should we include customs and duty rates upfront in the transaction or leave it to those to be levied at the local level? We don’t want to put the customer off with these charges , nor want to make packages get held up at the borders. What the best thing to do?
There are two things to consider for you. One is that you should always tell your customers how much they are going to pay in the end. The other is to protect yourself from having to pay duty fines for not correctly declaring the contents of the packages you are sending to destinations outside the EU. This is includes Switzerland and Sweden as they are not part of the EU.
Not communicating shipping/duty cost early on in the process is one of the biggest drop off factors in online shopping.
For international customers it is important to see the price Ex-Vat but at the same time what the shipping cost will be and, as mentioned earlier, how much import duty will have to be paid. You can technically only calculate this once the delivery address is entered, but you could offer a little tool that “estimates” this.
Tell them what method of duty billing you will be using and how much they can expect these additional charges to be. Nothing could be worse than receiving an eagerly awaited package only to be grated by an unexpected bill for duty.
Finally, you should state very clearly how you will be handling returns from overseas customers. Just as they had to pay import duty for having goods delivered, you will need to pay import duty for goods sent back to you. You can either swallow these or pass this on to the customer. Either through making them pay for this upfront or deducting the amount of the refund.
The technically difficult part is how to actually calculate these things. Fortunately the big shipping companies, UPS, DHL, FedEx etc. offer tools for merchants that help doing this. All of these companies offer APIs with which you can calculate duty based on price, country of origin, shipping country etc. Most of them offer as well to take care of collecting and declaring duties that need to be paid and they can charge the receiver on delivery.
You should always opt for an integrated solution that offers you to print shipping labels as well. Again, the bigger companies offer software that will help you create the correct labels. Not only will this lower the cost and time spent when the delivery guy picks up today’s load, it will help you avoid unnecessary trouble at the border as well.