What Is Delivery Duty Paid (DDP) Shipping?
Online retail businesses can choose different strategies when shipping orders internationally. Some offer free shipping for all orders or orders above a specified total, while others add the shipping cost to the cost of goods at checkout. Some expect buyers to pay the taxes and duties that may apply to their orders, while others pay them on behalf of their buyers. The latter approach is called Delivered Duty Paid (DDP) shipping.
Delivery Duty Paid (DDP) is an Incoterm (an internationally recognized commercial term adopted by the International Chamber of Commerce) that means that the seller is responsible for all risks and costs associated with shipping goods to the buyer. This includes clearing the goods through customs and paying the taxes and duties imposed by the customs authority of the destination country, which are normally paid by the recipient.
DDP shipping places the minimum obligations on the buyer: buyers are not liable for actual shipping costs or any taxes and duties applied to their orders. Due to this, it is considered better for customer experience than Delivered Duty Unpaid (DDU) shipping. DDP simplifies international shipping, offers clarity that boosts conversion rates, and provides customers with a smooth shipping experience because they don’t need to worry about any additional costs or paperwork.
However, DDP shipping can be a very big risk for sellers both in terms of extra costs (shipping fees, customs duties, taxes, adequate insurance coverage), which can be quite unpredictable, and potential risks, such as lost or damaged goods. In addition, it involves dealing with paperwork and import/export laws of multiple destination countries, as well as extensive communications with customs officials. As a result, DDP shipping is typically only profitable when shipping high-value items.
How do you know if Delivered Duty Paid shipping is right for your business? You will likely benefit from DDP if you have a stable customer base abroad and consistently ship your goods internationally, or if you’re planning to expand to international markets. If you’re shipping one-off orders internationally, it won’t be worth the hassle.
So, you’ve decided to give DDP shipping a try and offer it to your customers, what next? Your next step is choosing a shipping solution that will make things easier for you and help you streamline the international shipping process. One of available options is GlobalPost Plus, an international shipping solution for small and medium-sized retailers that are seeking to ship to major international markets (Australia, Canada, Hong Kong, Mexico, New Zealand, UK) from the United States.
How does shipping via GlobalPost Plus work? You purchase and print a GlobalPost shipping label and ship the order to the nearest GlobalPost processing facility in the United States. At the facility, your package is processed, and an employee prints an international shipping label and affixes it to the package.
GlobalPost then delivers the shipment to the destination country; to expedite the delivery process, GlobalPost pre-clears the shipment with the customs office of the destination country. Any taxes and duties applied to the shipment upon clearance are billed back to you. Once the shipment is cleared, it is delivered to the recipient.
Like we have already mentioned above, DDP shipping is by no means perfect; like any shipping method, it has its pros and cons. But if you decide that the pros outweigh the cons for your business, you can purchase and print GlobalPost Plus shipping labels with PostageMaker to get a shipping discount and reduce the costs associated with DDP shipping.