rwp80
Newbie
- Dec 29, 2017
- 1
- 1
Hi all! I registered here because I'm looking to start dropshipping and during my research I kept stumbling back to this forum!
I've noticed a lot of mentions of problems (namely chargebacks) when importing into Brazil.
I am part Brazilian myself, now living in Europe. I have worked in Brazil in an international company that continuously imported products into Brazil, so I hope to shed some light on the issue to help you guys out. I worked in the supply chain department of the company, and I heard plenty of horror stories from our imports team about the Brazilian customs process. Many times I had to actively get involved with some of the backend work to help get items released to our company.
The best way to start to explain this is to give you an idea of the Brazilian politics, culture, and economy - All major factors that influence Brazilian law and regulation, including customs and importation.
Brazil is a third world country. Sadly, it is rife with corruption on all levels. This does not mean that you need to engage in illegal practices to do business there - In fact I would strongly advise against such practices. However, it is a major cultural factor that affects how policy is formed and even how the government operates in general. This has a knock-on effect that pushes for convoluted regulation that looks great in theory, but is generally horrible in practice.
Put simply, the government have a general policy of stifling imports to encourage domestic industry and commerce (to make it easier for Brazilians to compete instead of losing out to Chinese-made products).
If the importer really insists on bringing foreign products into Brazil, they'll pay hefty tax fees at customs.
As mentioned above, the pipeline for importation into Brazil looks fine in theory, but the practical reality is that when an imported product arrives at Brazilian customs, it falls into essentially a 'black hole' until it comes out the other end when collected from customs by a local courier working in conjunction with the international courier company.
For example, major international courier company ABC would collect the item from China, ship it across the world till it arrives at Brazilian customs. They would then pass responsibility of the delivery to their local Brazilian affiliate courier, XYZ, to handle local customs and the final stage of delivery to the client.
XYZ will be an established local company that has rapport with customs, but even they would struggle to get any definitive answer about the processing time. It is all too common for items to get queued up into a backlog at customs, especially around the December holiday season. This is not only due to supposed increases of imports for the holiday season, but also due to customs being short-staffed during the holiday season.
Just checking random items on AliExpress I see that items to Brazil are listed as 40-60 days shipping.
This is a major gamble, because due to the hit-and-miss nature of Brazilian customs timeframes. This is accentuated in part by the fact that people maybe placing orders in the run-up to Christmas, falling precisely into the holiday season backlog queues mentioned above.
If you're shipping to Brazil (or any other country with infamously unreliable customs timeframes, such as Nigeria) then you would be wise to advise the customer in advance that the stated shipping time is optimistic and subject to further delays depending on their country's local customs processing. If the customer sees this warning and proceeds with the purchase, then they are accepting the additional unpredictable delays. You can guarantee that it will arrive at customs well within the 40 days, but then it's anyone's guess as to how long it will take to reach their doorstep.
As I said, I haven't started dropshipping yet, so I don't know how you would deal with that kind of problem.
Another of the Brazilian government's off-the-cuff attempts to preserve wealth in Brazil is the implementation of restrictive money exportation. To be clear this means moving money from Brazil to another country.
If you're exporting products made in Brazil, the government will poke you with a relatively tiny tax fee and whisk the product straight out of the country with a kiss and a blessing.
But if you're sending money out of Brazil in any way, shape, or form, it will be subject to massive percentage-based taxation, possible delays, and likely scrutiny - All regulatory mechanisms designed to discourage money leaving the country. Financially, you can think of Brazil as a 'money black hole'. Money goes in easily, but is very difficult to bring out.
This is a struggle for everyone from large businesses down to the individual level. Brazil has banks and 'international' credit cards just like everyone else. Brazil has PayPal and other reputable worldwide financial service providers just like everyone else. But do you think it's easy to use these services internationally? No such luck!
These companies are Brazilian copies of the actual international versions. They are owned by and/or affiliated with the international counterparts, but technically they are separate entities altogether, for example: "PayPal do Brasil Serviços de Pagamentos Ltda"
Every single time anyone wants to make an international purchase from Brazil, their bank or entity company (PayPal, Western Union, etc) takes the transaction, performs a currency exchange to the foreign currency, charges the customer pre-agreed exchange fees, then executes the transaction internationally.
Sounds straightforward, but it isn't. The financial entities are subject to Brazilian law and are extremely strict in the processing of international purchases to avoid anything that could, even in the most tenuous perspective, amount to an illegal purchase. I have been blocked in the past from trying to purchase credits for a video game and even trying to put as little as US$20 on a US casino website due to the Brazilian laws against gambling. This is an excellent example of the double-standard nature of Brazilian culture and politics - Gambling is illegal, except for massive national lotteries which are so commonplace that there are even "Lottery Houses" (Casas Lotericas) in every city and town!
