parcel is intercepted and checked? in which case if declared correctly it would certainly be a cost that i would have to bare?
thanks again
Yes, that’s correct.
Handling/customs clearance fee applies ONLY if the correct value is stated on package, and it is above the limit and package goes through Customs Clearance process.
Thanks,
Andrew
Hello Andrew,
I’m about to make my first ever import for a relativity small sample amount of 550 GBP, I’m fairly confident with my research into my supplier ect and understanding of the whole process however I’ve a few questions regarding all of the ‘outgoing’ costs I’ve taken into account, i fear i may be missing something!
I’ve accounted for duty/shipping cost/VAT and currency exchange charge ( if any ) but i dont quite understand other things like the ‘handling fees’
My supplier have said they would be using DPD which is their ‘cheapest’ express postage which would, if i’m correct.. deliver right to my home address? ( the box amount should be fairly small and weigh under a KG
My main question is, with regard to what I’ve mentioned what are any costs that are ‘less obvious’ that I must account for
I am not VAT registered as you recommend and would like the product delivered to my home address
Additionally, my supplier are allowing me to pay by Visa/debit – would you take intemperate this as a ‘good’ thing that demonstrates a reason to trust? i’ve read its a safer payment option
Thanks for your help!
home to hear from you soon
Hi Adam,
Thanks for stopping by.
Yes, if it’s via DPD, that will be a courier delivery, to your door. There won’t be any excessive extra fees associated with this shipping method. You will have to pay a Customs Clearance fee which is usually no more than £20 to £30.
Yes, of course – a card payment shows that they are 100% legit as scammers can’t use credit card payments – you can easily reverse a card payment and get your money back.
Hope this helps Adam & Good luck with the first shipment! 🙂
Thanks,
Andrew
Thanks very much, great information!
So the cost for DPD to handle the customs of my import is usually around 20-30 pound no matter the weight?, in that case what is the ‘handling’ fee which I’ve found is 2.5% or 11 GBP which ever is more ?
If a price is quoted that is over the limit, it is 100% certain my package will be searched? it contains electronic goods
Is there any other fee i may be missing?
Thanks again!
The handling fee probably is the same Customs Clearance fee in this case.
No, it’s not 100% guaranteed that your packaged will be manually checked/searched at Customs.
Thanks,
Andrew
Hello Andrew,
I’m hoping to move into the realm if importing used phones from a certified Chinese based provider ( these people seem to have all of the ‘checks’ for a reliable Alibaba supplier, however of course i remain sceptical)
I understand for such devices there is no import tax applied which is great, however VAT is still applied at 20% for the UK.
You mention that it’s perhaps not a good idea to apply for VAT registration as a starter, i was hoping to recover a portion of the VAT by using the VAT rebate scheme ( i’m fairly new to the concept, forgive my ignorance if any! )
Would i be right in saying in order to reclaim VAT in anyway at all, i need to be registered? ( my income would be far below the threshold )
An example:
( i neglect the shipping cost here )
I import a product of value 100 + 20% vat ( Import VAT = 20 )
I receive this product and then sell online for 200 + 20% vat ( Sale VAT = 40 )
Would I be able to claim back the difference of (Sale Vat – Import Vat)?
This 20% on all transactions really bites into my margin, i’m sure I’ve got something completely wrong!
Thanks for your fantastic posts!
Hi Liam,
Thanks for your comment.
Yes, your calculations are right. BUT you’re missing the important point here – when you become VAT registered, you have to charge that VAT on end sale – £40 in your example. Yes, you get £20 back but still, using your example, your end profit is £100.
Now, take a look at same example if you’re NOT VAT registered:
* Import a product of value 100 + 20% vat ( Import VAT = 20 ) – cost is £120
* Sell the item for £240 (no need to charge VAT as you’re not VAT registered)
* Profit – £240 – £120 = £120
So, by NOT being VAT registered your profit is actually £20 more compared to a VAT registered situation.
And this is exactly why I recommend that people don’t sign up for VAT BEFORE they reach the threshold.
Hope this helps!
Andrew
As an R.E to my last message
i notice i’ve mixed the title of those calculations up on the peice of paper i used to do my calculations , you’re totally right!
– Non vat profit is 26 pounds
– Vat registered profit, even with the VAT rebate is only 3 pounds ish!
