A new update from Shopify is enabling merchants to optimize their international shipping process by allowing for precise, country-specific Harmonized System (HS) code assignments for products. This development aims to minimize customs issues and make tariff calculation more accurate, improving the global selling experience.
Key Takeaways
- Merchants can now assign detailed HS codes tailored to each country they ship to.
- This helps reduce customs delays and ensures accurate tariff calculation for customers worldwide.
- Shopify's Managed Markets feature provides visibility into assigned HS codes, keeping merchant and service codes separate for clarity.
What Is an HS Code and Why Does It Matter?
HS codes, or Harmonized System codes, are internationally standardized numerical methods that classify traded products. They are essential for customs authorities to determine tariffs, taxes, and to ensure products comply with regulations. Traditionally, HS codes are recognized up to six digits, but countries often require more detail, using extra digits to impose specific rules or fees.
How Country-Specific HS Code Management Works on Shopify
Shopify now allows merchants to enter detailed, country-level HS codes for every market they sell into. This means:
- Merchants can specify codes beyond the basic 6-digit classification, aligning with each destination country’s import requirements.
- Accurate HS codes ensure tariffs are calculated based on local rules, reducing surprises for both sellers and buyers.
For users of Shopify's Managed Markets service, the platform displays the HS codes assigned by Shopify for each market. Crucially, these codes are kept separate from those merchants may enter on their own, allowing for easy reference and oversight. Merchants can always see which codes and rules are being applied in each scenario.
Benefits for International Merchants
This update offers several advantages for businesses selling globally:
- Reduced Customs Delays: Matching the exact codes needed by each country prevents misclassification and border delays.
- Transparent Pricing: Accurate codes mean correct duties, helping customers avoid unexpected fees at delivery.
- Regulatory Compliance: Staying up-to-date with country-specific classifications helps merchants comply with local import rules, minimizing risk.
| Feature | Previous Workflow | New Workflow |
|---|---|---|
| HS Code Detail | Up to 6 digits, global use | Detailed for each country |
| Tariff Calculation Accuracy | Sometimes inaccurate or generic | Aligned with country-specific rules |
| Code Management | One code per product | Multiple country-specific codes |
Looking Ahead
As e-commerce continues to grow internationally, the ability to handle complex customs regulations becomes a critical advantage. Shopify's new HS code management feature is set to streamline global store operations, enhance customer satisfaction, and help merchants expand their reach with confidence.
