I live in the US, florida to be exact and We just got picked up by a distributor in Canada. We have it arranged that we will be shipping our orders directly to the retailers. The distributor would like us to pay shipping because they feel no retailer will bother ordering from us. If and when we do ship out orders to a retailer in Canada will the retailer be charged with an import tax even if we pay the shipping?
Im pretty sure they would have to pay something. Are your shirts made in the USA? If they are the retailer will have to pay the gst and a broker fee to release it from customs.
yea they are made in usa. i have been doing my research. i wouldnt want shops in Canada to be detered from ordering from us because of the gst and brokerage.
You have to look into it a bit more. It seems like they will have to. I am almost sure of it though. My buddy has to pay brokerage when he orders Hostility clothing from the USA for his fight shop because they don't have a distributor in Canada.
If the shirt blanks are made in the US or Canada then the retailer should not have to pay import duty. That's what NAFTA is all about. I ordered stock from a supplier in Canada in another business and I know he had to provide proof of origin on all components used to manufacture the product. The way it was explained to me by a US customs agent is that if any part of the product is manufactured outside of North America, I would have to pay customs fees. I had to have the proof or origin paperwork even if I was bringing product over the border in person. I also ordered inventory from Finland and DID have to pay customs fees.
There may still be brokerage fees, which is different than customs fees or import duties. The customs broker just streamlines the whole process of getting a shipment through customs. A broker is not absolutely necessary, but they can expedite the process. I've had non-brokered shipments held up in customs for weeks for no apparent reason.
We had a similar issue because we ship to Canada somewhat frequently. Our customers do typically pay shipping and the Canadian GST plus brokerage. Of course, with NAFTA forms, they do not have to pay duty fees. However, in one instance, a customer was really in a bind and her merchandise was stuck and she didn't have a way to pay the GST and brokerage. I called Fedex Trade Networks to see if we could pay the tax and brokerage for her, but it was not possible because we were not the importer of record and did not have a Canadian import ID. However, the Fedex Trade Networks lady did seem to indicate that there was a process for applying for an importer ID to become an importer of record, even though we are a US business. She said it wasn't a quick process. I can't verify that this info is correct (seems kinda odd) because we never actually applied to become an importer of record as it wasn't a solution for the situation we were in, but maybe it's something worth finding out about.
I just had some orders shipped from the USA to my business before xmas. It is the Brokerage fees that really adds up even if the items are manufactured in USA. The brokerage fee is based on the total value of the order and the min. fee is around $30. GST isn't a real issue because you can get that back through you GST remittance.
I also just ordered some medals and trophies for an upcoming Gymnastics meet at my daughter's club. The total order for $523US. UPS was the courier and I let them be the broker (I have a broker for my business and UPS and their rates are not much different). The payment to UPS when the shipment was delivered was $126.58 and the breakdown was as follows:
Duty (metals where made in China - rate was 0.065) $34.05
GST $27.40
Brokerage Fee $61.55
GST on brokerage fee $3.08
Hope this helps you in understanding what fees might be incurred. I remember the first time I ever ordered anything from the US more than 12 years ago. It was 2 packages of paper valued at about $15 US. By the time it was shipped here and then the UPS brokerage fee it was up over $60! I did not order anything from the US for many years.
Brokerage ripoff Re: do Retailers pay import customs tax from US?
Quote:
Originally Posted by susan
The brokerage fee is based on the total value of the order and the min. fee is around $30
Duty (metals where made in China - rate was 0.065) $34.05
GST $27.40
Brokerage Fee $61.55
GST on brokerage fee $3.08
The brokerage topic infuriates me, and I'll tell you why: Brokerage is pretty much a cash grab.
Let me make it very clear, the fees in question are entirely made up by particular companies solely because they choose to do so. The brokerage fee has nothing to do with the government. They have the receiver by the hook, and for many (myself included) they will vigorously try to stop all attempts to self-clear. (A very long story... in short, I tried to be polite and go by the book, but in the end, they eventually stopped making up reasons - because I would research what they said with the government and call them back - and flat out said no. They then coincidentally misplaced my package one day and failed to deliver the next... coincidentally).
So, the solution? Don't use those particular companies. Have your parcels sent via USPS (United States Postal Service). When delivered by Canada Post on this end, they will charge you a flat rate of $5 (sorry, I don't know if it's a different prices for businesses, but if they did, you could have it delivered at home?).
No, I'm not making this up. Let's recap:
Brokerage Fee $61.55 ---> $5.00
GST on brokerage fee $3.08 ---> Not sure if there even is GST on it, to be honest.
Total 64.63 - 5.00 = Class action (Google class action ups)
So yes, use USPS and if you can, join a class action if it's available for your province, if you're into that sort of thing.
Finally, if you are bored, there is a 750 post thread on ebay (here)... As you can expect, lots of angry people and very few people who think that the practice is perfectly fair and the rest of us should have known...
Oh, I've also been told sometimes Canada Post doesn't even bother with the $5 fee. Gotta like that.