That’s very interesting, I’ve found so many resources online treating the vat refund system as a huge advantage, are there any cases if you’re under the threshold where the system could benefit you?
Also while selling on ebay as a business seller, how would vat work for me if i do not have a vat registration number?
Thanks again!
Hello Andrew,
Thanks for your quick reply!
Ah yes i see your point, so as a non VAT registered i personally don’t have to charge VAT on my products but I have to pay the VAT when i buy them for resale
Another factor to this is that i wish to sell on eBay ( in conjunction with paypal ), which themselves have some fees that jeopardise a decent margin.
I think i’m getting confused because on my excel sheet I’ve prepared it suggests VAT registration is an advantage ( assuming i’ve got it all right for the realm of ebay selling! )
I’ll try to communicate it across as best i can: ( all in GBP )
Firstly non-VAT registered:
Product + Postage import = 278.36
Vat on import at 20% = 55.67
Total import cost = 334
Sell for 395
– ebay business account fee ( 5 % ) = 20.54
– paypal fee (3.4%) =13.43
– paypal 20p fee per transaction = -0.20
Sale price after fees = 360
Profit 360-334 = 26
Vat Registered scenario:
Product + Postage import = 278.36
Vat on import at 20% = 55.67
Total import cost = 334
Sell for 395
– ebay business account fee ( 5 % ) = 20.54
– paypal fee (3.4%) =13.43
– paypal 20p fee per transaction = -0.20
– 20% vat on sale price before fees = 79
Sale price after fees and VAT = 281
Since registered, eligible for a tax rebate claim.. so accounting for that
VAT on sale – VAT on import
79-55.67 = 23.4 ( is 23.4 the amount of VAT i now need to pay? )
So now instead of adding 79 to the 281 ( sale price after fees ) i add 23.4 to 281 giving a sale price after fees and rebate vat of 337.43
giving a profit margin of 337.43-334
profit of 3.43
Have i got something wrong here? i can totally see the potential of what you’re saying but for some reason it’s not showing in my figures, apologise for the long post!
Thanks again
Hi Liam,
Yes, you would have to pay VAT on purchases and imports but you wouldn’t charge VAT on end sales.
I won’t go into details on your calculations but VAT on fees doesn’t change it – being VAT registered you will still pocket LESS money compared to a non-registered VAT seller.
Only time when it is valuable to register for VAT voluntary is:
1) IF you sell 5% or 0% VAT rated goods (like some children product groups). Then you can claim back VAT on expenses but won’t have to charge VAT on end sales;
2) IF you heavily invest in early days of business – buy equipment for example and spend MORE in VAT than you get back in sales.
If none of these scenarios apply to you, don’t waste your time on these calculations 🙂
Thanks,
Andrew
Hi Andrew,
I am looking to make my first order on some branded small toys from either the US or China, however I am now a bit concerned about them been fake. Are all branded items fake on Alibaba?
And from your other comments, for my first order of around US$500, I would not need to register for VAT or even an EORI number to begin with?
Are there any other things I would need such as certificate of origin etc?
Thanks Phil
Hi Phil,
Thanks for your comment.
Yes, all “western” brand products on Alibaba and in general – China based websites, will be FAKE. Only real items you can find there are Chinese own brands.
No, you don’t have to register for VAT and most likely won’t need EORI number too for an order worth just $500.
As for other requirements – depends on the product you’re importing so you need to do some research on the topic, based on what you will be importing.
Thanks,
Andrew
Hi Andrew
Great article I’m very new to the concept of importing but would likly go down the air fright route at first untill I was in the position to purchase a higher number of goods.
I am thinking of the disabled elderly markets in disability scooter and electric wheel adjustable beds rise and recline chairs
Trolled hm customs to find codes to try to work out costs and can’t find what I’m wanting
Any advice ‘re this with on line eBay store and a storage unit/ shop
Hi Alex,
Thanks for your comment.
First of all, for such bulky items, you will have to use Sea freight and nothing else. Courier or Air freight will simply be too expensive.
As for the tariff codes, you can find them on your own using this page:
https://www.gov.uk/trade-tariff
Thanks,
Andrew
Hi Andrew,
Thank you for taking the time in posting such informative articles. This is the first place I’ve come to find detailed answers to many questions.
