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Import duties and fees on Chinese product sold to US customers from Canada

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eTox

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Hi everyone,

I have this simple but interesting question that I can't find an answers to. I think many of us here who are just starting out importing products and selling to US will be interested in this question as well.

Given a fictional scenario:
Product is custom made in china for each customer. Valued at $50 as per invoice.
Product is imported to Canada and added additional items packaging.
Product is sold to US customer for $300.

Questions:
1) When importing the product from China to Canada through DHL or any other courier service I know that you have to pay import duties and taxes. What value should I state here? The $50 price that the supplier has invoiced me for? Also, are there any tips on doing this?

Each product has to go through Canada from China.

2) When selling to US customer and exporting from Canada to US through DHL or any other courier service will the customer have to pay duties and taxes again? Also what value should I state here? I am assuming the $300 that I am selling for.

3) In the case that I sell to customers outside of USA, Mexico, and Canada I am assuming the customer has pay import duties and taxes again? I am assuming the price that they will pay the import fees is from $300 sales price.

I am also interested in selling to people in other countries as well.

If anyone knows the answers please let me know. I want to get a clear picture of how this works.

If you have any tips on how to handle this also let me know.

Thanks!

I think @Walter Hay can have some, maybe @biophase and anyone who is importing to Canada as well.
 
Last edited:

Walter Hay

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Before giving a complete answer, we need to know how you will be selling the product, and what quantities do you plan on ordering.

I suggest you check out this thread:
Selling my product on Amazon.com from Canada

Some general observations might help you to begin with.
  • You will pay duty on the total cost of goods, which includes the price you paid the manufacturer plus freight and insurance. It is a big mistake to only declare the FOB cost. You must calculate your costs based on that formula.
  • Courier charges on small shipments can cost more than the purchase price of the goods.
  • Most duty rates in Canada are slightly higher than those in the US.
  • Most countries have what is called a De Minimis amount, which is the maximum value of goods that may be imported at any one time under Duty and/or Sales Tax exemption schemes. Canada is very stingy, allowing only CA$20 imports duty free, but the US allows $800. Mexico is Equivalent to US$300 for postal shipments. For other countries ask me. I list in my book the rate for all countries that participate.
  • Custom making of products in China can be costly for one-offs. There is also a high risk that your idea will be copied and on the market before you see one. It can be cheaper to have some forms of customizing done in Canada or the US. If you let me know privately what you have in mind I can advise you.
  • If you a re totally new to importing I suggest you quickly read through my AMA. Because it is so long, and things change over the years, maybe start reading from the more recent posts and work your way back.
Walter
 

eTox

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@Walter Hay , thank you. Before I bombard you with silly and naive questions, I am first going to read your book, go through the thread and then ask you the remaining questions.

Also, feel free to checkout my progress thread on the inside. I would love your thoughts on it. Maybe @biophase and others can pitch in as well if they have the time.

Thanks!
 

Walter Hay

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@Walter Hay , thank you. Before I bombard you with silly and naive questions, I am first going to read your book, go through the thread and then ask you the remaining questions.

Also, feel free to checkout my progress thread on the inside. I would love your thoughts on it. Maybe @biophase and others can pitch in as well if they have the time.

Thanks!
Don't think you can't ask questions because they seem too naive. Everyone has to learn and that is what this forum is about.

Ask away. I enjoy helping.

Walter
 

Walter Hay

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I should have added that if you have a question involving confidential information, send me a PM. Over the past 6 years I have helped many that way and none of their confidential info ever goes past my inbox.

Walter
 

eTox

Expect success, but prepare to fail.
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Read Millionaire Fastlane
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I should have added that if you have a question involving confidential information, send me a PM. Over the past 6 years I have helped many that way and none of their confidential info ever goes past my inbox.

Walter
Thank you Walter, I have sent you PM.
 

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