Customers will be classified as Importers, meaning they will have to pay import duties and other taxes. And these taxes and import duties range from country to country. Drop-shipping from China comes with a lot of import duties and taxes attached to it.
Assuming you place an order on a website operated by a local company. It is also assumed that the seller is using a drop-ship in China to deliver the products.
The seller provides your details; the details will be printed on the airmail parcel. It will then be transported to your address. As you receive the parcel, you automatically become an importer. This means you are fully responsible for all import duties and taxes that may be involved.
You may also be required to submit documentation to the local customs authorities, to prove that you are the original owner of the assets and the customs value declared is correct.
Most customers do not love dealing with customs authorities directly and they never bargained for the additional costs they incur.
In many countries, there are ‘customs value thresholds’, this allows businesses and individuals to buy items at a low value, and without having to pay import taxes.
But strict laws are governing the thresholds to prevent exploitation of it by individuals and businesses.
Drop-shipping from Malaysia will help you manage your relationship with your customers even more. Because it is possible to drop ship your products and still identity the seller as the importer and not the buyer.
This is the major issue with drop shipping from China because the buyers are always identified as importers and hence charged much money.
Drop-shipping from Malaysia solves this problem because they have an intermediate logistics partner in the country. The logistics partner repackages and forwards each parcel to the target customers.
Unlike in China where local tax authorities see drop shipping as a method of avoiding paying import taxes.
The long delivery time and delay when drop-shipping from China is another huge factor that can destroy your business, it can even go as far as getting your seller’s account suspended. The most common freight used by drop shippers is the economy air freight from China, and it takes up to 12 – 14 days.
This poses a problem because we are now in a modern age; most people expect their products delivered to them as quickly as possible on the same day. But drop shipping from Malaysia takes less time, which is why it is a better option.
What is even worse; during periods of Chinese New Year and other national holidays, the delivery time can take over 28 to 30 days.
Drop-shipping products from China are often not made in compliance with the overseas Product safety standards and labeling requirements.
The products usually found in the major Chinese drop-shipping websites are products that were originally made for the domestic Chinese market.
This becomes an issue for you as a drop shipper, especially when you are based in countries in the North American continent and other developed nations.
Products that are made for the domestic Chinese market are usually made without exception. They never comply with foreign product regulations and safety standards.
This is because China being a great and big nation has its own set of safety standards and labeling requirements that do not correspond with those in other countries.
Drop-shipping from Malaysia solves the problem, as they also comply with foreign product regulations and safety standards. The problem is more prominent in sensitive products, such as electronics, gadgets, and toys which must comply with safety standards.
Drop-shipping from China summarizes that you have to expect razor-thin profit margins. About 9-10 years ago, when drop-shipping was still prominent, you will expect a nice margin added to the drop-shipping price. But things are no more the same, so you have to drop ship from countries with fewer fees to help boost your profit.
Today the marketplace is full of China-based sellers that offer the same items on different drop-shipping websites, with just a few percent profit.
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