Since I first started selling on Amazon, Chinese suppliers told me, “Shipping by sea is cheaper!” But many suppliers won't tell you about all the extra fees that come along with shipping by sea, or the headache-inducing process of actually getting the shipment to your door.
In the beginning, while I was only ordering small quantities of products, I always shipped by air. I didn’t have the capital I needed to invest in large enough quantities to lower the shipping cost. But as I began making more and more money, I was able to afford larger chunks of inventory.
When my wife and I were ready to ship the first pieces of our new clothing line, we decided, “Let’s ship our first order of sandals by sea!” When I asked the supplier what the cost of shipping by air would be, I was quoted $800. When I asked about the cost for shipping by sea, I was quoted $400. At half the price, shipping by sea seemed the obvious way to go. Boy was I wrong.
Filings and Fees
The supplier recommended I find a customs agent to help me with the process. After calling agent after agent after agent, I finally found one who took the time to answer my questions. And the more I talked to the agent about shipping by sea, the more fees began to appear.
This was 18 months ago. Having been through the process multiple times now at larger and larger quantities, I want to share my knowledge of these fees with you, so you know what to expect:
1. Importer Security Filing Fee
The US Customs Border Protection requires all importers and vessel carriers to provide electronic data for in-bound ocean shipments. In layman’s terms, it’s just information about what items you have on the boat.
Typically, shipments arrive in large rectangular metal boxes, like the ones you might see on ships in superhero movie battle scenes. These are called "containers." Our shipment of sandals was in one small part of one container. US Customs needed to know what was in the box, to be sure I wasn’t shipping in bombs or drugs or any other illegal substances. I paid a company to take care of the electronic data for me, and it cost me $198.
2. Entry Filing
On top of the ISF fee, there’s entry filing to deal with. You need to purchase a customs bond, which acts almost like insurance. If you don’t pay the customs, for some reason, the insurance company covers the fee for you. The entry filing fee cost me $277.
3. Freight Fees
Freight fees are the fees for the shipment itself. My freight fees weren’t terrible; they totaled $178.
4. Warehouse Fees
Next, there are warehouse fees. In our case, we live in Texas, but our shipment went to a port in California. The shipment had to be picked up, unloaded, and stored in a warehouse until it could be forwarded to Houston. If you live near a port, this won’t be as much of a problem, but if you don’t, it’s just another fee to add on.
5. Delivery Fees
Finally, we had to pay a fee to actually have the shipment delivered to our doorstep. We paid $470 to FedEx to have everything shipped from Houston to our house.
The total cost of having our products shipped by sea, after these various fees, was $1,200, three times more than what our supplier had quoted. It ended up costing more than air shipping, which would have only been $800. A lot of suppliers will send you amazing "quotes" for freight on board cost but are not including all the extra fees the buyer will have to pay.
If you decide to ship an order by sea, you can find a customs agent who will be honest and straightforward with you, and will answer all your questions. Get an idea ahead of time of what all the extra fees will add up to. Unless your order is big enough, you might decide air shipping is more cost-effective.
The customs agent my supplier recommended, US Import Bond, was excellent, but some of the first emails they sent me were honestly overwhelming. They were packed full of all the information I could possibly need. No detail was missed. It’s amazing how thorough US Import Bond is – but the longer I stared at the email, the more my brain turned to mush. Thankfully, when I called US Import Bond, they happily explained everything I needed to know, taking me through every step of the process.
Last October I and my business partner traveled to China and set up our own Just One Dime office for shipping, logistics, customs, product inspections, factory inspections, and sourcing. We have a team of five bilingual people in China, a warehouse in Yiwu, and a warehouse in the US as well as a team here in the US who coordinates with the team in China. The purpose is to make sourcing, shipping, customs, and product inspections as seamless as possible for Amazon sellers. If you need help, go here to see more and our team will reach out to you.