I have one question that I’m hoping you might answer for me…
I have recently been developing a dropshipping store through Shopify, using Oberlo and AliExpress as my main tools for stocking the store. The structure of the store is complete, I have my domain, logo, theme, pages, etc all complete and all that’s left to do now is to find reputable suppliers who can provide quality products which I can advertise. This is where I’ve hit a bit of a stumbling block…
I want to start as I mean to go on and do everything by the book so only want to stock products that meet all necessary regulations. My products will be children’s clothes, I am based in Ireland and I intend on shipping worldwide. Therefore I have to make sure the products adhere to regulations in the UK, EU, US, Canada, etc, etc. and for example, UK Regulations require that children’s clothes must adhere to the General Product Safety Regulations 2005, the Children’s Clothing (Hood Cords) Regulations 1976 and the Nightwear (Safety) Regulations 1985.
I’m aware that as the importer of the goods, if anything were to go wrong with any of the products, I am held liable. Therefore, I want to make sure that my suppliers and their products adhere to all necessary regulations. This is where my problem is. I have read that even if I ask a supplier to guarantee that their products meet all regulations, even if I ask for supporting paperwork, that could itself be fake and I am still liable.
Can you advise me what the best route forward from here is without having to spend weeks trawling through regulations, suppliers, paperwork, etc, as I really want to get my store open now that I’m at the final hurdle.
Any help and advice would be much appreciated and I’m sure would help others in similar situations.
Kind Regards
Fin
Hi Fin,
Thanks for your comment.
I’m afraid that starting a business in a niche like that WILL require you spending some good time on reading regulations etc. as children’s clothes is not an ordinary product and it does require very specific certifications in place for products to be safe to be sold in the UK/EU. And yes, it is correct – no matter what, YOU, as an importer will be liable for meeting these standards.
If you find large manufacturers in China who work for EU market, they will often have done testing already (ask for proof and validate through Testing Houses) but they also will ask for quite large MOQs. Alternative route is to do testing on your own (expensive) – you can find local testing houses and ask them for prices/quotes on such testing jobs. But it won’t be cheap, that’s for sure.
To sum it up – IF you’re on a small budget, this product/niche may not be the best one for you. Alternatively, you could consider buying goods from EU based manufacturers or importers (say in Poland?) that will have all the paper work in place.
Thanks,
Andrew
Thanks Andrew for the advice. I certainly didn’t make life easy for myself picking a niche like children’s clothes as my first stab at dropshipping! However, as I’ve already set up the store, bought the domain, came up with a name and designed the logo, and as I’ve also done quite a lot of research already into the various UK, EU and US regulations, I think that I’m going to run the course with this one as I might as well use it as a stern test of the whole system. I’m not one for always looking for the easy option. I prefer it when I take a tough route and make it easier. More satisfying!
However, you have made a very good point which I had considered about using EU based manufacturers instead, but every manufacturer/supplier on Oberlo Supply seems to be from China. Can you recommend a good tool/method for locating EU suppliers for my Shopify store who would be signed up for dropshipping? I can’t seem to find any.
Hi Andrew,
Such an informative website especially for newbies. Can i ask a question…
I have set up an order in China for 200 dollars worth of shoes to be sent to the UK via UPS. I am not a registered business though, will this affect my shipment? Will i be able to receive it?
Hi Mark,
You don’t have to be a registered business to import products from China, so that’s not a problem.
As long as you haven’t ordered anything illegal (like copies/fake shoes), you should receive your goods, yes.
Andrew
Hi Andrew,
I can’t tell you how much you made our lives easier seriously I watched some youtube videos they all are after money and subscription which is kinda buisness for them but i am lucky enough to find you or your site 🙂
my question is all these shipping methods can apply to USA amazon FBA as well?
second i am a full time a young mother do you think i can make some profit of this business idea?
kind regards
OGAI
Yes, same principles will basically apply to the USA too, including importing for an Amazon business (there are some specifics though so check out my Amazon related posts on this).
ANYONE can make profit with importing as long as they educate themselves on how this all works, put solid effort into product research and other steps of the process.
