You may have heard about DDU Shipping Services to Singapore or other countries. Everyone who works in eCommerce has a lot on their plate. They must ensure that they are only providing the best to their customers, from developing high-quality products to designing a compelling unboxing experience.
What Is DDP?
It stands for Delivery Duty Paid; DDP refers to a shipping method in which the seller bears all costs. In other words, before we ship the parcel, we pay the whole delivery duty already.
All packages shipped by parcel companies are Delivered Duty Unpaid (DDU). This method of shipment makes it much easier for the sender because each country we ship to has different rules. These rules are about what requires customs duty and how much it costs.
It is, therefore, critical to correctly declare the value of your items and provide the correct contact information for the recipient. This information includes a phone number and an email address. You should provide this information to us on the customs form during the booking process. Then get this printed and attached to the outside of your box.
Among the DDP fees that the seller will pay are:
- Taxes on sales of goods on transportation (e.g., Value-Added Tax or VAT; Goods and Services Tax or GST)
- Fees for customs clearance and customs declarations
- Costs of import
- Expense management
- Local delivery
In essence, the seller accepts responsibility for getting parcels through customs and onto the customer’s doorstep. If we sort everything out at customs right away, then you can ship the imported goods for distribution or fulfillment immediately.
Customers don’t have to worry about anything other than being available to sign for or accept the parcel delivery. Also, they don’t have to take any risks.
What Is DDU?
DDU stands for Delivered Duty Unpaid. This abbreviation means that two parties will pay corresponding fees. The seller only covers the packaging and shipping costs to the destination country. Customs clearance fees and other importation risks become the buyer’s responsibility, and that’s the ‘unpaid’ part of the equation.
People should note that DDU is not an official Incoterm. In terms of specifics, the term used in international shipping is Delivered-at-Place (DAP). However, people widely use DDU.
The buyer has to bear the following costs:
- Importation licenses
- Taxation, duties, and inspection fees
- Customs brokerage fees may apply
- Fees for transporting parcels from customs to the buyer’s delivery address
In the DDU shipping method, when your package arrives in its destination country, customs will contact the receiver. He has to pay any customs duty owed before he gets the package. If customs are unable to contact the recipient, the package may be returned or delayed. That is why they ask for the most accurate contact information. DDP means that the sender accepts full responsibility and costs for transporting the goods.
Is VAT Included in DDP Shipping?
Unless the sender specifies it, DDP shipping requires the sender to pay any applicable VAT. Online merchants considering DDP Incoterms should always confirm any VAT requirements. Before selling their items online, fully calculate their impact on shipping costs and profit margin.
Is Customs Clearance Included In DDP?
DDP Incoterms, like VAT, requires the sender to pay for customs clearance. Again, the sender should always conduct extensive research ahead of time. Moreover, he should consider the additional cost of customs clearance and its impact on their overall shipping costs and profit.
Sending packages to DDU may appear to be less expensive at checkout because there is no processing fee on top of the duty that for the payment. However, it is the seller’s responsibility to inform the customer that duties will be levied when the shipment arrives at customs.
Which Shipment Method Is Better?
In DDU, the customers are frequently unaware that they have to pay duty. When they get that call from customs demanding payment, it’s often an unpleasant surprise. This may have a negative impact on your customer experience. Customs will forward the package to an independent customs broker to collect these duties.
Brokerage, storage, and late payment fees may apply at this point, making it very expensive. Because each broker is independent and charges a different fee structure, it is impossible to predict the customer’s final amount.
DDP shipments are slightly more expensive upfront because express couriers will pay customs on your behalf for an additional fee. Nonetheless, it has a fixed fee and can be three to four times less expensive than DDU brokerage fees. Some companies may also charge “disbursement fees,” which are a percentage of the duty they will advance on your behalf.
By paying these additional fees to your courier in advance, you ensure the delivery of your shipment will clear customs. At the same time, the customs will not have to contact your customer directly to collect additional fees. Evereast logistics is the best place to get affordable logistic services throughout the world.