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All products from Aliexpress will cost at least 21% more from 2021

Many people buy stuff through Aliexpress. Up to and including 2020 you can buy products up to 22 euros without any import duties and other costs. This is changing, because all products from Aliexpress will cost at least 21% more from 2021

Aliexpress and additional costs

It is common knowledge that the stuff from China costs a pittance of what they cost here. This ensures that many people order their products directly from China. Not surprising, because that way you can give low budget gifts, make treats and much more.

Until December 31, 2020, for packages with a value of less than 22 euros, pay no extra costs. Only from 22 euros you pay 21% VAT. If your shipment is worth more than 150 euros, import duties will be added in addition to VAT. In most cases this amounts to 3 – 4% of the total value. Not all packages are checked:the customs authorities remove packages at random.

UPDATE:the rules have been postponed for now until July 1, 2021. The Netherlands and Germany have even asked for a postponement until January 1, 2022, because it is not so easy to arrange from a tax perspective.

All products from Aliexpress will cost at least 21% more from 2021

However, as of January 1, 2021, everything will be overhauled. Thanks to a new VAT rule from Brussels, you must transfer all products . from 1 July 2021 that you order outside the EU pay 21% VAT. In the worst case, customs clearance costs of at least 13.00 euros (depending on the delivery person) can also be added.

So if you buy a product for 5.00 euros, an additional 1.05 euros will be added. The more expensive a product, the higher the extra costs. Add to this any customs clearance costs (it is unclear from what amount this will be calculated) and your cheap product is suddenly not so cheap anymore.

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The end of dropshipping?

The new rules regarding orders from China, among other places, will hit the dropshippers particularly hard. They order on a large scale and sell the products here tens of percent more expensive. Sometimes this even goes up to 100% or more. The new policy forces dropshippers to pay VAT on all products. And the chance that they will have to pay customs clearance costs is many times greater. With this, Brussels is trying to put a stop to dropshippers and their often absurd profit margins.

How can you avoid extra costs for orders on Aliexpress?

That is actually very simple:more and more companies offer shipping from an EU country on Aliexpress. This means that you can order products from Spain, Poland, the Czech Republic or another country in the EU. This often not only shortens the shipping time, but you avoid further costs. Within the EU you do not have to pay VAT and clearance costs. The products sold in the EU are usually a bit more expensive, but that is often still cheaper compared to the new costs.

Extra tip:also make sure that you have good accounting to keep the costs in order. For more tips, see ZZPdaily.nl.

How will the shipping costs from China change?

These are not the only things that will change when ordering products from China, among others. This also applies to the shipping costs. Until now, you can opt for free shipping for many products. That is very crooked, especially when you consider that some products easily travel a distance of 15,000 km before you have them in your hands.

China can apply these rates (or lack thereof) because there is a 50-year-old treaty. In this treaty, China is seen as a third world country. This has the advantage that national postal companies have to deliver Chinese goods weighing less than 2 kilos almost free of charge. By now everyone knows that China is no longer a third world country. And so the rules regarding shipping are also tightened. Fortunately, this cannot be done in one go, but count on having to pay at least 150% more shipping costs by 2025.

Do these rules offer new opportunities for local entrepreneurs?

That depends:if entrepreneurs work from dropshipping, the opportunities will decrease sooner. Unless the entrepreneurs still get enough stock before the end of the year. However, if local entrepreneurs work with locally produced or EU-produced products, there are countless opportunities.

What are the changes on Bol and Amazon?

Not only small businesses will notice these changes. This also applies to major players such as Bol and Amazon. Here the number of dropshippers has increased alarmingly in recent years. These dropshippers will either have to adjust their profit margin or increase the prices. In the latter case, you can assume that people will look for alternatives. As a result, the range on these platforms is likely to change quickly.

Consumer protection or extra model to make money?

After reading the above, you can of course wonder what the rationale behind these new measures is. Does Brussels want to collect extra income on the back of the ordinary citizen, from which it is not yet clear where the money will flow? Or is it an attempt to encourage local entrepreneurs? Or is it perhaps an extra protection for the consumer himself?

The latter would be a great option. Many products from China do not meet European standards (CE quality mark). That is not so bad for some products, but for clothing, toys and electronics, for example, it can pose a potential danger to consumers. Because the products do not meet certain safety requirements, you get products in the country that can be harmful.

Everyone knows the stories of electronic devices that catch fire due to the use of Chinese cables. Or toys that literally fall apart from misery with the danger of a child swallowing small parts.

 The impact on low budget stores like Action

Fortunately, you don't have to worry that low budget stores like Action will now adjust their prices. These shops normally pay different rates, both for imports and customs clearance costs. As a result, the prices in the stores will hardly have to be adjusted, if at all.

Reading tip:saving money as a family is something you do together

Making Aliexpress orders from the EU

Alibaba is working hard to complete the distribution center in Liège. There must be a large stock of products here, which you can still purchase at a very competitive price. In this way, the company circumvents the VAT rules, import and customs clearance costs. Unfortunately, the company is not that far yet and until then you will have to use deliveries from the EU.

Will you continue to order on Aliexpress in China in 2021 or would you rather opt for orders from the EU, even if it may cost a little more?