DDU & DDP Explained: Duty Paid VS Duty Unpaid
Brexit has brought a lot of changes to international shipping – including some terminology you may not have come across previously. But if your head’s spinning with all those new terms, don’t worry. Our short guide to DDU and DDP should help you sort out which services your business needs to offer.
What do we mean by DDU vs DDP?
DDU and DDP are international delivery methods that cover:
The costs on imported goods, including taxes and duty
Where customs duty is paid
Who pays the costs: buyer or seller
But what do they stand for?
What is DDU?
Who’s responsible for paying duties, taxes and import fees? The buyer.
Delivery Duty Unpaid (DDU) means delivery duties aren’t paid until the order arrives at its destination. The customer is responsible for paying relevant taxes and import fees when their order is delivered.
What is DDP?
Who’s responsible for paying duties, taxes and import fees? The seller.
Delivery Duty Paid (DDP) means you absorb all the costs. Duty is paid before the items ship, so your buyer only has to pay you for their order and take delivery at their end.
What are the pros & cons of DDU and DDP?
DDU is a great choice for reducing your upfront costs so you can offer lower prices. But is it enough to win customers when they get hit with an unexpected customs bill?
Those additional fees could cost you in the long run with negative reviews, abandoned shipments and loss of online sales.
DDP reduces the risks of customer complaints and abandoned shipments. It is more expensive, but it’s also quicker and more convenient for you and your customers. And if you’ve built your reputation on providing a great customer experience, it’s the clear winner.
Just be aware that there's always a risk of clearance being delayed. In addition, you’ll need someone on the ground to ensure the process runs smoothly, which can add to your costs.
DDU, DDP or IOSS?
Import One Stop Shop (IOSS) is an electronic portal for shipping into the EU where the seller pays any VAT.
Choose IOSS when:
You’re selling into the EU
Goods have a total value under €150
You want to avoid surcharges and custom delays
The seller is IOSS registered, or you’re selling on an IOSS registered UK eCommerce site
Choose DDU and DDP when:
You’re selling into the EU and the rest of the world
The value of the goods is over €150
Duty needs to be paid
The buyer isn’t IOSS registered
The goods aren’t sold on an IOSS marketplace
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