Amazon FBA Shipping from China on DDP Terms: What to Know
DDP stands for Delivered Duty Paid. It refers to a delivery type where the seller is responsible for all risks and costs of shipping goods until they arrived at their destination.
It is used for international shipping and is a common shipping method designed by the ICC (International Chamber of Commerce) to standardize shipping options across the globe. DDP is generally used for air or sea freight.
DDP is more beneficial for buyers than sellers as it comes with lower risk, liability and costs. However, it is a stressful practice for the seller as it can quickly minimize profits if not handled correctly.
Each country has its own set of rules for international shipping, making DDP an ideal option for high-value items.
When it comes to shipping from China, Amazon FBA is a preferred choice for DDP. Amazon FBA (Fulfilment by Amazon) is a service where Amazon handles storing, packing and shipping as well as customer support and returns of your product.
In this blog, we will understand how Amazon FBA works when it comes to sending shipments from China on a DDP basis.
Know Your Options: Sending Direct to FBA or With a Third Party Logistics Company (3PL)
Amazon receives the goods from the sellers and stores them all before processing the orders as they come in. The rest is taken care of for you as long as you manage the sales and make sure Amazon is kept stocked with your products.
Or you can directly send your consignment to any 3 PL (3rd party logistics) and then ship to Amazon FBA. However, it can be costlier.
Amazon FBA and DDP for China—How it Works
Choose the DDP option in Amazon FBA. With this option, the seller or shipper will pay for the entire freight, duties payment and customs clearance. However, the better one is to opt for EXW (Ex-Works) or FOB (Free on Board) incoterms.
These incoterms let you make liable for payment as well as help you find the right price. Amazon is not billed, and the seller or shipper saves by choosing a better-priced incoterm.
Keep in mind that Amazon won’t be considered an Importer of Record, meaning that the shipper or seller is solely responsible for following the international rules and regulations imposed on shipping.
Any costs or risks associated with shipping with Amazon FBA will be borne by the shipper.
How are Taxes and Duties Paid for DDP Shipping from China to Amazon FBA?
You will be considered as the Importer of Record instead of your logistics vendor. It will make you responsible for all the taxes and duties. However, your logistics can also pay the taxes and duties on your behalf depending on your agreement with them and you will be billed afterwards.
In this scenario, you need to sign certain documents to authorize your logistics vendor to clear the customers and pay the duties and taxes on your behalf.
Amazon cannot be liable for or collect any taxes, duties, or shipping costs associated with FBA inventory.
All shipments should follow the DDP shipping terms. While Amazon cannot be your Importer of Record, it can be made your Ultimate Consignee on your shipping documentation.
So you must have understood the ins and outs of shipping from China with the Amazon DDP option.
However, take care of certain factors such as the product’s compliance with your nation’s law, price, your terms with manufacturers and the trustworthiness of the supplier.