Why even do this? Stick with US ePacket and that's that.
Otherwise you get a lot of chargebacks, high FB ad costs, a lot of unhappy customers and looooong shipping times, lots of trouble handling returns and what not.
Iceland is part of the EEA as well, so people can return items by the law, even if nothing is wrong with the item. It's just a lot of BS that you dont need, doesnt matter where are you located, just direct your business to United States.