Cross-border ecommerce glossary: shipping and customs terms A to Z

A carrier pricing model where rates are set by the geographic zone between origin and destination, measured in distance or customs regions. Understanding zone pricing is essential for modeling international shipping costs and finding where volume contracts save the most.

The international body that governs global trade rules and settles trade disputes between members. WTO Most Favored Nation tariff rates apply when there is no preferential trade agreement in place.

Software that runs warehouse operations: receiving, storage, picking, packing, and shipping. Cross-border WMS integrations have to handle multi-currency inventory valuation, HS code assignment, and customs documentation.

An intergovernmental body with 184 member countries that develops international customs standards, including the Harmonized System for product classification. The WCO's HS is the foundation of every country's tariff schedule.

A negotiated agreement between a shipping platform or aggregator and a carrier that secures discounted rates based on combined shipping volume. Volume contracts are how platforms bring per-package costs well below the rates retail carriers charge individual brands.

Formally registering a business with a country's tax authority to collect and remit VAT. UK VAT registration is required for overseas sellers from the first sale of goods under £135. EU VAT registration through IOSS or OSS is required for overseas sellers shipping into the EU. Shipping before registration is complete is one of the most common and costly compliance mistakes US brands make.

See OSS. The EU mechanism for simplifying VAT compliance on cross-border B2C sales within the EU.

See IOSS. The EU mechanism for collecting VAT on low-value imports (under €150) at the point of sale rather than at customs.

A consumption tax applied at each stage of production and distribution, with the end consumer carrying the final cost. Unlike US sales tax, which is charged only at the point of sale, VAT is collected and remitted at each stage. Rates vary by country: the UK is 20%, EU standard rates run 17 to 27%, and Australia's GST is 10%. US brands shipping to VAT-registered markets have to collect and remit VAT or face delivery failures.

The trade agreement between the US, Mexico, and Canada that replaced NAFTA in 2020. Qualifying goods traded between the three countries can be eligible for reduced or zero duty, so Canadian and Mexican customers buying from US DTC brands may get preferential treatment on qualifying products.

The direct revenue and cost tied to a single unit or order. In cross-border, an honest calculation has to include seven cost components: shipping, payment processing, FX spread, VAT or tax handling, customs fees, returns, and churn from delivery failure.

Following all the laws and requirements that govern international trade: customs declarations, export controls, sanctions, product standards, and tax obligations. Non-compliance can mean customs holds, fines, import bans, and reputational damage.

See landed cost. The total cost of a product delivered to its destination, including purchase price, shipping, duties, taxes, and handling fees.

A company that provides outsourced warehousing, order fulfillment, and shipping for brands. International 3PLs can double as local returns hubs and hold in-market inventory.

Paying collected taxes (VAT, GST, sales tax) to the relevant government authority. Brands selling internationally have to remit in every jurisdiction where they are registered, which is a compliance load that automated platforms can manage on their behalf.

Assigning the correct HS or HTS code to a product for customs. Accurate classification sets the correct duty rate. Misclassification leads either to underpayment, which triggers penalties, or overpayment, which leaves money on the table.

A tax a government charges on imported (and occasionally exported) goods. Tariffs serve both revenue and protectionist purposes, and rates are set by HS code and country of origin.

An extra charge added to a shipment beyond the base rate. Common international surcharges include fuel, remote area, address correction, and oversized package fees. They are a major reason quoted and actual carrier costs diverge.

The entity recognized as the seller for tax compliance purposes, responsible for collecting and remitting the applicable taxes on a sale. It is a lighter alternative to a full MOR structure that lets brands outsource tax compliance while keeping more control of the transaction.

A unique identifier for each distinct product or variant in a brand's inventory. Accurate SKU-to-HS code mapping is what makes automated customs classification possible at scale.

The US provision that let goods valued at $800 or less enter duty-free as de minimis shipments. Changes in 2025 ended this exemption for most goods, which sharply raised duty exposure on low-value imports.

The criteria used to determine a product's national origin for trade agreements and duty rates. Products have to meet specific rules of origin to qualify for preferential duty rates under a free trade agreement.

The process where a customer gets authorization to return a product, tracked by an RMA number through reverse logistics. International RMA workflows have to account for customs documentation on the returned goods.

Moving goods from the customer back to the seller: returns, repairs, and recycling. International reverse logistics is much more complex and costly than domestic, which is the main reason brands use local returns hubs.

The transfer of funds from one party to another, often across borders. In a VAT or GST context, remittance means paying collected tax to the relevant authority.

