Retail Price vs Declared Value
In the world of Logistics, the retail price and declared value are common terms we usually encounter on daily basis or in any transaction.
What Does Retail Price and declared value Mean?
The retail price is simply the final price at which a given item is normally sold at a retail store for the end buyers to consume.
Meanwhile, for those who aren’t familiar with declared value.
Well, the declared value is the value placed on the imported goods by a person or company, who engages in bringing in goods into a country from a foreign entity for the sole purpose of trading. This figure is used by the customs to determine the tax and duty amounts to be imposed on the goods when they are transported across international borders.
It is also the amount stated by the shipper to the carrier as to what their shipment is worth. In this case, declaring the correct amount is crucial to avoid paying too much or getting in trouble for making a false declaration. Furthermore, in case of any loss or damage to the shipment during transport, the carrier is liable to compensate the shipper based on the declared value.
Ways of identifying declare values could be:
Declared value importing goods = cost of the item at which you purchased it
Declared value exporting goods = price at which the item is sold (retail price)
The above equations directly correlate declared value and Retail price. To which the cost of the purchased items is equivalent to the declared value, and declared value is one of the factors on how retail stores are going to price the goods for the end buyers.
Benefits of declaring the value correctly
· It can reduce the risk of customs clearance delays and;
· Helps you to get the right amount of compensation in case of loss or damage.
Please note that the declared value will determine the value on how much will be returned in case of loss or damage during the shipment.
Meanwhile, for cases in which customs suspects that the value of the goods you are about to ship is not accurate then it might be held. This means further paper works to process which may result in paying duties and taxes on your shipment more than you should. These may also cause your shipment to be delayed.
As the covid-19 pandemic continuously disrupts the flow of the supply chain. Any delays caused by not stating the correct information within the customs clearance would certainly be a drawback given our bustling schedules.