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Date: 2016-08-12

Documentation Needed for E-commerce Transactions

Documentation for e-commerce cross border transactions is the same as if the order was placed and payment made by any other means.  As discussed in previous blogs there are three general kinds of e-commerce transactions, all involving documents:

1. Those conducted via your website and where you process payment via wire transfer, or debit or credit card and you handle fulfillment--shipping

2. Those conducted on a third party site or platform where the platform handles payment and fulfillment

3. Those conducted on a third party site where the platform handles payment and you do the fulfillment

4. Those conducted by a third party site and where you handle payment on or offline and you handle fulfillment.

WPG is an example of the fourth model, but of course includes such value-added benefits as this blog, the Concierge Service, learning resources, document sharing, and much more. Exporters often use more than one model.

Nowadays you can outsource almost all of the steps associated with an online transaction from finding the customer to returning the product to stock if it didn't fit or wasn't right. Of course you pay for each service you purchase, and need to carefully calculate whether you'll make the desired margin after shelling out for the desired services.

If you take fulfillment on yourself there are key documents and some information you'll need to be familiar with.

The commercial invoice

You generate it and it contains contact information, description of goods, the value of the goods (what you are charging the customer), plus the cost of freight and insurance. Your freight forwarder or shipping company will provide the latter.

Harmonized System

Every traded product has a six-digit number assigned to it for customs valuation. The number is always the same for the same product. Customs officials at the port of entry use this number for statistical purposes and to assess customs duties. Products may have different duty rates and they differ by country. Tax rates also differ by country and range from zero in the U.S. to more than 20 percent in the EU.  If you are shipping from the U.S., you can find  HS numbers by going to the Schedule B search engine of the Foreign Trade Division, U.S. Census Bureau. We've heard stories of consultants charging small businesses hundreds, even thousands of dollars for "research" to find one HS Number. Don't pay them! Contact the WPG Concierge Service and we'll find it for you as part of your member subscription.

Air bill/way bill

A document issued by the shipper with information provided by you. You can complete this document online using a tool provided by your shipper of record.

Customs Declaration

Use only when shipping via the government postal system. Keep in mind that the postal service will not pre-pay duties and taxes and goods will be held at the post office nearest the buyer's home or workplace. The buyer is responsible for paying any applicable duties and taxes, which for many countries including Canada, kick in on goods valued at $25 and over. They kick in on goods valued at $200 entering the U.S.

Automated Export System (https://aesdirect.census.gov/)

This is an electronic filing for U.S. Exporters when goods exceed a value of $2500. Your shipper or freight forwarder can file on your behalf for a nominal fee.

Certificates of Origin

Needed only for shipment to certain countries. For shipments within NAFTA where the goods qualify for duty free treatment, a Certificate or origin is required for goods valued at more that $2,000. Mastery of these documents usually comes after the first time completing them. You can save money by completing them on your own.  But if your online business grows quickly, you’ll probably want to outsource them.


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