Shopping Discussion

Mail order brokerage fee economics

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  • Jun 29th, 2016 10:44 pm
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[OP]
Deal Addict
Feb 25, 2007
1311 posts
776 upvotes
Ottawa

Mail order brokerage fee economics

There's an article on today's CBC about a movement afoot to increase the limit under which fees/taxes on international mail order purchases would not be applied.

Makes me curious - what are economics of the various brokerage options:
  1. A few stores, like B&H Photo in New York, have it nicely set up for Canadians, with duties and HST calculated in the shopping cart, and collected with a couple of bucks' (~$5) processing fee at checkout. I assume they aren't losing money on every shipment and it was commercially worth their while to IT implement it.
  2. Other stores, like Lands' End, do something similar but with higher processing fees tacked on, and less clarity on what the final price will be.
  3. And for many others, it's of course Russian roulette based on what courier service they choose to send with and what CRA happens to assess (and RFDers learn what shipping modes to encourage/avoid)
I'm actually not violently against paying HST and reasonable duties, and not fussed at the few bucks B&H charges extra for the process (though of course a higher de minimis limit would be nice). B&H's process positively influences my willingness to buy there rather than elsewhere, other things being equal.

Why, in this age of big data and scripting languages, is it not more widespread?
5 replies
Member
User avatar
Nov 13, 2005
276 posts
242 upvotes
Calgary
Some of the express and expedited shipping options include customs and brokerage from the common carriers. There is also the option for you to clear the package yourself. Local customs offices and jump on a PC, what shipment it is, classification of the item for duty rates (have fun with that) pay there and its cleared. Adds more time between delivery though. I used to do my own clearance on containers coming from overseas, but for small packages and value, the expedited shipping option that includes it might be easiest.
Deal Guru
User avatar
Mar 12, 2005
10083 posts
2033 upvotes
Victoria
I try to avoid couriers when cross border online ordering. They either charge a big premium to us a shipping method which includes the brokerage fee, or they charge a big brokerage fee if the method doesn't include it. As they make money from the brokerage fees, they have a vested financial interested to inspect all the packages.

When I order stuff and it's shipped from USPS to Canada Post, the CBSA lets so much stuff slide. I rarely (if ever) see any fees on packages valued under $100. I've even had packages between $100 and $200 go through without being taxes. In my experience it has to be quite noticible to get dinged. I'd rather play roulette with the regular postal services than guarantee I pay everytime with a courier.
Deal Expert
Aug 22, 2006
27311 posts
13016 upvotes
Amazon.com also does the prepaid brokerage for things they sell.
Shipping is pretty cheap too.
I was paying like $3-4 per item to ship to Canada for reasonable sized items.

Same with eBay and their GSP. I don't know why everyone hates on it. I love it.
Member
Jun 21, 2016
283 posts
91 upvotes
death_hawk wrote: Amazon.com also does the prepaid brokerage for things they sell.
Shipping is pretty cheap too.
I was paying like $3-4 per item to ship to Canada for reasonable sized items.

Same with eBay and their GSP. I don't know why everyone hates on it. I love it.
And Amazon will refund the difference if they overcharge you for taxes/fees, but they don't charge more if they undercharge you. I ordered once from .com and had it shipped to Canada, got a 3 dollar refund from amazon as they had over estimated the taxes/fees.

I live so close to the border, I have nothing shipped to Canada, easier, cheaper, and faster to go across and pick it up myself, most companies in the US seem to offer free or very cheap shipping.
Deal Fanatic
Nov 15, 2013
5337 posts
3368 upvotes
Toronto
It's necessary, I once had DHL charge me $24 for a package marked $25(it was actually over $100 but DHL doesn't know that). When pressed why there were two separate admin fees, one for $10 and one for $4, they said it's their minimum charge... DHL lost a customer for life after that one.

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