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Landed cost

Understand landed cost and learn how to use Digital River's landed cost feature
During checkouts, Digital River's landed cost feature allows you to present customers with a transaction's landed cost.
Once you set up the landed cost feature, it's triggered when the necessary preconditions are met. After the feature is activated, Digital River's landed cost service generates a calculation and we return that landed cost calculation in checkouts so you can display it to customers.

What is landed cost?

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

Landed cost payment options

Customers have two options to pay a transaction's full landed cost:
For more information, refer to the shipping terms section on the Handling shipping choice page.

Delivered duty paid (DDP)

In this option, customers pay the full landed cost during the checkout process.

Delivered at place (DAP)

In this option, customers do not pay the full landed cost during the checkout process. 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’s landed cost feature

Digital River offers both a standard and a guaranteed landed cost feature.

Standard landed cost feature

You can use Digital River's standard landed cost feature to provide your customers with a landed cost estimate. However, if the estimate returned by our landed cost service is less than the actual importation costs assessed by a country's custom agency, then you're ultimately responsible for the difference.
With this feature, once an order is submitted, your fulfillment logistics provider typically relays an order's details to a shipper, who completes the customs paperwork, ships the package to the destination country, and pays the duties, fees and import taxes on behalf of your customer. The shipper then invoices you for these costs.

Guaranteed landed cost feature

Digital River's guaranteed landed cost feature provides a guarantee to both you and the customer. You must be using the Global Logistics solution to take advantage of this feature.
For more information, refer to the guaranteed landed cost section on the Global Logistics page.

Pre-deployment configurations

How you handle the pre-deployment process depends on whether you're:

Setting up the standard landed cost feature

The standard landed cost feature is available to anyone who integrates with the Digital River APIs. It's not dependent on the version you're using, how you send product data in checkouts, or who acts as your fulfillment coordinator.
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 cost on behalf of the customer and invoice you for these costs.
Step three: Define your cross-border 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 Country Guide.
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).
Step six: Associate a Harmonized System (HS) code with each of your physical products. To do this, you can (1) set hsCode on the SKU (2) associate a SKU group with the SKU or (3) reference a SKU group in productDetails.
For more information, refer to:
In this step, we recommend that you select either option two or three. These options allow you to:
  • Simplify the process of assigning and managing your products' HS codes.
  • Use country-specific HS tariff codes that are tailored to each transaction, thereby improving the accuracy of the landed cost calculation.

Setting up the guaranteed landed cost feature

To get a guaranteed landed cost, you must be using Digital River's Global Logistics solution. For more information on how to access and set up this solution, refer to the pre-deployment section on the Global Logistics page.

Triggering the landed cost feature

Once you perform the pre-deployment configurations, landed cost is calculated during the checkout process. To successfully receive a landed cost calculation at run-time, the following preconditions must exist:

How landed cost is calculated

To calculate landed cost in applicable checkouts, 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 checkout's totalAmount. When you convert a checkout to an order, this is what the customer is ultimately charged

Calculation failures

If a customer attempts to ship a product to an embargoed country, then the checkout fails:
409 Conflict
{
"type": "conflict",
"errors": [
{
"code": "country_unsupported",
"parameter": "country",
"message": "Country 'KP' is not supported."
}
]
}
Additionally, on rare occasions, the third-party landed cost service may be unavailable or unable to generate a calculation. In these cases, no landed cost values are returned in the checkout.

How landed cost is represented in checkouts

In versions 2020-09-30 and earlier, landed cost is represented by totalDuty and importerOfRecordTax.
In checkouts that trigger the landed cost feature, we provide you an itemized breakdown of taxes, duties, fees, and import taxes. Since your customers ultimately pay these costs, you should display them during the checkout process.
The full landed cost is contained in numerous attributes at both the checkout level and the line item level. You can use this data to determine import duties and distinguish between taxes Digital River remits and those remitted by the shipper.

Checkout level attributes

A checkout's totalAmount is ultimately what the customer is charged when you convert a checkout to an order.
The totalAmount however may not represent the full landed cost of a transaction. That depends on how you configure a checkout's shippingChoice.shippingTerms.
If a checkout triggers the landed cost feature, 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 cross-border transaction don't incur any duties. As a result, in checkouts that trigger the landed cost feature, totalDuty is not always greater than zero.
A checkout's 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 checkout's subtotal includes totalImporterTax but doesn't include totalTax.

Line item level attributes

In checkouts that trigger the landed cost feature, each element in items[] contains three landed cost-related attributes:

Importer tax amount

The importerTax.amount indicates the amount of taxes that the importer of record pays on all the products in this line item.

Duties amount

The duties.amount indicates the amount of duty levied by an importing country on all the products in this line item.

Tariff code

A tariffCode represents a product's country-specific Harmonized System code. This value is only returned if you're using SKU groups.
Landed cost calculations are based on this tariffCode. As a result, it's often useful for troubleshooting purposes. For example, if cross-border duties presented to the customer during checkouts are later determined to be inaccurate, you can verify whether the correct code was applied to the product.

European Union cross-border threshold

In the European Union, there’s a de minimis threshold, currently set at 150 EUR, that determines whether (1) duties are collected on imported goods and (2) the buyer or seller is responsible for remittances.
In checkouts where goods are being shipped cross-border into the EU, Digital River’s tax service determines whether the aggregated, intrinsic price of its physical items[], excluding shippingChoice.amount, is (A) less than or equal to or (B) greater than this threshold.

