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REVEALED: How Much Do We Make On Shipping & Taxes?
We hear a lot from international customers. Asking about shipping costs & import taxes/duties.
"Why do I have to pay this? Why isn't it free?"
At Ellusionist, we like to expose the truth about these concerns.
To give you a peek behind the curtain as to how things REALLY work.
There is no such thing as a free lunch. Amazon has spoiled the world into believing shipping is free.
It's not free. Someone has to pay. Whether it's you or the retailer.
Amazon actually lost money for the first 5 years. Without outside investment, they'd be dead.
Post-covid import laws introduced in 2021 have also been playing havoc with people's expectations on taxes for international orders.
TAXES / IMPORT DUTIES / VAT
I actually wrote a blog post on it back in 2021 entitled EXPOSED: What you actually pay in tax - regarding what UK residents pay.
Mostly for UK & European customers, it's because taxes are included in the retail price. So seeing tax after you've paid is such an alien experience.
For US customers, if they live in a state that charges tax (like California) they are used to seeing a price and being charged tax afterwards (like going out for a meal).
This is NEVER the retailer's fault. Our hands are tied. So I think it's unfair to be displeased at something we have no control over.
We see comments like...
"I'm not ordering from Ellusionist, as I don't want to pay the taxes and duties. I'll just order from 'x' shop."
Spoiler alert. Your local shop is paying the shipping & taxes. Someone has to pay.
Or, they're rolling the taxes into the final retail price that you see. Regardless of how, the 2 certainties in life are death & taxes.
Importing goods is not a tax-exempt endeavour. The government wants their grubby little slice.
Our shipping, especially in the last 12 months, has become VERY cheap.
I think people take for granted that shipping a parcel 5,000 miles for less than $20 is a steal.
Think of all of the staff & jet fuel in that chain that needs to be paid for.
"But why can't you do free shipping like X company?"
They are either losing money/eating the cost or committing mail fraud (naming no names). In the interest of staying in business, we prefer to not do either.
I want to make clear to all customers, that Ellusionist does not make money from shipping or taxes annually.
Last year we LOST $113,000 in subsidising shipping alone.
The shipping we offer is the cheapest way that we can send a box thousands of miles... Without it getting lost or taking 6 weeks.
It's the perfect balance between affordability and speed.
WHILE I REMEMBER... TAX DEDUCTIONS
For taxes, we work with a company called Avalara (which we have to pay for, for calculating tax in the UK for example) and then we have to hire tax accountants to make sure every country is paid their correct amount (or we get fined).
Again, Ellusionist loses money by adhering to this new law that was introduced in January 2021. Governments around the world needed a way to pay for lockdowns - and clamping down on imports is one way.
Personally, as a UK resident myself, I wish we didn't have to pay import duties either.
But because that is the way it is, I want to say this...
If you're a performer or professional, then it's a tax-deductible expense that you should be glad to own/go on your books. Please speak to your accountant about what items/purchases can be classed as a tax-deductible part of your business.
If you're a hobbyist then you now know that buying stuff from Ellusionist and importing it into the UK or any other European country is the same as buying an apple at the supermarket. VAT/Taxes will be collected, but with supermarkets, the price you see is with VAT all in.
With Ellusionist (being an American company) the price you see is the price it is without VAT added. If we charge you the VAT at checkout (which we have to do on things worth £150 or under) then we're saving shipping delays and 'handling fees' at the door from Parcelforce/Royal Mail. By taking care of that for you... Which operationally is a loss for us.
Hopefully, we've been able to shine a light on this concern - and give you a real peek behind the curtain to something that may have shocked you in the cart.
Our goal is to release magic so good, that the tax and shipping are MORE than worth paying, because the products are so good.
We do this by only releasing good magic - at an affordable price.
I think we're living up to that.
p.s. Leave a comment if you found this exposé helpful - or ask any questions below.