Hope this helps someone,
...Donovan
PS: If you were unable to use USPS and needed your item quickly, the next day air rates with certain other companies actually include the brokerage fee, if I'm not mistaken. But of course, next day air is pretty pricey.
Last edited by Dono; February 10th, 2009 at 09:30 PM.
Reason: Decided to remove company names so as not to be violating any forum rules about company bashing (yes, reading the rules now)
Re: Brokerage ripoff Re: do Retailers pay import customs tax from US?
Quote:
Originally Posted by Dono
So, the solution? Don't use those particular companies. Have your parcels sent via USPS (United States Postal Service). When delivered by Canada Post on this end, they will charge you a flat rate of $5 (sorry, I don't know if it's a different prices for businesses, but if they did, you could have it delivered at home?).
No, I'm not making this up. Let's recap:
Brokerage Fee $61.55 ---> $5.00
GST on brokerage fee $3.08 ---> Not sure if there even is GST on it, to be honest.
Total 64.63 - 5.00 = Class action (Google class action ups)
So yes, use USPS and if you can, join a class action if it's available for your province, if you're into that sort of thing.
Hope this helps someone,
...Donovan
PS: If you were unable to use USPS and needed your item quickly, the next day air rates with certain other companies actually include the brokerage fee, if I'm not mistaken. But of course, next day air is pretty pricey.
Hi Donovan
You are correct that Canada Post does only charge $5.00 to clear the items (for both personal and business) and many times they don't even bother with the fee. But many companies will not ship USPS they want to use their preferred courier.
Also another issue is the time for delivery. The first year I ordered the metals for our gym club I did convince them to ship via USPS but it took 3 weeks for the package to it make it to customs, clear customs and then get delivered to me causing the medals to arrive after the meet. Also there was no way to check on the status of the package while at customs. This year the medals were shipped by courier on a Friday (from Kansas) and I had them in my store on Wed. UPS called to ask you I wanted to clear the package before they had even received it and they were able to give me the date of delivery.
So if time is a pressure then I would not use Canada Post to clear my items but if getting the package quickly is not an issue and the seller will ship by USPS then it is a much better deal.
Re: Brokerage ripoff Re: do Retailers pay import customs tax from US?
I understand your frustration with this. We have spoken to customers in your situation who are surprised about the brokerage fees. I know that Fedex allows you to choose a broker (and opt not to use their brokerage service while still using them as a shipping service), but I don't know if this allows you to bypass their brokerage fees or if this is more hassle than its worth.
Still... I recently had a Canadian customer purchase about $1400 worth of shirts. The USPS shipping quote for priority mail was over $500 and the shipping time was 6-10 days. The Fedex quote was about $200 for 2-day service. There was a $60 brokerage fee involved. So, if you add the $60 brokerage fee to the $200 shipping fee you get $260 dollars and the package was there in 2 days. This is a huge savings-- in time and money-- over the USPS $500+ shipping and 6-10 days.
If the customer had been willing to ship the package in 5 business days (which he wasn't, he had to have it in a rush), the shipping fee for Fedex would have been $80. So, if you compare the 2 services in times of delivery, Fedex was able to deliver in 5 business days for $80 plus a $60 brokerage fee. USPS was $500+ and a $5 brokerage fee.
Anyway, there are pros and cons to both ways of delivery-- the Fedex/UPS and USPS. I just wanted to show why we use FedEX and why it is often more cost effective for us and our customers. For smaller packages, USPS is often the way to go.
Good to hear other people's experiences. I know in my case, the company in question was pretty much the devil in disquise. I suspect it's because I was one person (not a business), so lkely if I had been receiving things as a business, they would be much more careful, less I choose to not do business with them in the future.
I just had some orders shipped from the USA to my business before xmas. It is the Brokerage fees that really adds up even if the items are manufactured in USA. The brokerage fee is based on the total value of the order and the min. fee is around $30. GST isn't a real issue because you can get that back through you GST remittance.
I also just ordered some medals and trophies for an upcoming Gymnastics meet at my daughter's club. The total order for $523US. UPS was the courier and I let them be the broker (I have a broker for my business and UPS and their rates are not much different). The payment to UPS when the shipment was delivered was $126.58 and the breakdown was as follows:
Duty (metals where made in China - rate was 0.065) $34.05
GST $27.40
Brokerage Fee $61.55
GST on brokerage fee $3.08
Hope this helps you in understanding what fees might be incurred. I remember the first time I ever ordered anything from the US more than 12 years ago. It was 2 packages of paper valued at about $15 US. By the time it was shipped here and then the UPS brokerage fee it was up over $60! I did not order anything from the US for many years.
Hi Susan,
I (like you) try to stay away from ordering from the U.S. because of the customs/broker fees.
I see you sell medals etc... you should check out www.faroproducts.com a canadian company I have been dealing with for 10 years. They make some of their products in Canada & some are made overseas for which there are no extra charges, only a bit longer to get them. There is also discounts once you reach a certain sales level. (They also do lapel pins, keychains, zipper pulls, belt buckles, + much more)
do Retailers pay import customs tax from US? 
Brokerage ripoff Re: do Retailers pay import customs tax from US? 
