Transparent Taxes and Duties for Cross Border E-Commerce: Avoid Unpleasant Surprises

November 29, 2019

To succeed at international e-commerce, online merchants need to position themselves as global brands with a localized presence. That means demonstrating that you're in tune with each country's relevant taxes and duties on the products you sell. Accomplishing this requires your website to calculate accurate duties and taxes for purchases in each market. This also means adjusting how these fees are displayed, such as listing them on the product page, in the shopping cart, or in the checkout flow and A/B testing which display configuration increases conversion in each market. Skip these two crucial steps, and you will see your best-laid market entry plans hit a major speed bump.

Flow's Global Research Report shows that uncertainty on the consumer's part about any unforeseen taxes and duties is a barrier to making a cross border e-commerce purchase. In most global markets, consumers overwhelmingly prefer to have any applicable taxes and duties listed on the website with the option to pay them at checkout, rather than on delivery. One of the few exceptions was India, where consumers prefer to remit duties upon arrival of the order.

How do cross-border shoppers in the top 11 global markets prefer to remit taxes and duties?

Remitting taxes in top markets

Source: Flow Cross Border E-commerce Trends Global Report

At best, unexpected charges upon delivery will cause an unpleasant surprise, to which your consumer may respond by paying the taxes and remembering to be prepared the next time they purchase from you. It's more likely that this purchase will be their last -- or, worst-case scenario, the customer refuses delivery and requests a refund. It's also important to note that brands and retailers can be unaware of certain shipping charges, especially when selling cross-border. There are various situations where shipping carriers add fees and surcharges on international deliveries which can result in additional costs that the end consumer and the online retailer might not have expected. This can create a significant amount of friction for the shopper and can keep them from shopping again with the brand. Your international customers shouldn't have to jump through hoops to place an order on your website -- nor should they be ambushed by one final hoop when their items arrive at their doorstep.

To ensure that your localized e-commerce website offers real-time, transparent pricing for each global market, contact Flow today.

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