Tariffs: In lesson 7 point 1, we talked about how shipping costs can significantly lower your profit margin. Even if you get a great price on a product, the same goes for tariffs. If you're not careful, duty (which is another word for tariffs) will not only eat away at your margin, but you may even end up taking the loss. So, what is duty? Duty is a form of tax which your government imposes on you when you import products from another country. Why did they do this? To answer this question, let's say you lived in New York City in the United States and you want to start a t-shirt business. You have two options: buy local or buy from abroad. Your first option is to buy custom-made t-shirts from a supplier in China for five dollars each. The second option is to buy a similar quality t-shirt from a supplier in Los Angeles for seven dollars each. If you're ordering a thousand t-shirts, chances are you would opt for the Chinese supplier because you'd save around $2,000. This is where your local government steps in and charges you a tax for choosing an international supplier over a local source. The government wants you to buy local because it creates jobs, keeps the money in the country, and they collect more taxes. Let's look at a breakdown of the true cost after you pay duty. If you were to order t-shirts from China with an MOQ (minimum order quantity) of a thousand units for an FOB (Free on Board) price of five dollars, your total cost would be five thousand dollars. Say shipping is another $200, so now you're up to $5,200 USD. Now factor in duty, which for this product is going to cost around eight hundred...
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Customs duty drawbacks Form: What You Should Know
This Section is designed to provide an overview of certain import-related issues that most often are associated with Customs duty drawback issues and to provide the procedures required to file an import drawback claim to get back up to 99 percent of duty you paid to U.S. Customs. 1. Import Entries/Customs Duty Duties and/or Fees 2. Duties and Fees Paid 3. Import Control Information 4. Designated Merchandise or Drawback Product Status 5. Drawback Information U.S. Customs and Border Protection (CBP) uses an electronic process for reporting duty payments. Customs are required to collect information such as date, name, etc. on all payments received in the United States at all points of entry, including in the United States by mail and in the foreign country being imported. For those transactions occurring in the port of entry before entering the contiguous United States, the following information may be needed: (1) Duty Paid (Paid as a result of receipt of merchandise) For payments received in the contiguous United States at a point of origin in the contiguous United States: Duty Paid — The Customs Form 7555-D is then issued for the payment. The date (month and year are optional and must be entered) (2) Designated Merchandise or Drawback Product Status For paydays occurring at a point of origin other than the port of entry: The Customs Form 7555-D is issued for payment for Designated Merchandise or drawback product. The date (month and year are optional) (3) Duties and Fees Paid For those transactions occurring in the port of entry, when payment for duties, fees, or the Paper CBP drawback entry form 7551 are paid directly by another person or entity after entry: The CBP Form 7555-D is issued for the payment of duties, fees, or the Paper CBP drawback entry form 7551. The date (month and year are optional) (4) Duties and Fees Paid (Paid as result of receipt of merchandise) For payments received in the contiguous United States at a point of origin in the contiguous United States: The Customs Form 7555-D is then issued for the payment.
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