To automate duties and taxes at Shopify checkout, connect a landed cost provider that calculates duties, taxes and fees for every international cart in real time and collects them with the order total. With the FlavorCloud app for Shopify, international orders ship DDP by default, so your shoppers pay the full landed cost once at checkout and nothing is collected at the door.
This guide covers what you need, the setup steps in Shopify and FlavorCloud, and how to check it is working.
Why automate duties and taxes at checkout?
If duties and taxes are not collected at checkout, the shipment travels DDU (Delivered Duties Unpaid) and the carrier bills your customer on delivery. That surprise bill is when parcels get refused, returned and charged back. Automating the calculation at checkout means:
- Shoppers see the full landed cost before they pay.
- Duties, taxes and customs fees are paid upfront, so the parcel clears customs without waiting on the customer.
- You stop quoting rough estimates by country and stop absorbing the gap when they are wrong.
What you need before you start
- A Shopify Advanced or Shopify Plus plan with the 3rd Party Calculated Rates feature turned on.
- Complete product data on every product you ship internationally: weight, HS code and country of origin.
- A FlavorCloud account, created when you install the app.
How to set it up
1. Install the FlavorCloud app
- In your Shopify admin, select Apps, then Visit the Shopify App Store.
- Search for FlavorCloud, click Add App, then Install App.
- Follow the setup wizard and verify your email from the confirmation message.
2. Set DDP as your default terms of trade
- In the FlavorCloud app, go to Settings and open Shipping.
- Select the service levels you want to offer, such as Standard or Express.
- Set DDP as the default terms of trade for duty and tax collection.
Read more in Shipping with DDP (Delivered Duties Paid).
3. Add FlavorCloud as your international shipping rate
- In Shopify, go to Settings > Shipping, open your shipping profile and click Manage Rates.
- Under Shipping To, create an international zone.
- Click Add Rate in that zone and select FlavorCloud.
- Make FlavorCloud the only international rate, and remove it from your domestic zone.
4. Complete your product data
Landed cost is calculated from each product's HS code, country of origin and weight. If any product in an international cart is missing one of these, duties and taxes are not calculated for the whole cart. Check:
5. Show the cost breakdown (Shopify Plus)
- In Shopify, go to Settings > Checkout and choose Customize.
- Open Apps, find the FlavorCloud Cost Breakout extension and turn it on.
- Save your changes.
Shoppers then see shipping, duty, taxes and fees as separate lines. Without the extension, the breakout shows on the third line of checkout. See Showing cost breakout in checkout.
6. Optional: build landed cost into your prices
If you would rather show one all in price, use Localized Market Pricing to display prices that already include shipping, duty, tax and fees in each market.
7. Place a test order
Run a test cart to each of your top markets and confirm that duty and tax lines appear and that the totals look right.
What happens at checkout
- The shopper sees the product price, shipping, and duties and taxes, and pays them all at once.
- If the shopper changes the cart, FlavorCloud recalculates using the shipping method they chose.
- For destinations that do not accept DDP, FlavorCloud switches that order to DDU automatically.
- Duties, taxes and customs fees are guaranteed in every order, so the amount the shopper paid is the amount that covers the shipment.
What about returns?
When an international order comes back, some of the duties and taxes paid on it may be recoverable. See Understanding duty avoidance and duty recovery.
FAQs
Do I need Shopify Plus?
You need Shopify Advanced or Shopify Plus to use third party calculated rates. The Cost Breakout extension is available on Shopify Plus only.
What if a product is missing an HS code?
Duties and taxes will not be calculated for any cart that contains it. Add the HS code, weight and country of origin before you send international traffic to that product.
Can shoppers choose between DDP and DDU?
Yes, you can offer both. We recommend keeping DDP as the default so shoppers are never billed at the door.
Can I use landed cost without the full FlavorCloud platform?
Yes. The Landed Cost Engine is also available as a standalone API for custom checkouts.
Questions about your setup? Contact your FlavorCloud account manager.