How savvy are you when it comes to international ecommerce?
Test your knowledge.
A note before you get started
Selling cross-border is a massive opportunity for retailers and brands to expand their footprint, but doing so presents unique challenges. It’s a complicated process that, for many, is uncharted territory. When selling cross-border is done correctly, retailers can reach new customers, take advantage of the ever-growing global economy, and reap the bottom-line benefits. This quiz will test your cross-border expertise and give you information you need to capitalize on the international market opportunity. Nothing in this quiz is intended to serve as legal advice and the information contained herein is meant for general informational purposes only.
Fast facts
Now, it’s time to take the quiz.
Global online retail sales reached $4.29 trillion in 2020.
That represents a 24.1% increase over 2019.
The number one challenge for retailers selling cross-border is shipments getting stuck in customs.
In a survey conducted by NAPCO Research, 45% of respondents said they are investing in or researching automated solutions for cross-border compliance.
In a study by UPS, 95% of buyers responded that they expect to see all shipping fees and taxes totaled before they’ll complete a purchase.
International shoppers have the same expectations as those buying domestically: They want a great customer experience. And retailers and brands must deliver.
From tariff codes to changes in duty rates, automating cross-border compliance can eliminate headaches while bringing big benefits to sellers.
Customers don’t like surprise fees. Failing to communicate customs duties and taxes can result in rejected shipments and poor reviews, which can negatively impact your bottom line.
Source
Question 1 of 5
A
Upon analysis, you notice your business is getting website traffic from two new countries — and you want to capitalize on the opportunity: How do you determine which markets to enter?
Go with the traffic flow and offer your entire product line in these two countries.
B
Embrace global growth and immediately start selling all of your products in every country.
D
Play it safe and avoid the complications of cross-border selling.
C
Research any limitations to selling your products before entering the global market.
Correct!
Every country has different requirements and restrictions, so it’s important to do your research first.
Did you know?
Importing chewing gum into Singapore is strictly prohibited. Ballpoint pens are not allowed to be imported into Nigeria. Don’t risk a customs hold, even if the demand is there.
Related reading
Guide: Turning browsers into buyers
This guide provides information on the most important regulatory issues retailers and brands must understand when selling to consumers around the world.
Get the guide
Not quite
Incorrect
While selling cross-border can be complicated, the increased sales can be incredibly rewarding. However, every country has different requirements and restrictions, so it’s important to do your research first.
question 2 of 5
You’re laying the groundwork for selling cross-border and it’s time to face the duties. To calculate duties, you must assign tariff codes prior to shipping: Who is responsible for classifying items and assigning tariff codes?
As the seller, I’m on the hook to figure it out.
That’s the carrier’s job.
It’s a joint effort between seller and carrier.
Customs officials do that.
You know your products best. Many carriers are more concerned with clearance than your margins and may not have enough information to correctly classify your products.
Determine the tariff code (8–12 digits) for each country your products are sold in.
Learn to code: Tariffs
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Harmonized System codes: What are they and what do ecommerce businesses need to know about them?
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That’s risky
It’s better to do it yourself. You know your products best. Many carriers are more concerned with clearance than your margins and may not have enough information to correctly classify your products.
Customs officials do not assign tariff codes, they use the codes provided on import documentation to determine the duty rate. It’s better to do it yourself. You know your products best. Many carriers are more concerned with clearance than your margins and may not have enough information to correctly classify your products.
question 3 of 5
Congrats, you received an international order! You want to be thorough so you begin the process of calculating landed cost. What does that involve?
Nothing for me. The buyer has to pay it so it’s their responsibility.
Adding up the order value, customs duties, and import taxes and fees.
Determining the shipping and insurance costs.
Figuring out the order value, customs duties, import taxes and fees, shipping, and insurance.
Landed cost is the total cost of getting a shipment from the seller in one country to a buyer in another.
While rules and rates can change, here’s a baseline method:
Navigating landed cost
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What online sellers need to know about landed cost
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• Check the recipient country’s de minimis duty threshold. If the value is below this number, no customs duties will be owed.
• If the de minimis threshold is exceeded, calculate the value of the goods, customs duties, import taxes and fees, and shipping and insurance.
Question 3 of 5
The seller should calculate and communicate costs to the customer so there aren’t any surprises upon delivery. Landed cost is the total cost of getting a shipment from the seller in one country to a buyer in another.
Landed cost is the total cost of getting a shipment from the seller in one country to a buyer in another. It also includes any shipping and insurance costs.
