Wednesday, August 21, 2019

Here’s How StockX’s New Luxury Import Fee Could Change Seller Behavior

Last week, StockX introduced a new luxury import duties fee of 15 percent for non-US sellers. All international accounts were alerted to this new policy via an email that outlined the exact changes being implemented and why. According to the email, “Items valued at over $800 USD that are shipped from outside the US are subject to import taxes. This charge was not previously included in the transaction price. However, a pricing model that is inclusive of all regulatory costs is necessary in order to facilitate a truly global marketplace.” Because each country has its own VAT (value-added tax) rate, usually ranging between 10 and 20 percent, and import duties, StockX’s analysis of all costs incurred in the past showed that 15 percent is the average.

Yet international sellers are charged this fee on all sales, regardless of the destination of their product. This means that a European seller selling to a European buyer is still charged the luxury import fee because StockX’s algorithm currently works based on the bid-and-ask system and can’t automatically distinguish between a buyer and seller’s location. The EU’s single market and customs union, however, means there are no tariffs on goods moved from one member state to another, meaning a sneaker shipped from France to Portugal incurs no import tax.

A quick look at how the StockX change affects selling the “Satin Black Toe” Nike Air Jordan 1, for example, indicates just how big a difference the extra 15 percent fee makes. Selling internationally for $799 nets you $691.62 after the 9-percent transaction fee, 3-percent payment processing fee, and shipping costs. But bumping that price by a dollar to $800 adds $120 worth of luxury import duties fee, making the final payout $572.50.

It’s too early to tell exactly how this will affect buying and selling habits on StockX, but there are a few possibilities. Sellers could raise their prices to offset the 15 percent fee, leading to higher prices across the board. Or perhaps sellers might take their products to rival platforms such as GOAT or KLEKT, reducing the stock available on StockX. On the other hand, it could, for items valued around the $800 threshold, lead to sellers dropping their prices slightly below $800 to avoid the extra fee.

While StockX has introduced the new fee for sellers, buyers have historically been charged what StockX calls an “import duties and processing” fee. It’s likely that this fee only comprises VAT and a cut to StockX for acting as the middleman. So while the name of that fee suggests otherwise, the costs associated with importing and exporting an item are wrapped up in the fee StockX has introduced on the seller side.