Less than or equal to the threshold

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.
  • Digital River Ireland Ltd., the sellingEntity.name assigned to the transaction, is responsible for the remittance of value-added tax.
  • totalTax contains the amount that this selling entity must remit, which is added to the totalAmount that the buyer pays.
  • Each items[] is assigned a sellerTaxIdentifier, which represents Digital River’s Import One-Stop Shop registration number. After the checkout is converted to an order, this value should be added to the commercial invoice to ensure that buyers aren’t assessed taxes again by customs (i.e., double-charged).
POST /checkouts
201 Created
curl --location 'https://api.digitalriver.com/checkouts' \
--header 'Content-Type: application/json' \
--header 'Authorization: Bearer <Your secret API key>' \
....
--data-raw '{
"currency": "EUR",
...
"taxInclusive": false,
"shipTo": {
...
"address": {
"line1": "Deinsesteenweg 108B",
"city": "Drongen",
"postalCode": "9031",
"state": "Oost-Vlaanderen",
"country": "BE"
}
},
"shipFrom": {
"address": {
"line1": "5215 4th Ave S",
"city": "Minneapolis",
"postalCode": "55104",
"state": "MN",
"country": "US"
}
},
"items": [
{
"skuId": "sku_7d8c3133-342a-4c8e-90b2-ac541fcccd13",
"price": 75,
"quantity": 1
},
{
"skuId": "sku_00af8f73-4aa6-4b08-b904-78b42869da73",
"price": 75,
"quantity": 1
}
]
}'
{
"id": "b83bb92f-f5b5-40d0-9d6d-59a9968d5d83",
...
"currency": "EUR",
...
"shipTo": {
"address": {
"line1": "Deinsesteenweg 108B",
"city": "Drongen",
"postalCode": "9031",
"state": "Oost-Vlaanderen",
"country": "BE"
},
...
},
"shipFrom": {
"address": {
"line1": "5215 4th Ave S",
"city": "Minneapolis",
"postalCode": "55104",
"state": "MN",
"country": "US"
}
},
"totalAmount": 181.5,
"subtotal": 150.0,
...
"totalTax": 31.5,
"totalImporterTax": 0.0,
"totalDuty": 0.0,
...
"items": [
{
"id": "21a44c0f-a50b-43bf-91a6-ebb8d63fbe03",
"skuId": "sku_7d8c3133-342a-4c8e-90b2-ac541fcccd13",
...
"amount": 75.0,
"quantity": 1,
"tax": {
"rate": 0.21,
"amount": 15.75
},
"importerTax": {},
"duties": {},
...
"sellerTaxIdentifier": "IM3720000202",
...
},
{
"id": "0d99a3a7-2601-4980-8fa9-af5cf1d9f3e0",
"skuId": "sku_00af8f73-4aa6-4b08-b904-78b42869da73",
...
"amount": 75.0,
"quantity": 1,
"tax": {
"rate": 0.21,
"amount": 15.75
},
"importerTax": {},
"duties": {},
...
"sellerTaxIdentifier": "IM3720000202",
...
}
],
...
"sellingEntity": {
"id": "DR_IRELAND-ENTITY",
"name": "Digital River Ireland Ltd."
},
...
}

Greater than the threshold

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.
  • Assuming your account has the landed cost feature enabled and you don’t set the checkout’s 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 sellingEntity.name assigned to the transaction, is collecting these costs, in advance, on behalf of the buyer and then remitting them later.
POST /checkouts
201 Created
curl --location 'https://api.digitalriver.com/checkouts' \
--header 'Content-Type: application/json' \
--header 'Authorization: Bearer <Your secret API key>' \
....
--data-raw '{
"currency": "EUR",
...
"taxInclusive": false,
"shipTo": {
...
"address": {
"line1": "Deinsesteenweg 108B",
"city": "Drongen",
"postalCode": "9031",
"state": "Oost-Vlaanderen",
"country": "BE"
}
},
"shipFrom": {
"address": {
"line1": "5215 4th Ave S",
"city": "Minneapolis",
"postalCode": "55104",
"state": "MN",
"country": "US"
}
},
"items": [
{
"skuId": "sku_7d8c3133-342a-4c8e-90b2-ac541fcccd13",
"price": 75,
"quantity": 1
},
{
"skuId": "sku_00af8f73-4aa6-4b08-b904-78b42869da73",
"price": 76,
"quantity": 1
}
]
}'
{
"id": "8365ecbc-0e28-4ba4-bcc7-75ae8c6a93f4",
...
"currency": "EUR",
...
"shipTo": {
"address": {
"line1": "Deinsesteenweg 108B",
"city": "Drongen",
"postalCode": "9031",
"state": "Oost-Vlaanderen",
"country": "BE"
},
...
},
"shipFrom": {
"address": {
"line1": "5215 4th Ave S",
"city": "Minneapolis",
"postalCode": "55104",
"state": "MN",
"country": "US"
}
},
"totalAmount": 213.77,
"subtotal": 213.77,
...
"totalTax": 0.0,
"totalImporterTax": 37.1,
"importerOfRecordTax": true,
"totalDuty": 25.67,
...
"items": [
{
"id": "b8408be2-9abf-42dd-b4ff-1e36e1d776a4",
"skuId": "sku_7d8c3133-342a-4c8e-90b2-ac541fcccd13",
...
"amount": 75.0,
"quantity": 1,
"tax": {
"rate": 0.38,
"amount": 0.0
},
"importerTax": {
"amount": 18.43
},
"duties": {
"amount": 12.75
},
...
},
{
"id": "8b6c522a-2751-44bb-af07-a68147746b72",
"skuId": "sku_00af8f73-4aa6-4b08-b904-78b42869da73",
...
"amount": 76.0,
"quantity": 1,
"tax": {
"rate": 0.38,
"amount": 0.0
},
"importerTax": {
"amount": 18.67
},
"duties": {
"amount": 12.92
},
...
}
],
...
"sellingEntity": {
"id": "DR_IRELAND-ENTITY",
"name": "Digital River Ireland Ltd."
},
...
}