A shipment the customer declines at delivery, usually because of an unexpected duty or tax charge from the carrier at the door. Refused packages create return shipping costs, processing fees, product loss, and churn. They are a common outcome of DDU shipping without clear customer communication.

Revenue generated per dollar of advertising spend. It is a key measure of international marketing efficiency. Brands with well-built cross-border infrastructure often see higher international ROAS because conversion improves once checkout barriers come down.

A government limit on the quantity of a specific good that can be imported from a given country in a set period. Products under quota need extra licensing and can face steep tariffs once the quota is exceeded.

A company that lets businesses accept electronic payments. For cross-border, PSPs differ a lot in how they handle multi-currency, cross-border fees, and international payment methods.

The fee a payment processor charges per transaction. Cross-border fees run higher than domestic ones. Routing transactions through a local entity in-market can reduce them.

A document listing the contents of a shipment: quantities, weights, dimensions, and packaging. It accompanies the commercial invoice on international shipments and is required for customs clearance.

The EU VAT scheme for sales of goods and services to consumers within the EU, where the seller is established in the EU. It allows a single VAT return covering all member states. IOSS, by contrast, covers imports from outside the EU.

A trade restriction other than a tariff: product regulations, labeling requirements, import quotas, testing standards, and the like. NTBs can block market entry even when duties are zero.

A checkout that shows prices in the customer's local currency, accepts payment in that currency, and settles accordingly. Most international shoppers prefer to pay in their own currency, so it has a direct effect on conversion.

The entity that payment networks and financial institutions recognize as the seller in a transaction, legally responsible for the payment, tax compliance, refunds, and chargebacks. A third-party MOR takes on those responsibilities for the brand, which enables local payment processing and tax compliance without the brand setting up its own local entity.

The total revenue a customer is expected to generate over their relationship with a brand. International LTV usually runs lower on DDU setups because surprise duty charges drive churn. DDP delivery tends to improve it.

Adapting a product, website, or checkout for a specific market, covering language, currency, pricing display, payment methods, and compliance. At a minimum, ecommerce localization needs local currency pricing and a localized checkout.

A warehouse in the destination country that receives international returns domestically. Returns are consolidated and shipped back to the brand's origin warehouse in bulk freight, which cuts the per-item return cost well below individual international return shipments.

A legally incorporated business in a specific country. Having one enables local payment processing (which removes cross-border payment fees), local VAT registration, and local Importer of Record status. Platforms often run local entities in key markets on a brand's behalf.

Sometimes used interchangeably with DDP. It refers to the total cost of goods delivered to a destination with all duties and taxes paid.

The final leg of a delivery, from a local hub to the customer's address. Its quality (speed, tracking, success rate) is the most visible part of the shipping experience and has a direct effect on retention.

The total cost of a product delivered to the customer, including purchase price, shipping, import duties, taxes, and handling fees. Showing full landed cost at checkout is what defines a DDP experience.

The entity legally responsible for making sure imported goods comply with local law, that declarations are accurate, and that all duties and taxes are paid. In cross-border ecommerce the IOR can be the brand, the customer, or a third party, depending on how the shipment is structured. A brand acting as its own IOR takes on full customs liability.

An EU VAT scheme that lets sellers collect VAT on goods valued at €150 or less at the point of sale and remit it through a single EU registration, instead of paying it at customs. Goods with a valid IOSS number clear customs faster and without an extra charge to the customer. From July 2026 a separate temporary €3-per-item customs duty also applies to these low-value imports.

A set of 11 internationally recognized trade terms published by the International Chamber of Commerce that define who pays for transport, insurance, and customs clearance in an international transaction, and where risk passes from seller to buyer. The most relevant for DTC ecommerce are DDP, DAP (DDU), and CIF.

A tax a government charges on goods brought into the country. It is calculated from the HS code, declared value, and any applicable trade agreements, and it is separate from VAT, which is figured on the total cost including duty.

A combined federal and provincial sales tax used in certain Canadian provinces, including Ontario and Nova Scotia. It works alongside GST in provinces that harmonized their provincial sales tax with the federal one.

A 6-digit product classification code created by the World Customs Organization and used by more than 200 countries to identify goods for duty calculation, import restrictions, and trade statistics. Countries add more digits for detail (the US uses a 10-digit HTS code). Accurate HS classification is required on every commercial invoice.

The strategy and plan for launching a product or brand into a new market. In cross-border, GTM covers channel choice, localization, compliance setup, and fulfillment.

