Part of owning a brand is taking into consideration what everything is going to cost. Budgeting for these costs helps for you to be ahead of the curve and make a sustainable profit. One of those costs that is often overlooked is import taxes and freight fees. Import taxes and freight fees effect the price that you charge a customer so it is important that you keep these low to be a competitive brand.
Import taxes increase the cost of your product to a foreign buyer and may effect your competitiveness in the market. Brands who are importing goods valued over $2500 have to pay a formal entry and be cleared by a customs bond. You must declare the items price and how many units to get an accurate number. Express shipments may be exempt from import taxes. Larger brands will have to pay more in important taxes because of the amount of product being imported. Every country varies on the percentage taxed on imports so we recommend working with a logistics consultant to get started and budget appropriately. Until then, try this import & customs duty calculator to get a basic estimate.
Freight prices have varied throughout the years because of government regulations. There are some ways to get make sure you get a good price and security when using freight companies. One of these ways is to join an association. Associations often give shipping discounts and help you build relationships with other shippers and these relationships help you save time and money. Another way to save money on freight fees is to consolidate your goods. Shipping more items less frequently also has a large impact on how much you are paying for freight fees.
Consider reaching out to your garment factory for advice on import taxes and freight planning. Since they often work with overseas clients, garment factories usually have preferred freight forwarders they can recommend as well as a good understanding on taxes to budget for. Especially if you are in an existing large market of theirs, like the United States. By using these tips and doing your research you can better budget for your production. Budgeting is important so that you appropriately price your product to make a profit since these fees can increase the cost of your product.
So many things go into launching and building a successful ethical fashion brand, and this is just one tiny part of the puzzle. If you want to get expert insight and advice and know you are doing it right join the Coaching Club. Our 4 month brand accelerator takes you through production, marketing, wholesale, PR, and funding to prepare you to build a successful brand. Plus, this season we've added sustainable materials sourcing and our ethical manufacturing platform. Apply now!