Landed cost represents the total amount your customer must pay to purchase a product from one country and have it shipped to another country. It usually refers to the cost of international shipping, plus relevant taxes, duties, and fees.
A cross-border transaction often incurs additional duties that are not displayed to the customer at the time of checkout. The customer, however, is still responsible for paying these hidden costs when the order arrives at its destination.
You can use the Digital River landed cost feature to present customers with the full cost of international orders, thereby minimizing both customs delays and unanticipated expenses at the time of delivery.
The landed cost feature is available to anyone who integrates with the Digital River API. This is true whether you orchestrate your own fulfillment or delegate the responsibility to Digital River.
To configure the landed cost feature, you'll need to complete the following steps:
Verify your fulfiller ships packages outside their country (not all fulfillers provide this service).
Verify your shipper is willing and able to prepay the landed cost on behalf of the customer and then send the invoice to you.
Sign an addendum in your Digital River contract to enable the landed cost feature.
Define your cross-border patterns (that is, the ship-to countries) where you want to enable the landed cost feature. These ship-to countries must be supported by Digital River and cannot include embargoed nations.
Provide samples of completed customs forms to Digital River's compliance team for approval.
Once you have successfully configured the feature, landed cost is calculated on orders where physical products are shipped across international borders to an approved country. The exception is the European Union, where shipments between countries are exempt from duties.
More precisely, landed cost is automatically calculated when you create or update a Checkout and all of the following conditions exist:
The order only contains physical products
The ship to country is on our approved list
In order to calculate landed cost on applicable orders, Digital River makes an API call to a third-party service. For each call to this service, we assess you a fee This fee is in addition to the other license or transaction fees that you may incur.
In the response, we provide you an itemized breakdown of the duties, fees, and taxes that comprise the landed cost and build these individual costs into the order total. Since your customers ultimately pay the full landed cost, we recommend you display this cost breakdown to them on your storefront.
Once the order is submitted, your fulfiller relays it to your shipper, who completes the customs paperwork, ships the package to the destination country, and pays the duties and import taxes on behalf of your customer. The shipper then invoices you for these costs.
A landed cost calculation may fail for a number of reasons. For example, a customer may attempt to ship a product to an embargoed country or you might have improperly formatted the Harmonized System codes associated with the SKU. Additionally, in certain situations, the third-party landed cost calculation service may be unavailable.
For orders with landed cost, if you need to reverse the charges, we only support full refunds of the importer tax.
When an order triggers the landed cost feature, the individual costs are represented by several attributes at both the order-level and the item-level. You can use these attributes to determine the duty paid on the order and to distinguish between taxes Digital River remits and those remitted by the shipper.
In both the Checkout and Order resources, when
true, it indicates that the landed cost feature was triggered and landed cost is calculated and collected. The
totalImporterTax then represents how much taxes the importer of record remits to the government.
However, in these cases,
totalDuty is not always greater than zero, since it depends on whether the importing country levies duties on the order.
For each element in the
items array, two landed cost related attributes may be returned when the landed cost feature is triggered. The first,
importerTax.amount, represents how much taxes the importer of record pays on all quantities of this line item. The second,
duties.amount, indicates the amount of duty levied by the importing country for the line item.