Andrew
Hi Andrew,
This is a very helpful article and I appreciate your great knowledge. I just received an order from Alibaba – a small 3.5 kg box with 200 pcs of metal key rings. The invoice attached to the parcel is for 200 pcs x $0.075 = $15 what was probably reported to TNT, but I really paid by card $292 including shipping, and after my complain I received the invoice for this amount, 200 x $1.46 = $292. What should I do now ?? I should wait for information from TNT or report a correct invoice and pay VAT and duty ?? Also, I’m not Vat payer. Where can I find step-by-step instruction how to pay VAT and import duty ??
If you find Andrew few minutes to answer my question I will be very thankful.
Bart
Hi Bart,
You need to contact TNT about this situation and ask them to redo the clearance process and charge accurate import duty & VAT.
More on this here:
https://andrewminalto.com/shipment-without-customs/
Thanks,
Andrew
Hi I have a few mats I have designed. They are training aids for adults and children and are to be much like yoga mats and/or interlocking jigsaw type printed foam mats. Though not overly weighty they will either be rolled up or in clear plastic packaging . I am thinking of an initial order of maybe 500.(guessing quite a few pallets worth?) As a complete novice to importing what would you recommend as my most sensible option? Hopefully the mats will sell and I repeat order but at what point would it become a must to use sea freight?…..anything else I should know?…..and thankyou for the most interesting article
Hi Suzy,
That kind of product can ONLY be shipped cost effectively using SEA freight and nothing else! And the more pallets you send at a time, the cheaper it gets. I would recommend making your order at least 3-4 pallets big, if not more.
And get in touch with a freight forwarder to organise shipping for you:
https://www.woodlandgroup.com
Thanks,
Andrew
Hi Andrew,
Your posts are so helpful, the HMRC website baffles me at times! I’m just starting out a baby and children’s clothing boutique online and have ordered £429 worth of stock from wholesalers in China on DHGate. This is from 4 separate sellers and the cost does not go over £126 per seller. Iv had a telephone appointment with HMRC business helpline today and have come away more confused than before. Do I need to register for an EORI number now? The orders are coming via China Mail, Epacket, Royal Mail and DHL. What do I need to do now? I spent less than £500 on purpose as that’s all I can afford to lose if things do go wrong. Iv found wholesalers who have already sold items to British retailers. Because I’m just starting I wasn’t too worried about the 4-6 week shipping. Any advice would be greatly appreciated. Thanks
Hi Sadie,
Thanks for your comment.
You don’t have to do anything right now, relax 🙂
As you have made orders and all of them will be sent via air mail, courier methods – you just have to wait until packages arrive in the UK.
IF there will be any taxes to pay, courier company or Royal Mail will inform you about them. And no, you don’t need an EORI number for such low value shipments.
Hope this helps!
Thanks,
Andrew
Hi Andrew, thanks for the useful information here, I wanted to ask a follow on question as I’m in a similar position.
I’ve found a niche to sell and have ordered from aliexpress around £500 worth of goods. Currently I am in the process of registering as self employed
Do I need to wait until I’m registered before selling anything?
Am I right in saying that I don’t need to declare anything with regards to the imported goods (I don’t expect to make over 85,000)?
Hi Evan,
Thanks for stopping by!
No, you don’t need to wait until you’re registered, you can start selling now. Just make sure you keep all the invoices and sales documents.
No, there are no special declarations you need to make – just the standard Customs clearance procedure which will most likely be taken care of by the courier company.
Good luck with the new business venture & All the best in 2019! 🙂
Thanks,
Andrew
Hi andrew,
I recently purchased fujifilm Instax film for polaroid camera from hongkong to resell them in UK which was shipped through dhl and I paid import and custom tax. The fujifilm UK has contacted me asking me to take my advert down from eBay because it’s unlawful to sell fujifilm instax film imported from outside EU to sell in UK. I am confused because I carried out my research before I made the purchase from Hongkong. Btw the above Information is extremely helpful.
Thanks
Hi Oshin,
If Fujifilm takes part of eBay’s VERO program, they have full rights to take your listings/products down.
Those are the rights of brand owners, not much you can do about that.
Andrew
Hi Andrew
Thanks for all the information you have provided. I am thinking of buying some jewellery items from China worth £250. And the weight is around 6 kg. it will be through courier service like DHL. As I am new to all this, can you please advise on how much should that cost and how much VAT and import duty do I have to pay and when do I pay.
