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Taxes and Tariffs
I've had a few people asking about international taxes, customs, duties, tariffs, VAT, GST, etc. This is a huge complicated topic that people spend their entire careers working in.
The main question was "Why do you charge for the USA tariffs at checkout, but not VAT (or other countries charges)"
It all comes down to economies of scale and Cryptic Crafter still being a small business. And there's two main factors at play.
Firstly, the shipping company:
To ship internationally, we use Australia Post, our local government run postal service. They are essentially an "economy" shipper with no bells and whistles. So they have no ability to collect or charge international taxes whatsoever.
I also have a contract with them, so the more I ship, the cheaper it is. And I can pass those savings on to you all!
Lets have a quick look at what it would mean to migrate over to a courier that supports international taxes, eg DHL or FedEX.
Our full box sets in all their packaging weigh approximately 4kg each (8.8lbs)
It currently costs $71.80 per box sent to America. (with my discount)
Running the exact same box through DHL gives me: $341.90
And through FedEx is: $308.74
Absolutely bonkers!
I've gotten a bulk quote from these couriers before, but I'd need to ship every single order through them, and it'd still be $175+ per package! Still more than double the cost!
And that's before any taxes or duties are charged on top. So you can see why that's not even an option available on my website.
But that's only the first half of the issue.
Second, the collection of taxes:
Lets say I do go ahead with the more expensive couriers, I also need a way to calculate and collect taxes for each country automatically. Then pay them correctly to each relevant government body.
To do this there are third party plugins and solutions available, most of which will cost $1000 - $6000 per year. And are only eligible with the more expensive delivery options anyway. So that adds to my baseline costs and also drives up the price.
So why can I now charge for the USA tariffs?
Most countries have the option to collect all fees during customs, and charge them to the recipient with no issues.
But the USA is doing the opposite and requiring all other countries to deal with it on their own.
Obviously not wanting to lose the customers, Australia post has partnered with a third party provider, to allow the collection of tariffs.
I wish they'd partner with other providers and enable this for all countries. But I don't think it's on the priority list for Australia post at this stage.
If there's anyone out there who knows a different way to charge taxes, or if there's something obvious I'm missing please get in touch! I'd love to be able to offer this in the future. But at the moment adding an extra $230 in shipping costs for every customer isn't on the cards.
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