A consumption tax used in countries including Australia, Canada, New Zealand, and Singapore. It works like VAT. Australian GST is 10% and applies to imports, with overseas sellers registered under GST required to collect it rather than relying on a de minimis exemption.

The total value of merchandise sold through a platform over a period, before deducting returns, fees, or costs. It is a core top-line metric for DTC brands in international markets.

The difference between the interbank exchange rate and the rate a payment processor or bank actually applies to a transaction. Spreads of 1.5 to 2% are standard on cross-border transactions through US processors. Settling in the same local currency reduces it.

A company that arranges the shipment of goods for exporters and importers, handling carrier bookings, customs clearance, insurance, and documentation. It is distinct from the carriers that physically move the goods.

A designated area where goods can be imported, stored, processed, and re-exported without paying customs duties until they enter the domestic market. Brands with high-volume international distribution use it to manage duty exposure.

A treaty between two or more countries that reduces or removes tariffs on goods traded between them. Products that meet the agreement's rules of origin can qualify for reduced or zero duty. Key ones for US DTC brands include USMCA.

An Incoterm where the seller delivers goods to the named port and loads them onto the vessel, with risk and cost passing to the buyer from there. Common in B2B wholesale and ocean freight contracts.

The carrier that picks goods up from the origin warehouse and moves them to the main carrier's hub or sorting facility. First-mile reliability feeds straight into overall international transit times.

Amazon's logistics service, where sellers store inventory in Amazon's fulfillment centers and Amazon handles picking, packing, shipping, and returns. Some DTC brands use FBA as a cross-border channel alongside their own Shopify stores.

An Incoterm where the seller makes goods available at their premises and the buyer takes on all transport, insurance, duties, and risk from that point. It puts maximum responsibility on the buyer and rarely appears in DTC ecommerce.

A document filed with the exporting country's customs authority describing the goods being exported. The US requires it for shipments above a certain value and for controlled goods.

A major overhaul of EU customs law. Among its provisions is the "deemed importer" concept, under which marketplaces and platforms selling to EU consumers become the legal importer of record and take on customs liability that previously sat with the brand or carrier. It moves into effect around 2028 through the EU Customs Data Hub, and brands selling into the EU need to understand how it changes their obligations from 2026 onward.

A simplified EU VAT scheme that lets a business register for VAT in one member state and account for VAT on all its EU B2C sales through a single return. It launched in July 2021 and cuts the compliance load for brands selling across several EU markets.

A unique ID number issued to businesses importing or exporting in the UK and EU, required to clear customs. UK numbers start with "GB"; EU numbers use the issuing member state's code. A US brand exporting to the UK needs a UK EORI, usually held by its IOR or fulfillment partner.

The entity legally responsible for making sure exported goods comply with the exporting country's laws, including export licenses, accurate documents, and trade controls. It is the export-side counterpart to the IOR. For US DTC brands, the brand or its fulfillment partner usually acts as EOR on outbound shipments.

A US Department of Commerce code that flags goods, software, and technology subject to export licensing. It matters for brands exporting products with dual-use potential, such as certain electronics or materials.

The percentage at which customs duty is applied to the value of imported goods. It is set by the product's HS code and the trade relationship between the origin and destination countries.

A refund of customs duties paid on goods that are later exported again or returned. It matters for brands with high international return rates that paid DDP duties on items that come back.

A model where brands sell straight to end consumers with no retailer or distributor in between. DTC brands on Shopify are the core audience for cross-border infrastructure.

The EU term for a cross-border B2C sale where goods go from a supplier in one country to a consumer in another, or from a non-EU seller to an EU consumer. Distance sales are the transactions covered by the EU OSS and IOSS VAT schemes.

A carrier pricing method that charges by package volume rather than actual weight. The formula is length times width times height, divided by the carrier's DIM factor. For light but bulky products, DIM weight usually sets the final shipping charge.

A specific delivery date or narrow window shown to the customer at checkout or in the order confirmation. A defined promise lifts conversion on international orders. Vague windows like "7 to 21 business days" push it the other way.

Under EU customs reform, a marketplace or platform that facilitates a sale to an EU consumer can be treated as the legal importer of record, taking on customs liability even when the brand ships the goods. This arrives with the EU Customs Data Hub around 2028 and is a major shift for brands selling into the EU through third-party platforms.

The value of goods stated on the customs declaration and commercial invoice. It has to reflect the real transaction value. Undervaluing goods to lower duties is customs fraud and can lead to seizure, fines, and loss of import privileges.