Hi Mab,
Thanks for your comment.
Shipping costs – these you need to ask your supplier – ask them to get a courier shipping quote for your order. It’s not worth finding your own shipping as suppliers in China get much better rates than we do.
As for the import duty and VAT – approximately it will be 25% to 30% of your order value, so £60 to £75 or so.
DHL will inform you about these payments – either prior delivering the package to you or afterwards. You will just need to pay the invoice they provide.
Hope this helps!
Thanks,
Andrew
Thank yo u for your reply. One more query please. If my goods are less than £150 do I still need to pay duty on it. I just want to experiment with little stuff and minimum costs.
Will appreciate your advice.
Thanks
Hi Mab,
Here’s a post that goes into detail on values/thresholds:
https://andrewminalto.com/import-duty-vat-threshold/
Thanks,
Andrew
Thank you for your reply.
Hi Andrew
Just came across this site (interesting).
I am looking to import from china some solar thermal tubes and tank ( Solar Thermal) do you have any ideas of the customs required codes for importing such products in to the UK. I m having trouble locating them, also what the approx likely cost of importing would be.
Alan Dale
Hi Alan,
You need to find these products in the tariff code list:
https://www.gov.uk/trade-tariff
There you will find the import duty too.
Andrew
hi andrew im looking to import 10 mini motor bikes from china. i have all prices etc which im happy with but being told i need a import license is this true as i have never heard of this before. if it is true how can i go about getting one thanks
Hi Jack,
Who told you about that? That you need an import licence?
Haven’t heard of it in the context of importing goods to the EU – as in general there are no such importing licences unless specific products are involved like high risk chemicals or similar.
Andrew
Hi, im planning to import 300 hair bows from China (USD15 total) It will be a small box I guess. So curier will be the Best option, right?
Do I have to pay vat and import duty?
Thanks!
Hi Cibele,
Thanks for stopping by!
Yes, for such small order courier will be best method. If you don’t need fast delivery, you could even use Chinese Mail but it is very slow, 4 weeks and doesn’t have tracking.
No, you won’t have to pay any import duty or VAT on such small order.
Thanks,
Andrew
Dear Andrew,
Thank you for all the information that you have posted here. It’s really helpful. I am looking into importing children cartoons DVDs for purposes as a reseller. Will there be a customs duty or import vat on the items? I understand that children picture books are exempt from taxes and was wondering whether the same apply to DVDs of children’s cartoons.
Thank you,
Julie
Hi Julie,
Which country you’re planning to import these DVDs from?
Let me know.
Thanks,
Andrew
Hi Andrew,
It will be from Malaysia and China. Thanks.
Don’t do it!!!!
Those are fakes/copies and illegal to sell.
You can’t get genuine DVDs from countries like China.
What about Malaysia? It’s purchased from a trusted distributer. Do you know what are the taxes and duties for children’s cartoons please? Or is there no distinction? Thanks.
Same thing, they are all copies/fakes and illegal to import and re-sell.
Thank you so much for this overview.
I am thinking about importing and you have given me lots to think about.
Especially Woodland Global, EORI, VAT and Import Duty.
You ROCK!!
You’re welcome Samantha! 🙂
Hi Andrew
My supplier in China has quoted me FOB for the port in China. Does that mean I have to hire a forwarder in China to bring the order to the Amazon fulfilment centre?
Many thanks.
Hi Irene,
Yes, you will need to hire a freight forwarder for shipping, customs clearance process but it doesn’t have to be a Chines company.
You can use UK freight forwarder like:
https://www.woodlandgroup.com
Thanks,
Andrew
Hi Andrew. Loving your posts and advice – thank you. I wonder if you could clear something up for me? I import womens clothing from China. I have had 3 shipments so far. On the 2nd shipment the supplier offered me a cheaper, faster shipment than previous so I took it. My shipment arrived but then I received a bill from customs. I then understood why 1st shipment had been more expensive.
I paid it and obtained an EORI number. (I’m not VAT reg’ as below threshold). Third shipment is on its way atm and i’ve gone for more expensive, slower delivery through UPS, door-to-door which includes in the words of my supplier ‘all duties and taxes’. My problem is is that I want to be sure that i’m paying everything I need to legally. I receive minimal documents with my shipments and my supplier struggles to give me info outside of product info’ . I’m pretty sure i’m paying import duty at correct rate but i’m concerned about whether the 20% VAT is being paid.
