Customs is always a difficult topic - especially when you have a thousand other things on your mind and you can hardly wait to finally conquer international e-commerce markets with your online shop. Nevertheless, first, take a look at the five points you should keep in mind to avoid expensive additional payments and fines in cross-border e-commerce and fulfillment.
You've made it through the initial phase, you're now a real expert when it comes to bureaucracy and authorities, your team knows what they're doing and people are excited about your product. In other words, your online shop is going through the roof and you can hardly wait to finally tackle all the new markets and expand to other countries you've been dreaming about for months? There's nothing wrong with that. Yet you have this subliminal feeling that you've forgotten something? There is still something that you urgently need to take care of before you can be sure of international success. The answer is - it's customs.
We notice that e-commerce start-ups have many things in mind. Customs is not one of those initial focuses. "Learning by mistakes, everyone falls on their face once in a while", some might say now. But why incur unnecessarily high additional payments and fines when you can do it right from the start? Start-ups should know these five points about customs.
Imagine you are delivering the first container of your products. It arrives in the destination country - and then gets stuck in customs for several weeks. The storage costs grow to threaten heights and you slap your hand over your head when you realize the reason for that: you were missing a single piece of information to make the process work smoothly. You probably didn't think about it because it might not have been relevant for national shipping (e.g. in Germany).
In e-commerce, if you want to get your goods through customs quickly, you have to find out in advance about the laws, prohibitions, licenses, and permits that the destination country requires. This applies to both exports and imports. The Market Access Database https://madb.europa.eu/madb/ gives you detailed insights into this.
You should also be aware that some products in your online shop may be subject to special regulations. Example: You supply components that could also be used for military purposes - also called "dual-use". You haven't taken a close look at your business partner (for example, through embargo or sanctions lists) - because business is business, and you are happy about your first customer abroad. After a few months, you are in big trouble. Why? You have delivered to a terrorist organization, and your components came in quite handy.
Of course, that's a rather drastic example. But you understand what we are getting at: Take a close look at where and to whom you are shipping - and which regulations are relevant for this country.
The customs tariff number is the key if you want to internationalize your online shop. Along with the description and origin of the goods, it is one of the basic master data that your delivery must contain. Many people think: "Oh, the customs tariff number, I'll just look it up in the database and that's that". Unfortunately, like so many things in life, this is not quite as simple as it seems at first glance: Databases such as the ECT Online (Electronic Customs Tariff) can often lead you to the wrong number... Does 0% or 12.8% customs duty applicable to your grain mixture? Are your decorations really still decorative, or do they not perhaps already pass as Christmas articles?
E-Commerce Companies should therefore seek advice from an expert on customs issues - or at least have the number checked again afterward. That brings us to the next point.
Can't you just ask your tax advisor if you need help with customs formalities? After all, you don't have a lot of money lying around that you can invest in experts here and there. You pay the tax advisor anyway, and he knows all about tax issues.
We strongly advise against this approach. Most tax advisors lack the special niche knowledge that is necessary for customs matters. Therefore, it is better to find a proven expert, as this is much cheaper than having to make additional payments due to missing or incorrect information. By the way: If you turn to a certified advisor, you can even have this advice subsidized by BAFA in German. There’s a chance that your country has something similar to offer.
Let's move on to customs clearance itself. Are there any special features in e-commerce? Sure, there are. For example, the matter of the parcel delivery provider. If you commission DHL and Co. with the processing, you authorize the service provider for each shipment - but the liability, for example for an incorrect customs tariff number, remains with you. Therefore, always provide explicit information on how the shipment is to be cleared through customs. This includes, for example, the customs tariff number, the customs value, and the correct customs procedure.
Learn more about the best parcel delivery companies:
When a certain number of monthly exports abroad are made, it can become exhausting to go through the entire customs process for each delivery - and it is also time-consuming. As an "approved exporter (simplified customs declaration (Art. 166 UCC)" you can speed up the process. For example, if the value of the goods exceeds 1000 euros, you must declare your export electronically to customs. You can do this using software with an ATLAS connection or by commissioning a service provider. If you are an approved exporter, you avoid various steps such as a presentation to customs and can send your delivery straight away.
In order to be approved for a simplified declaration by your competent main customs office, your e-commerce business must fulfill certain requirements - for example, solvency, certain security requirements, or sufficiently trained staff.
You've probably noticed by now that there are quite a few things that your online shop should consider when it comes to customs. We, therefore, advise you to inform yourself in detail in advance and, if in doubt, consult a customs advisor so that the customs inspection does not suddenly knock on your office door after a few years and hand you a five-figure fine notice.!
Grenzlotsen helps to simplify the cross-border movement of goods for traders and businesses. Launched in 2013, the young company has become a one-stop-shop for e-commerce businesses in recent years through digitalization and automation of processes as well as advice.
About the author
Grenzlotsen helps to simplify the cross-border movement of goods for traders and businesses. Launched in 2013, the young company has become a one-stop shop for e-commerce businesses in recent years through digitalisation and automation of processes as well as advice.