This one example illustrates the advantage of CAPLINQ’s order fulfillment service and how it saves you money on custom clearance

We recent­ly received an email from a poten­tial cus­tomer inquir­ing about the Fis­cal Rep­re­sen­ta­tion ser­vice as part of the inbound ship­ping ser­vice CAPLINQ offers for order ful­fill­ment. The ques­tion was so typ­i­cal of many of the requests we get that it made sense for me to post both the ques­tion and our reply here. Hope this helps oth­ers as well that are con­tem­plat­ing CAPLIN­Q’s order ful­fill­ment service.

“I’d like to run some num­bers to com­pare CAPLIN­Q’s order ful­fill­ment inbound ship­ping ser­vice using the COGS (pro­duc­tion val­ue) com­pared to using a reg­u­lar freight for­ward­ing com­pa­ny such as DHL, FedEx or UPS. Exclud­ing the ship­ping cost itself for now, say we have prod­uct ABC123 with the fol­low­ing details:

• Har­mo­niza­tion code: 8473.30.0002
• List price (sales price): $200.00
• COGS (Cost of Goods Sold or pro­duc­tion val­ue): $100.00

Aside from CAPLIN­Q’s ware­hous­ing and ful­fill­ment fees, what would be the costs (tar­iffs, oth­er duties, and costs I may not be aware of) asso­ci­at­ed with import­ing using CAPLINQ? What would be the costs (tar­iffs, oth­er duties and costs I may not be aware of) asso­ci­at­ed with using sim­ply a freight for­ward­ing company?

Basi­cal­ly I’m try­ing to get a feel for total costs asso­ci­at­ed with import­ing at COGS vs not, so please also include any gov­ern­men­tal or oth­er tar­iffs and fees (out­side of stan­dard CAPLINQ ware­house and ful­fill­ment fees) that may be charged when an item leaves the ware­house as well.”

Thanks for this great ques­tion, as it is one we get quite fre­quent­ly. As a com­mer­cial enter­prise our­selves, we are also always look­ing at the most cost-effi­cient way to ser­vice our cus­tomers with­out sac­ri­fic­ing on quality

These is the cal­cu­la­tion used by most freight for­ward­ing companies:

• Duty is paid on the val­ue of the goods enter­ing Europe
• Freight for­ward­ing com­pa­nies always request the “com­mer­cial invoice” to deter­mine the val­ue (it’s the eas­i­est to ask)
• Typ­i­cal­ly the duty on most items com­ing into Europe is 6.5%
• If the list price is $200 then the duty rate typ­i­cal­ly paid (using a freight for­ward­ing com­pa­ny) would be $13 (6.5% of $200)
• On top of this, the freight for­warder typ­i­cal­ly charges an admin­is­tra­tion rate of 2–3% with a min­i­mum fixed admin­is­tra­tion fee of $25
• This brings the total to $238 ($200 + $13 + $25)

The awful part (as if this isn’t awful enough), is that the sup­pli­er (you) rarely ever see this. This bro­ker­age charge is billed to the end cus­tomer, who:

1. Nev­er expects this charge and
2. Is left with a bad “I feel cheat­ed” feel­ing afterwards
3. Blames you for it

Look­ing at the way CAPLINQ han­dles the sit­u­a­tion, it’s actu­al­ly quite dif­fer­ent, and you will rec­og­nize the mar­ket part­ner aspect as opposed to sim­ply a freight forwarder.

If CAPLINQ han­dles the import:

• The duty RATE would be the same 6.5%… BUT
• We import against the COGS of $100 instead of $200 so the duty is $6.50
• We charge no admin­is­tra­tion fees ($0)
• So the total is $206.50 ($200 + $6.50)

Fur­ther­more, look­ing at what our sys­tem tells us about this par­tic­u­lar har­mo­niza­tion code, we have rea­son to believe we can even reduce the duty rate to 0%, but we would need to do some paper­work first with the cus­toms & duty office.

All of these ser­vices are includ­ed at no extra charge as part of our “Inbound Ship­ping Ser­vice”. This is includ­ed in our fis­cal rep­re­sen­ta­tion agreement.

I hope this exam­ple helps you. We are also work­ing on an Order Ful­fill­ment Cal­cu­la­tor that will be able to allow you to run many of these cal­cu­la­tions your­self. These are just a very close approx­i­ma­tion today, but we are able to pro­vide you an exact price if you pro­vide the fol­low­ing information:

1. Prod­uct Har­mo­niza­tion Code (or at least a prod­uct description)
2. The Gross Weight of the pack­aged product
3. The dimen­sions (Length, Width & Height) of the pack­aged product
4. The list price or sales price
5. The cost of goods sold (COGS) or pro­duc­tion val­ue. Even a ran­dom val­ue that can be used for exam­ple pur­pos­es is sufficient.

To learn more about CAPLIN­Q’s fis­cal rep­re­sen­ta­tion in Europe, vis­it us at www.caplinq.com. You can also con­tact us if you have any oth­er ques­tions regard­ing CAPLINQ’s Euro­pean Order Ful­fill­ment Ser­vice or to get a quote for your spe­cif­ic product.