Landed cost is the total cost of getting a shipment from the seller in one country to a buyer in another. It also includes the order value, customs duties, and import taxes and fees.
question 4 of 5
To make sure you’re providing a good customer experience while still making a profit, you’ll also need to be familiar with compliance rules. Who’s responsible for paying duties and taxes?
Customs pays them.
Those fees are added to the customer’s shopping cart.
Just avoid those costs by marking the items as gifts or declaring a value below the country’s de minimis threshold.
Duties and taxes are included in the carrier’s shipping fees.
Pro tip: Shipping with USPS
The United States Postal Service doesn’t offer a DDP solution. If you’re using them as your carrier for cross-border shipments, your customers will need to pay duties and taxes separately, before they can receive the goods.
Infographic
Compare the customer experience when shipping DDP vs. DAP
See the difference
You can collect duties and taxes up front from your customer at the point of sale, or on delivery. Here’s the breakdown:
• DDP (Delivery Duty Paid): Display duty and tax in the shopping cart and collect fees from the customer up front so goods can clear customs without delay.
• DAP (Delivery At Place): Goods are held in customs until duties and taxes are paid by the customer. This approach may surprise buyers, resulting in rejected shipments, so it’s best to display information up front even if you aren’t collecting duties at the point of sale.
• Delivery Duty Paid (DDP): Display duty and tax in the shopping cart and collect fees from the customer up front so goods can clear customs without delay.
• Delivery at Place (DAP): Goods are held in customs until duties and taxes are paid by the customer.
Note: DAP may surprise buyers, resulting in rejected shipments, so many sellers find it’s best to display costs up front even if you aren’t collecting duties at the point of sale.
• Delivery at Place (DAP): Goods are held in customs until duties and taxes are paid by the customer. Note: DAP may surprise buyers, resulting in rejected shipments, so many sellers find it’s best to display costs up front even if you aren’t collecting duties at the point of sale.
Either the seller or the buyer is responsible for paying customs duties and import taxes. Here’s the breakdown:
• Delivery At Place(DAP): Goods are held in customs until duties and taxes are paid by the customer. Note: DAP may surprise buyers, resulting in rejected shipments, so many sellers find it’s best to display costs up front even if you aren’t collecting duties at the point of sale.
Incorrect (and illegal)
Misstating information is always a bad idea and can lead to penalties, fines, or worse. It’s your job to calculate duties accurately and communicate those charges to your customer. Here’s the breakdown:
question 5 of 5
Sales are closing, so everything’s good, right? What do you do to help ensure smooth cross-border sales?
As long as everything keeps going smoothly, no changes are needed.
Apply for a duties discount now that cross-border sales are booming.
Analyze tariff codes and use the lowest duty rate to save money.
Monitor trade agreements, tariff schedules, and duty rate changes.
From tariff wars to new legislation, change is inevitable; it’s important to stay informed so you aren’t over- or under-collecting and remitting customs duty and import taxes.
Monitor your cross-border customer satisfaction by keeping an eye on international sales, reviews, and rejected shipments.
Bonus: Create a positive customer experience
10 import tax and duty mistakes you can't afford to make
Unfortunately, customs doesn’t offer discounts. But from tariff wars to new legislation, change is inevitable; it’s important to stay informed so you aren’t over- or under-collecting and remitting customs duty and import taxes.
Changing the tariff code on a product for a more favorable duty rate is considered misclassification and tax evasion. The penalties are serious. Additionally, from tariff wars to new legislation, change is inevitable; it’s important to stay informed so you aren’t over- or under-collecting and remitting customs duty and import taxes.
Bonus: Create a powerhouse customer experience
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We totally get it, selling cross-border is tough — but it’s not impossible. Find out about selling to consumers around the world with our educational tools, articles, and research reports.
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If you’re ready to sell internationally, we can make things easier by automating your cross-border compliance.
You got 1/5
It’s time for a crash course in selling cross-border. Find out about selling to consumers around the world with our educational tools, articles, and research reports.
You got 2/5
You’re getting there, but there’s definitely more to know. Find out about selling to consumers around the world with our educational tools, articles, and research reports.
You got 3/5
It’s clear you’ve got some foundational knowledge. Find out more about selling to consumers around the world with our educational tools, articles, and research reports.
You got 4/5
Almost perfect. You’ve got some great cross-border knowledge. We can make things easier by automating your cross-border compliance.
Find out more about selling to consumers around the world with our educational tools, articles, and research reports.
You got 5/5!
You nailed it! It’s clear you know a thing or two about selling internationally. We can make things easier by automating your cross-border compliance.
You got 5/5