Is this normally paid via customs at the same time as import duty is paid?
For example, for this third shipment of 55kg I have paid a total of 399USD, but my supplier is unable to give me a breakdown of costs.
If i’m not hearing from customs as I did for 2nd shipment then I do hope this covers all costs I need to be legal. Thanks in advance
Hi Lisa,
You don’t pay VAT or import duty to supplier – they can’t clear customs for you.
Goods must be declared to Customs when they reach UK and then you pay VAT and import duty.
I really don’t know what supplier has talked you into but most likely they just under-declare goods and they slip through customs without you getting charged with anything.
Andrew
re last post I should note that the 399USD is delivery only, not including my products cost.
Hi Andrew,
Really useful post thank you. I do have a question however, I am looking to do my first import. The items aren’t large and will probably total about 20kg however the quote from the supplier for door to door courier is high. When looking on the courier website I could arrange this for half that.
My question is can I arrange for DHL or FedEx to collect the item and courier across from China to the UK?
Many thanks,
Victoria
Hi Victoria,
Thanks for your comment.
Well, usually it is the opposite – UK prices are higher.
BUT if in your case you can get cheaper price on your own, yes, you can do that – arrange courier to pick-up the shipment from supplier.
Just contact the courier company and ask them for details on how you can arrange it.
Thanks,
Andrew
I’m about to order 100 items that weigh 200g each so around 20kg in total. The supplier sent me a quote saying that he charges £300 for the whole order including shipping. The item was supposed to be $3 (£2.10) so it would be £210 for the item and only £90 shipping. He said he will send it with FedEx and he said will take 8-10 days with a tracking number. Is this too good to be true?
Hi Leon,
It is a VERY good price for a courier shipment, yes….
Too good to be true? Hard to say, hard to say…
If the product is very small, maybe they have very good rates etc.
pay with PayPal to be safe and £300 is not that a lot of money to risk with – make sure you do as many supplier checks as you can and see how it goes!
Andrew
Thanks for the reply,
The item is a deck of 56 cards. The supplier was a 4yrs Gold member who had gone through the supplier assessment and also offers trade assurance. His company name and address have both verified. I went for it and paid through paypal but I’m still anxious because this seems like too good of a deal, the item only being $3 to begin with is already a huge bargain.
If it’s a dec of cards, the shipping fee is ok, as item is very small.
I just hope those cards – it’s not any kind of branded game?
As if it is – it will be FAKE/COPY!
Stuff like Cards against Humanity etc. – you can’t buy these from China, they will be fakes.
Andrew
The cards are inspired by party games like cards against humanity however they aren’t a direct knockoff of any of the existing games. They seem to sell a lot of eBay due them them being a fraction of the price of the more popular games.
I would seriously investigate whatever they don’t breach any IP rights – use well known logos etc.
As that would instantly make them illegal to import and sell.
Andrew
Hi Andrew,
I have just setup a new LTD company and will be shipping goods from Alibaba China to the UK. The shipments will be light weight small items around 1 to 2 kg per shipment. I have done a test order for $350 and my items arrived with TNT courier fine after 5 days. What I would like to know is should I have been charged import duties as I was not charged any extra.
Will this cause any problems with my tax returns if I’m not charged on my imports? Should I be declaring any imports from my side or should it all be done by the supplier?
Thanks for your help in advance.
Steve
Hi Steve,
Thanks for your comment.
Yes, you should have been charged import duty & VAT on that order worth $350.
Most likely supplier put lower value on customs declaration. Please check this post for more information:
https://andrewminalto.com/shipment-without-customs/
Thanks,
Andrew
Hi Andrew, thanks for your help, one other thing I would like to know is say my products cost a total of $250 and shipping courier is $100 would/should I pay import duty on $350 or $250 for the cost of the products only? I hope that makes sense.
Thanks again.
Hi Steve,
Import duty is paid on product’s cost, so in your case – on $250.
VAT is calculated on: Good Cost ($250) + Shipping ($100) + Import Duty
Hope this helps! 🙂
Thanks,
Andrew
HI Andrew great article, I am shipping goods in to the UK through air courier door to door.
