Small business manufaturer -- Partnering with a distributor in Europe?

I sell music synthesizers that I build myself. A lot of my orders end up coming from Europe. However, the customers get upset that they have to go through customs which adds hassle and delay to their order. Are there any companies that can act as distributors for my wares, shipping them out from within the EU?

If you have a decent product, there are boatloads of companies who would be happy to distribute your product. They will, however, demand exclusivity in their country or sales region and be paid 30 to 50% of the retail price. There are also problems with the fluctuating value of the Euro versus the dollar.

Perhaps what you are looking for is a distributor who for some fee will take care of the paperwork. In this case, I don’t have any experience and can’t help you out.

If you do this you will quite possibly need to ramp up the price substantially to accommodate a layer of profit for a distributor.

As a consumer who has occasionally ordered things from the US, one other method to cut down on hassle for your customers that I’d recommend would be for the seller to get all his ducks in a row beforehand.

[li]in my experience, when the accompanying documentation esp. the invoice are complete and the parcel company is competent and had the correct instructions from the shipper, there is no hassle and very little delay for me as the recipient - I get the package already cleared by customs (by the parcel company on behalf of me), and some time later I get a separate invoice from the parcel company, for import VAT advanced on my behalf plus expenses.[/li][li]However, if the vendor did not prepare the shipment properly, there was hassle for me. Egregious examples were an invoice sent by e-mail but not also physically included in the shipment, invoices that did not clearly specify the content (brand name but not a description of what the product actually was) so customs was at a loss how to classify the product, invoices that specified product price but not shipping cost (import VAT is assessed on both), and cases where the parcel service was not clearly instructed beforehand, so they had to try and contact me first to get instructed to present the package for customs clearance on my behalf. [/li][/ul]

I’d recommend getting advice from the parcel sevice that you use, and possibly by other organizations (customs service? chamber of commerce?) that serve your business.

Also, to avoid surprises for your customers, it would be advisable to state, with your sales price and shipping cost, that the customer will also have to pay import VAT on that (and possibly a smaller customs tarriff - don’t know if any applies to music synthesizers). (Note: VAT also applies to intra-EU sales, only it appears upfront on the vendor’s invoice as opposed to being levied separately by customs).

Hmm, I sound a lot like example #2 in your list. I shipped to a German customer recently and he was upset about the customs officer demanding a printed PayPal receipt, etc. You are saying that I can pre-pay the VAT and duties, at least for German customers, such that they get the parcel at their door right away?

I primarily ship via USPS Express Mail. Should I try asking them? (Sounds futile.)

Oops: I think you are saying that the German Post Office pays the VAT/duties, and then sends a bill. That is still pretty good.

I suspect that in this case either there was no invoice with the package, or they doubted that the price plus shipping noted in the invoice was the real price (I have received some books packages where the sender quoted a ridiculuously low, nominal value, perhaps in a bid to get around customs processing).

Perhaps you could include a line to the effect of “Total of [amount] paid on [date] byPayPal, thank you” in the invoice?

Regarding the VAT/customs charges payable by the recipient: for packages via parcel post (i.e. shipped via USPS and delivered via Deutsche Post) I almost invariably had to pay COD; for other parcel companies e.g. FedEx I sometimes paid COD but more usually I was invoiced by them later; that included a hefty-ish processing fee for them on the order of 10-20 EUR IIRRC.

International shipping companies like UPS, FedEx, etc. probably have an option for import charges/VAT to be charged back to the sender. That would cost you of course, e.g. here in Germany VAT payable on price + shipping is 19 %, plus actual customs dues if any, plus the shipping company’s processing charges.

They do, but they’re very expensive, and the time that I had my product damaged was when it was UPS shipping it. By comparison EMS is great.

But, I visited the FedEx page and found their international tools excellent. It walks me through creating the detailed invoice, and even tells me the tax and duties my customer would have to pay, so that I can post this info ahead of time. Plus, the tools are designed such that I can use them even if I plug in USPS prices.

The one question I have is where to place the invoice. The customs declarations I print out of PayPal go into plastic pocket on the box. Should any other documents go there too, or inside?

In my experience when all the papers customs need are in an outside plastics enclosure they hardly ever bother to open the package itself.

Wow, tschild, you have special business partners that your parcel service does customs! (Though I see you have to pay extra for it). The last time I ordered TV DVDs from the US, I had to drive to the custom station and pay the import -VAT and the protection tariff. Nowhere did I see the option of choosing a parcel service who would do that for me.