Exporting Handmade Products
At Folksy we only allow people to sell with us if they are based in the UK (you’re guaranteed handmade, British items on Folksy!). However, anyone can buy items at Folksy, wherever they are based in the world! It’s up to our sellers to determine where they will ship to.
We often hear our sellers exclaim with delight that they have sold an item to an overseas buyer. They are delighted that their products are about to travel across the world to some far off place. But what do they need to know to ensure this sale or ‘export’ not only meets regulations in the UK but also in the country of destination.
In this post we’ll look at how to complete customs forms correctly for an overseas sale and how to set up your shop for international postage.
Things to consider when setting your shop up to accept overseas orders…
Hand Thrown Ceramic Bowl – HB Ceramics
1. How to price international postage
This is perhaps the first thing you need to think about when deciding to sell overseas. Postage costs will impact your profit margins so it’s essential that you get the price of postage right. So before you set your postage costs, do some research. Measure and weigh your item (complete in its packaging), check Royal Mail’s international delivery prices for different countries across the world and compare these with other courier services who you trust.
You may want to track your items, post as a special delivery or ensure they are signed for, and all these add to the cost of postage. Be clear on what you are getting with the postage option you choose. For example, Royal Mail’s International Tracked service provides proof of delivery; International Signed requires a signature on delivery; and International Tracked & Signed does both.
- Check postage prices and delivery options for international services at a glance on the Royal Mail’s International Services wallchart.
- Get a quote online using the Royal Mail Price Finder.
- Comparison sites like Parcel Monkey can be useful for finding the best rates.
Top Tip: Keep a list of your product dimensions and weight (once packaged) in a spreadsheet, so you can copy and paste that into online postage calculators for different services and countries, compare results and keep your prices up to date and accurate.
2. Set international postage prices in your shop
At Folksy, we split the world into four zones:
- The European Union (Italy, Greece, Cyprus, Germany, France, Spain, Finland, Belgium, Portugal, Poland, Ireland, Sweden, Denmark, Netherlands, Austria, Latvia, Bulgaria, Czech Republic, Estonia, Hungary, Lithuania, Luxembourg, Malta, Romania, Slovakia, Slovenia)
- USA & Canada
- Rest of World
While we split the world into four zones, the reality is that the world is made up of many different countries so postage costs will vary within these zones. So do some research and check the prices for individual countries within these zones to make sure you don’t get caught out.
When you are happy you have an accurate price for posting a product internationally, fill in the posting information section of your product listing (see above). You can set individual prices for posting to Europe, United States and Canada, and the rest of the World. If you do not want to send to one of these regions, leave that section blank.
Postage for additional items:
When you sell on Folksy you have the option to set an ‘Additional Postage’ rate on your items. This allows you to discount the cost of postage on multiple purchases, ie if someone buys more than one item from your shop. If a buyer purchases more than one item from your shop and you haven’t set an ‘additional postage’ rate, they will be charged the full postage price on each item.
If you would like to offer discounted postage on multiple items for international buyers, you can specify a rate in the ‘additional postage’ boxes. In this case, full postage will be charged on the item with the highest rate of postage, and all other items in the order will be charged at their ‘additional’ rate. If you enter a ‘0’ into the ‘additional postage’ boxes, postage will only be charged on the item with the highest rate of postage – postage will be free on all other items in the order.
Discounted postage on multiple purchases can encourage shoppers to buy more than one item from your shop, but bear in mind the cost that larger packages and increased weight can have on your postage costs, especially when shipping internationally.
An alternative: If you are unsure about how much to charge for international postage, you could instead add a note in your description that buyers should contact you through Folksy.com internal messaging system if they want to arrange overseas postage. This can save time for you initially but it could create an additional ‘hoop to jump’, putting off a potential buyer from overseas.
Ceramic Berry Bowl – Jude Allman
3. Legal Requirements and Customs
Selling an item within the EU
Without getting into the whole in-out argument, the EU makes life simple when exporting. We can trade freely with other EU members and you do not need to complete a customs form or worry about customs duties.