Do I still need an EORI number and will my goods be ceased if I do not get one in time?
Thanks
Hi Leo,
Thanks for your comment.
Lol, no – your goods won’t be ceased if you don’t have an EORI number! If it will be needed, courier company will simply inform you that they need it.
It depends really on the value of the shipment – if it’s small, less than few hundred pounds, you won’t need EORI number.
But in any case – it’s free and easy to register for EORI online, so I would recommend you register for it anyways, just in case.
Thanks,
Andrew
Hi Andrew, I have started a business in beauty and am purchasing items from Alibaba.com. The companies are genuine and I have requested branded products (named my business). I speak to the suppliers via WhatsApp and they keep me up to date with the orders. Now I am in the process of importing my items to uk, one of the suppliers has advised me to get an eori number as one of my items is too heavy to be transferred by air freight and will be cheaper via sea freight. Is this true? The cost they are giving me is 564 usdfor delivery via tnt. The order is a total of 106kg made up of 5 cartons each around 36 kg. Will my customs charge be very high? And also which is best method to get my items to uk? I also have another order with a total shipping charge of 400usd. I
Do not want to be paying an extortionate amount of money on shipping as I want to make profit. Could you please advise me? Thanks. Mahera
Hi Mahera,
Yes, you’ll need an EORI number for sea freight shipments. (it’s free to get and easy to register for online).
Best method to get your items to the UK is by using a freight forwarding company. Contact WG about this service:
https://www.woodlandgroup.com
Customs – import duty & VAT depend on shipments VALUE and not what shipping method you use.
Thanks,
Andrew
On air freight is that £2-£3:with tax?
I put a order of 30kg to woodland trying to charge me. £396
On air freight
Hi Matthew,
30 kg is way too small shipment to use air freight for, at least cost effectively.
A 30 kg parcel should be shipped via courier.
Air freight is usually used with shipments that weight at least 100 kg. BUT it also depends on the size of the shipment and goods value. In general air freight is used to send more valuable goods as it is still more expensive than sea freight.
Thanks,
Andrew
Hi Andrew,
Your post was really helpful, thank you.
I am planning to import small order from Russia to the UK,for about £700-£900 and to sell it in the UK through eBay or other online platforms.
My following questions are:
1. Can I import famous brand clothing&shoes from Russia,if yes, what type of documents I will need to provide, the point is that those goods are very good copies from China,not original brands.
2. Do I need to register the company in the UK, or I can do it as an individual?
Thanks.
Of course you CAN’T do it!!!
It’s against law to sell copies of branded goods.
Don’t do it.
Andrew
Hi Andrew,
I am currently taking with a supplier on Alibaba and was wondering about shipping. The supplier has suggested that for over 100kg he would send via railway ? He said it would take between 20-30 days and would be delivered to my door no customs clearance needed ? Can you give me any advice as I have never imported before.
Hi Steve,
Yeah, suppliers will tell you everything and then when goods arrive you get stuck with a massive bill.
You should use a freight forwarder to ship goods from supplier to your door – they will also give you final quote, including all the fees, custom clearance etc. Contact this company for more information:
https://www.woodlandgroup.com
Thanks,
Andrew
Hi Andrew,
some great information here; much easier than the ‘official’ sites that just aim to confuse!
I have been trading for quite a long time, and am vat registered. I am considering placing a small order with a Chinese company for wood slabs (for use as table tops, etc.) I want to begin with a very small order of around £700 as a trial for the product and service. The Chinese company has quoted CNF prices, but I note from your comments that this is an expensive way of shipping goods when such a low order value is involved, (the goods will be quite large and heavy). Is it possible to handle the customs clearance, etc. ourselves when the goods arrive at UK port, as we can collect using our own vehicle, or is this just too complicated and should be left to the experts? Obviously I am trying to make the process as cheap as possible, but have no experience with this.
Regards,
John C
Hi John,
Thanks for your comment.
I would recommend you keep things simple and let freight forwarder handle all that for you.
You’ll pay less at the end and save yourself from lots of problems, trust me.
So get a FOB price from supplier and contact freight forwarder (like Woodland Global) for a “Door to Door” quote.
Thanks,
Andrew
This is a great bit of content.
