Landed cost
Understand landed cost and learn how to use Digital River's landed cost feature
Last updated
Understand landed cost and learn how to use Digital River's landed cost feature
Last updated
allows you to present customers with a transaction's during checkout.
Once you , it's triggered when the are met. After the feature is activated, Digital River's , which we return to the so you can display it to customers.
Landed cost represents the total amount your customer must pay to purchase a product from one country and have it shipped to another country. Landed cost consists of:
The value of goods in a customer's cart
Shipping costs
Import duties
Taxes
Customers have two options to pay a transaction's full :
Delivered Duty Paid (DDP) is a shipping agreement where the seller assumes responsibility for all costs and risks associated with transporting goods until they reach the buyer's location. This includes paying for shipping, import duties, taxes, and any other fees. Under DDP, customers pay the full landed cost during checkout, ensuring no additional charges upon delivery.
Prior to using this feature, you need to complete the following steps:
Step one: Verify your fulfiller ships products outside of their country (not all fulfillers provide this service).
Step two: Determine whether your shipper is willing and able to prepay landed costs on behalf of the customer and invoice you for these costs.
Step four: Provide samples of completed customs forms, such as commercial invoices, to Digital River's compliance team for approval.
Step five: Sign an addendum in your Digital River contract to enable the landed cost feature (unless already specified in the order form).
In this step, we recommend selecting option two or three. These options allow you to:
Simplify the process of assigning and managing your products' HS codes.
If a customer attempts to ship a product to an embargoed country, then the checkout fails:
In versions 2020-09-30 and earlier, landed cost is represented by totalDuty and importerOfRecordTax.
The importerTax.amount indicates the amount of taxes that the importer of record pays on all the products in this line item.
The duties.amount indicates the amount of duty levied by an importing country on all the products in this line item.
In the European Union, a de minimis threshold, currently set at 150 EUR, determines whether (1) duties are collected on imported goods and (2) the buyer or seller is responsible for remittances.
If it’s less than or equal to the 150 EUR threshold, then:
totalDuty is 0, because duties aren’t collected on what the EU considers to be low-value imports.
totalTax contains the amount that this selling entity must remit, which is added to the totalAmount that the buyer pays.
If the aggregated value of the imported goods is greater than the 150 EUR threshold, then:
Buyers are responsible for the remittance of tax and duty.
In this option, customers do not pay the full during . Instead, they pay product and shipping costs during checkouts, and then, upon an order's delivery, they're responsible for paying duties, fees, and import taxes.
Digital River offers a feature that helps provide your customers with an estimated total cost of their order, including all applicable duties, fees, and import taxes. This estimate helps customers better understand the full cost of their purchase upfront. However, if the actual import costs assessed by the destination country's customs agency exceed the estimate, your company is responsible for covering the difference. The feature streamlines the process, as the fulfillment logistics provider coordinates with the shipper to handle customs documentation and pay the necessary duties, fees, and import taxes on behalf of the customer, billing the seller afterward.
The feature is available to anyone who integrates with the Digital River APIs. It's not dependent on the version you're using, how you , or who acts as your .
Step three: Define your patterns (in other words, where your products ship from and where they ship to).
The ship-to countries must be supported by Digital River and cannot include embargoed nations. For more information, refer to our .
Step six: Associate a with each of your . To do this, you can (1) set on the (2) associate a with the or (3) reference a in .
on the page
The page
Use country-specific HS tariff codes tailored to each transaction, which improves the accuracy of the .
Once you perform the , the landed cost is calculated during . To successfully at run-time, the following preconditions must exist:
The contains
The checkout's are associated with a .
The checkout's flag must be false.
The checkout contains a and its value is inclusive of any
The checkout's must be .
The checkout's is on the approved list
The checkout's and shipTo.address.country are specified, and the values are different. Since shipments between EU countries are exempt from duties, a checkout's ship from country and ship to country can't both be EU nations.
To calculate in , Digital River sends an API request to a third-party service. Based on the data provided in the request, this service calculates taxes, duties, fees, and import taxes.
We use the values returned by this service to build a totalAmount. When you , this is what the customer is ultimately charged
Additionally, on rare occasions, the third-party landed cost service may be unavailable or unable to generate a calculation. In these cases, no are returned in the .
In , we provide you with an itemized breakdown of taxes, duties, fees, and import taxes. Since your customers ultimately pay these costs, you should display them during .
Numerous attributes at and the contain the . You can use this data to determine import duties and distinguish between taxes Digital River remits and those the shipper remits.
A totalAmount is ultimately what the customer is charged when you .
The totalAmount however may not represent the of a transaction. That depends on how you configure a checkout's .
If a , then importerOfRecordTax returns true. In these cases, totalImporterTax indicates the tax amount that the importer of record remits to the government and totalDuty are duties levied on the products by the importing country.
Sometimes products in a transaction don't incur any duties. As a result, in , totalDuty is not always greater than zero.
A totalTax represents taxes that Digital River remits to the government. Its value does not include totalImporterTax. Those taxes are remitted to the government by your shipper.
This means that a subtotal includes totalImporterTax but doesn't include totalTax.
In , each element in contains three landed cost-related attributes:
A tariffCode represents a product's country-specific . This value is only returned if you're using .
Landed cost calculations are based on this tariffCodeConsequently, it's often useful for troubleshooting purposes. For example, if duties presented to the customer during checkouts are later determined inaccurate, you can verify whether the correct code was applied to the product.
In where goods are being shipped into the EU, Digital River’s tax service determines whether the aggregated, intrinsic price of its items[], excluding shippingChoice.amount, is (A) or (B) this threshold.
Digital River Ireland Ltd., the assigned to the transaction, is responsible for the remittance of value-added tax.
Each items[] is assigned a sellerTaxIdentifier, which represents Digital River’s registration number. After the is converted to an , this value should be added to the to ensure that buyers aren’t assessed taxes again by customs (i.e., double-charged).
Assuming your account has the enabled and you don’t set the shippingChoice.shippingTerms to DAP, the amount that the buyer must remit is assigned to totalImporterTax and totalDuty.
totalImporterTax and totalDuty are added to totalAmount, which means Digital River Ireland Ltd., the assigned to the transaction is collecting these costs in advance, on behalf of the buyer, and then remitting them later.