Whatever you are selling within the EU it must meet EU safety regulations, so before you sell anything you need to double check how to comply with EU laws. Most of the legislation is only there to keep people safe. You need to take extra special care when selling anything deemed as high risk, like toys or cosmetics. This guide is useful – Product Safety for Manufacturers
If you sell downloads you may want to read about how the VAT Mini One Stop Shop (aka VAT MOSS) affects you
Selling an item to a buyer outside the EU
When selling or ‘exporting’ any item to a customer outside the EU, you need to include a customs form on the parcel. The Post Office have these ready for you to fill in, or they can give you a roll of sticky forms to fill in later, or you can print them yourself.
As the sender you will need to fill in a CN22 form (or CN23 form for items worth over £270) and fix this to the front of the parcel. The form includes a description of what’s inside the parcel, the value of the goods inside and whether they are gifts or commercial items. Under customs law, the sender is legally responsible for the information on the declaration. It is in your own interest to ensure that the declaration is completed accurately and in full. The CN22 form makes it easy for customs in the country of destination to process the parcel.
The Royal Mail recommends that you add your own name and address to the top left hand corner of the package. If the package is refused, they can then return it.
How to complete the CN22 Customs Form
Download the form here – CN22 Custom Form for when you sell something to an overseas buyer outside the EU
- If you have sold an item you must tick the box ‘Other’. When your item has been bought online it is definitely not a gift, a free sample or documents.
- Fill in a description of what’s inside – eg “Handmade Ceramic Bowl” or “Sterling Silver Earrings”
- Add the weight and value of each item. Use GBP after the amount rather than £. eg 23.00 GBP
- Add the HS Tariff Number and the country of origin. Don’t worry, this sounds complicated but you can find the code online here Finding the HS Tariff Number or commodity code. For example, the code for a Handmade Ceramic Bowl is 69120021. You can just enter the name of your item in the search box at the top of the page.
- Don’t forget to add UK after the code. So in the case of the Handmade Ceramic Bowl you should write: 69120021 – UK
- Add up all the items and complete the total in KG
- Add in the correct total value. This is price of the item, not their wholesale value or the cost of the materials used. If the items are worth more than the customer has paid (for example, if they were in a sale) you should show the discount applied on the commercial invoice.
The Royal Mail and the UK government help pages strongly advise you attach a copy of the ‘commercial invoice’ on the front of the parcel in a clear envelope. A Commercial Invoice can simply be the receipt or standard invoice you usually include in the parcel for the buyer. However to make it an official commercial invoice you need to add the details from the customs form, weight, country of origin, HS Tariff Code and a signature. Theres a useful explanation here – What is a commercial Invoice?
If you leave sections empty on the form it could lead to a delay or to the item being rejected by the destination country, or even sized by them and not returned.
Customs duty and tax payable on exports
Your goods sent outside of the EU may be subject to customs charges and sometimes processing fees. This depends on where and what you are sending and the value. Each country has different charges and thresholds.
The recipient (ie the buyer) will be required to pay any costs prior to the parcel being released, so it is wise to check if any fees will be incurred in the country of destination and make the customer aware. (You can include a warning in your terms and conditions – the ‘buying from me’ section on your shop page, on the listing itself, or email your customer to let them know). You could have a very unhappy customer if they’re not aware that they could be charged.
We have embedded a very useful universal customs duty calculator below but after three calculations you will be forwarded to Pitney Bowes where you will need to subscribe to look up more items. You can also find this information for free if you look at the customs page for the government you are sending the item to, but it does take a bit of delving.
3. VAT and Selling Overseas
Unless your small business turns over £82,000 per year you will not need to worry about VAT and reclaiming VAT.
More useful links:
Preparing international mail (Royal Mail)
Do you have any questions about selling overseas? We have a thread over on our helpful Folksy Forums where sellers have been talking about their experiences of selling overseas. Why not join in, or leave a comment below.
You can also join Hilary alongside an expert panel in a live discussion taking place on The Guardian website, the chat will be live at 1pm on 23rd February – Managing your first international order – head over to add your question and the panel.