The order value below which imported goods are exempt from customs duties, and sometimes taxes. Thresholds vary by country and have been changing quickly. The US ended its $800 exemption for all countries on August 29, 2025 (China lost it earlier, in May 2025). The UK sets its VAT threshold at £135. The EU is removing its €150 duty-free exemption and applying a temporary flat €3-per-item duty from July 2026.

An older Incoterm, officially replaced by DAP in 2010 but still used everywhere in ecommerce, where the seller ships the goods but the buyer owes all import duties, taxes, and clearance fees at delivery. It leads to surprise charges at the door, refused parcels, and poor retention. Most US DTC brands default to DDU without realizing it.

An Incoterm where the seller takes full responsibility for delivery, including all import duties, taxes, and customs fees. The customer pays nothing extra at the door. DDP is the standard for a good cross-border checkout because it removes the surprise fees that cause refused deliveries.

An Incoterm introduced in 2010 to replace DDU. The seller delivers the goods to a named destination and covers all risk and cost up to that point, but does not pay import duties or taxes, which stay with the buyer. In ecommerce it works the same way DDU did.

A tax a government charges on imported goods. Rates vary by product type (HS code) and country of origin. It is separate from VAT, which is calculated on top.

The process of getting goods authorized to enter a country by its customs authority. It needs correct documents, accurate HS classification, and either payment or deferral of the duties and taxes owed.

A licensed professional or firm that handles customs clearance for importers and exporters. Brokers classify goods, prepare documents, and deal with customs authorities. For high-volume DTC brands, automated classification through a platform usually scales better than paying a broker per shipment.

A financial guarantee required by CBP that duties, taxes, and fees on imported goods will be paid. It is required for formal US customs entries above the de minimis line.

Exchanging one currency for another when processing an international payment. Conversion fees and exchange rate spreads are a hidden cost in cross-border transactions, and they get smaller when you can collect and pay out in the same local currency.

Buying and selling goods between customers and businesses in different countries through online stores. It includes all the logistics, customs, compliance, payments, and returns that make those sales work.

The country where a product was made or substantially transformed. It determines duty rates and trade agreement eligibility, and it has to appear on commercial invoices and customs declarations.

The person or company sending the goods. In DTC ecommerce, that is usually the brand or its fulfillment partner.

The person or company the goods are addressed to. In DTC ecommerce, that is usually the end customer.

The document issued by the seller listing the goods, their value, country of origin, and HS codes. Customs requires it on every international shipment. Incorrect or undervalued invoices are one of the most common reasons parcels get held or fail to deliver.

The US federal agency that regulates trade, collects import duties, and enforces trade law. CBP sets and enforces the US de minimis rules and is the authority behind Section 321 changes.

The total marketing and sales spend to win one new customer. In cross-border it has to be weighed against international lifetime value, which often runs lower because of higher return rates and weaker repeat purchase behavior on DDU setups.

A sale between two individuals, usually through a marketplace. It sits at the edge of the cross-border landscape and rarely applies to DTC brands directly.

A model where a brand ships on its own existing carrier contracts rather than a platform's default network. Platforms that support BYOC add the compliance layer (DDP, VAT, HS classification) on top of the shipping deals the brand already has.

The UK's exit from the European Union, effective January 1, 2021. It ended the UK's place in EU VAT rules and created a customs border between the UK and the EU. US brands shipping to both now deal with two separate regimes: UK VAT through HMRC, and EU VAT through OSS or IOSS.

A licensed facility where imported goods can be stored without paying duties until they are withdrawn for domestic sale or re-exported. It lets brands defer duty and test demand before committing to a market.

A legal document a carrier issues to a shipper listing the type, quantity, and destination of the goods. It acts as a receipt, a contract of carriage, and a document of title. Most international ocean freight requires one.

A sale between a business and an end consumer. This is the standard DTC model. B2C cross-border shipments often qualify for simplified customs procedures and de minimis treatment, though the details vary a lot by country.

A sale between two businesses. Cross-border B2B usually carries different compliance requirements than B2C, including formal customs entry and different VAT handling.

Moving goods by aircraft. Faster than ocean freight and more expensive per kilogram. It is the main mode for DTC cross-border parcels because of speed, reliable tracking, and the light weight of most orders.

An international customs document that lets goods move temporarily across countries duty-free, common for trade show samples or equipment. It rarely applies to DTC shipments.

An extra import duty applied when goods are sold in a foreign market below their production cost or below fair market value. It mostly affects brands importing components or manufactured goods, not typical DTC parcels.

The average revenue per order. It matters for cross-border because a $50 AOV market and an $80 AOV market can have completely different unit economics once you factor in duties, shipping, and returns.