Shopify and Crossborderit now have an IOSS solution
December 16, 2022
Trade between countries of the world and the EU has relapsed since this year 2021. Retailers, most of the sales that have been made have been at a loss. The cost of doing business has increased by approximately 30% and, in many cases, VAT, customs and unexpected shipping costs have been passed directly to the end customer. A large proportion of companies have been forced to destroy stock in Europe due to the prohibitive cost of repatriating it back into the UK supply chain.
As a result, many companies have simply withdrawn from Europe; but the EU remains a key market and demand remains high.
UK-EU trade fell in the first three months of the year as Brexit and the Covid-19 crisis hit companies hard. One of the biggest problems was unexpected costs ended up affecting the end customer.
No company wants to surprise the customer with an unexpected tariff; but from tariffs, customs clearance, VAT, and administrative costs end up adding up. For small value goods, the additional cost to the end customer is unfeasible. While customers have generally been paying the additional cost, rather than refusing to accept the items they have ordered. The consequence of these "hidden" costs has not only decreased sales to the EU, but very few have generated any final profit.
Despite this, EU demand continues.
Transparency and clarity
The inability of companies to present customers with an accurate upfront price is a major problem, this is due to the confusion of VAT and the harmonized code. The management of EU de minimis VAT has been a challenge, as businesses require a unique VAT number in each EU trading country.
However the lack of clarity around harmonized commodity codes continues, and if a product's documentation does not include the correct description and/or commodity code, customs fees will be imposed, generating an unexpected and unwanted bill for the end consumer.
Crossborderit can take care of that without any problem
Fortunately for Shopify Merchants, Crossborderit CBIT is internalized with the app along with Shopify's tax and duty calculator allows merchants to calculate taxes at checkout, report shipments using their CBIT IOSS number and enter EU countries under the new "one-stop-shop" rules.
With easy onboarding and simple, flat shipping rates, it will be very easy to calculate duties, collect them and even pay them for you. Plus, CBIT offers simple DDP for these solutions for a great, hassle-free customer experience.