Dropship Mysteries – What is a Deferred Payment?
Shopping over the internet is a trend that’s growing by leaps and bounds it is important that business over the internet choose courier companies.
Whenever you visit websites or buy by them, you are often asked to join a courier company.
Joining a courier company in other words is shipping with them and this is necessary if you want your products delivered.
However there are thousands of courier companies that function and choosing one the meets your requirement and ships within the area is imperative.
But why would you want to open a shipping account?
-You can place online orders or receive billing statements online
-You get a preferential rate if you choose a particular courier company.
-except that you also get a few other payment options which are not possible if you don’t open an account with them.
It is easier to manager shipping operations.
When you buy online, you also have the option to buy products from a different country.
In this case although you might have a courier account, you nevertheless would have to bear VAT charges and deal with deferred payments.
Deferred payments in simple terms refer to the payment option that you choose and this is done directly with your countries customs.
In this kind of payment option you can choose to setting expenses directly with the customs on a monthly basis instead of choosing to reimburse your courier company.
In case of deferred payments you open a Deferred Payment account with the customs authorities.
This kind of account is the best if you regularly deal with customers based oversea or your resupplier is from another country.
In this payment method, you can settle bills with the customs authorities on a monthly basis or on every item received.
This is the best form of payment in case you ship in foreign goods or ship out foreign goods.
All you need to do is give the deferred payment account number to the custom authorities and you are applicable to certain deductions on import duties and taxes levied on your payments.
When you send gifts or items oversea tax and VAT duties are levied, that you pay for it.
Every country has its own import and export rules and documentation that accompanies packages shipped.
In case you do not include the right documents the shipment could be held by customs or the person receiving it could pay heavy VAT and duty charges.
Usually there are duties that top up the original duty charges after the shipment is delivered.
Hence it is important that you pay off your duty and VAT before shipping it off to your customer in another country.
This helps reduce the cost for the buyer. This is important if you want your business to grow.
additionally if you are a dropshipper you usually have an account with the customs, and hence enjoy reduced duties and VAT charges.
Choosing the right courier company account is important.
Choosing to have a deferred payment account with customs is necessary if you ship across the globe.