Really helped me out!
cheers
You’re welcome Scott!
Hi Andrew,
With Door2Door shipping through UPS for example, are the VAT & Duty charges included in the price, or will I receive an invoice once delivered?
Goods are being sent from A supplier in China to me in the UK.
Kind Regards
Zavier
Hi Zavier,
VAT & import duty is never included in shipping quotes/fees.
Those will be separate costs you’ll pay when goods arrive in the UK.
Thanks,
Andrew
Hello Andrew,
I am importing video wall panels from China. The manufacturer is on Global Sources, and looks totally legit. According to Global Sources the company is 25 years old, dues $250mil USD per year and has 3 factories. Google searches seem to confirm all this as well. I am still leery of just wiring a $30K deposit into the ether. If there is no real recourse, I will. My plan is to send my partner to view the cabinets in the final phase of production when they are “burning in”. When should I be expected to pay the final $70K? Is there a way to make that happen when the product is safely received by a 3rd party like the shipper?
Hi Dale,
Thanks for your comment.
If such large sums of money are involved, you want to first get factory inspection done:
https://andrewminalto.com/china-factory-inspection/
It will only cost you $100 and will make you feel much safer dealing with them.
Then, you can do another – pre-shipment inspection before you pay 2nd half of the money:
https://andrewminalto.com/pre-shipment-inspection/
And you can even hire an inspector to be at the factory of the day of dispatch so you know 100% that your goods are handled over to freight forwarder.
Hope this helps!
Thanks,
Andrew
Hi Andrew
I’m also ordering from China for the first time, everything was fine until I asked for the quote and I noticed that the estimate for the delivery cost was way too expensive.
So for 60 items , each item weighing 390g they said the delivery (tnt)would cost $290.
Is that right? That’s 5 dollars for each item to be shipped.
Seems odd to me
Your blogs very helpful for first time buyers.
Thank you
Faatma
Hi Faatma,
That price sounds reasonable to me.
The problem is the size of your order – it is too small to expect cheap shipping costs. You would have to buy more to get lower cost per item via courier shipping. But even then, 390g items should be shipped via sea freight to get “normal” shipping costs. So you would want to order at least one pallet full of goods or more, use a freight forwarder and sea freight and then you’ll get very low shipping cost per item.
If you can’t afford making that bigger order now, simply accept the more expensive courier bill.
Andrew
hi lm just ordering first time from Ali express and asking for a sample they ha e asked me which method l want to use for shipping and have said l can choose ems or DHL but there’s quite a bit of price difference between the shipping which is the best one to choose .
Just go with the cheapest one which will most likely be EMS, right?
It is slower than DHL but you should still receive the package within 5-7 business days.
Andrew
Woodland Global website is not available anymore and i contact them last year for a small order value of £700 and they replied they don’t deal with small orders
£700 order is really too small to be shipped via sea freight…
Hie Andrew thanks for the information above. I want to purchase handbags from a supplier in China but I want to get 1 sample first. I’m in Zimbabwe and I want to use DHL kindly tell me how I can find out all costs I should pay for the goods to get here.the handbags are less than 5kg
You need to ask your supplier to arrange shipping and invoice you for shipping costs.
Then you will see exactly how much it will cost.
Thanks,
Andrew
Hi Andrew,
Really like your content. Very helpful and informative.
However, I think I’m very confused about VAT and I was hoping you could clear things up for me.
I’m in the process of my first order with a value of around £2000. I’m using a freight forwarder and sea freight to keep things simple and not too expensive. I am not VAT registered and I’m not sure if I should voluntarily register.
I see you clearly say it’s best not to, but why?
My understanding is that if I am not VAT registered I will have to shell out a hefty sum for VAT when the goods arrive. However, if I voluntarily register, I would be able to claim that lost money back.
To me that seems massively beneficial.
Am I missing something?
I hope you can help. Thanks
Hi Simon,
Thanks for your comment.
Yes, you’r indeed missing something – when you register for VAT, you’ll start to charge VAT on selling prices too! This basically means that you have to increase your prices or reduce your profit margin. In either way, it is a dis-advantage and I talk more about it here:
http://andrewminalto.com/ebay-tax-mistake/
http://andrewminalto.com/vat-registration-ebay/
Thanks,
Andrew