Selling online in Bermuda: duty and shipping

Two questions come up in almost every online store we build for a Bermuda business: do I have to charge customs duty at checkout, and what do I do about shipping? The first has a short answer that surprises a lot of people. The second is really a question about your customers, because the person deciding whether to buy from you may well have a forwarding account and a calculator.

First, one piece of rubbish to clear away: offshore shipping calculators confidently list a Bermuda VAT of 15%. Bermuda has no VAT and no sales tax. What it has is customs duty, paid when goods enter the island, and that difference is the whole shape of the problem.

Duty happened before your shop opened

If you sell physical goods in Bermuda, you almost certainly imported them, and duty was paid when they landed. The general rate is 25% of the value, some categories sit lower or at zero, a few sit dramatically higher, and there is no minimum below which it goes away. The authority on your category is the Customs Tariff, published by the Customs department on gov.bm, and it is worth looking up rather than assuming, because the spread between categories is wide enough to change a business model.

The consequence for your online store: duty is part of your cost of goods, priced into the number on the product page. It is not a line at checkout. A Bermuda customer buying from a Bermuda shop pays your price and that is the end of it.

So your checkout stays simple

Merchants arrive expecting duty calculators, customs integrations and tax tables. A Bermuda store selling to Bermuda customers needs none of it. No duty line, no tax line, no customs paperwork per order. The complexity most e-commerce platforms are built to handle is complexity Bermuda does not have. What your checkout does need is a payment gateway that works with a Bermuda bank, which is its own subject.

Delivery inside Bermuda is a smaller problem than the platforms assume: your own drops, a local courier, or collection. The part customers judge is whether the promise on the page holds, so only make one you can keep.

The maths your customer is doing against you

Your customer’s alternative to your shop is a forwarding account, ZipX and its competitors, which hands them a US address, flies the parcel down, clears it through customs and bills them at the door. Plenty of Bermudians shop that way as a matter of course.

The overseas sticker price your customer is comparing you against is not the price they end up paying, and on these numbers the gap is around a third.

That gap is the room a local shop has to price into. Price against what the import actually lands at rather than against the sticker, and say so on the page: in stock, here tomorrow, no bill at the door. The $200 duty-free allowance applies to goods a resident carries home in their luggage, not to anything shipped, so it does not close the gap either.

If you ship overseas

Selling out of Bermuda inverts everything: your customer’s country charges its own duties and taxes on arrival, those are the buyer’s problem, and the carrier’s paperwork handles the export side. Say clearly on the page that international orders may attract the destination country’s charges. Beyond that, an exporting Bermuda business should have a real conversation with a freight forwarder, because rates and reliability vary enough to matter.

What this means for the build

The tax machinery most platforms ship with can be switched off, and the effort moves to pricing, payment and the delivery promise. That has been the shape of the stores we have built here. What a website actually costs in Bermuda covers the build side in real numbers, and if you are weighing up a store, tell us what you sell and we will tell you what it takes.