As a dropshipper, when you receive a chargeback from Brazil, I would not be surprised if it is actually the bank or finance company blocking the purchase. If you receive chargebacks from Brazil it is probably worth contacting the customer to check if it was them that cancelled the purchase, or if it was the bank or financial service provider making the cancellation due to the hit-and-miss international financial policy. If the bank / FSP made the cancellation, it is almost certain that they did not inform the customer who may mistakenly think the product is still coming to them.
Again, I am not yet a dropshipper so I have no idea how to deal with this in dropshipping terms, but it is definitely worth taking into consideration.
Well... That's all I have to say for now. I hope this helps clarify the situation with Brazilian importation.
TLDR version:
1. Brazilian customs are horrendously slow, especially around December-February. You can't guarantee 60 days to a Brazilian customer.
2. Brazilian financial policy makes it horrendous to send money out of the country. It may be the bank / service provider cancelling the transaction, not the customer - In fact, they probably won't even know it's been cancelled!
I've noticed a lot of mentions of problems (namely chargebacks) when importing into Brazil.
I am part Brazilian myself, now living in Europe. I have worked in Brazil in an international company that continuously imported products into Brazil, so I hope to shed some light on the issue to help you guys out. I worked in the supply chain department of the company, and I heard plenty of horror stories from our imports team about the Brazilian customs process. Many times I had to actively get involved with some of the backend work to help get items released to our company.
The best way to start to explain this is to give you an idea of the Brazilian politics, culture, and economy - All major factors that influence Brazilian law and regulation, including customs and importation.
Brazil is a third world country. Sadly, it is rife with corruption on all levels. This does not mean that you need to engage in illegal practices to do business there - In fact I would strongly advise against such practices. However, it is a major cultural factor that affects how policy is formed and even how the government operates in general. This has a knock-on effect that pushes for convoluted regulation that looks great in theory, but is generally horrible in practice.
Shipping Time and Costs
Put simply, the government have a general policy of stifling imports to encourage domestic industry and commerce (to make it easier for Brazilians to compete instead of losing out to Chinese-made products).
If the importer really insists on bringing foreign products into Brazil, they'll pay hefty tax fees at customs.
As mentioned above, the pipeline for importation into Brazil looks fine in theory, but the practical reality is that when an imported product arrives at Brazilian customs, it falls into essentially a 'black hole' until it comes out the other end when collected from customs by a local courier working in conjunction with the international courier company.
For example, major international courier company ABC would collect the item from China, ship it across the world till it arrives at Brazilian customs. They would then pass responsibility of the delivery to their local Brazilian affiliate courier, XYZ, to handle local customs and the final stage of delivery to the client.
XYZ will be an established local company that has rapport with customs, but even they would struggle to get any definitive answer about the processing time. It is all too common for items to get queued up into a backlog at customs, especially around the December holiday season. This is not only due to supposed increases of imports for the holiday season, but also due to customs being short-staffed during the holiday season.
Just checking random items on AliExpress I see that items to Brazil are listed as 40-60 days shipping.
This is a major gamble, because due to the hit-and-miss nature of Brazilian customs timeframes. This is accentuated in part by the fact that people maybe placing orders in the run-up to Christmas, falling precisely into the holiday season backlog queues mentioned above.
If you're shipping to Brazil (or any other country with infamously unreliable customs timeframes, such as Nigeria) then you would be wise to advise the customer in advance that the stated shipping time is optimistic and subject to further delays depending on their country's local customs processing. If the customer sees this warning and proceeds with the purchase, then they are accepting the additional unpredictable delays. You can guarantee that it will arrive at customs well within the 40 days, but then it's anyone's guess as to how long it will take to reach their doorstep.
As I said, I haven't started dropshipping yet, so I don't know how you would deal with that kind of problem.
Brazilian Closed Financial Policy
Another of the Brazilian government's off-the-cuff attempts to preserve wealth in Brazil is the implementation of restrictive money exportation. To be clear this means moving money from Brazil to another country.
If you're exporting products made in Brazil, the government will poke you with a relatively tiny tax fee and whisk the product straight out of the country with a kiss and a blessing.
But if you're sending money out of Brazil in any way, shape, or form, it will be subject to massive percentage-based taxation, possible delays, and likely scrutiny - All regulatory mechanisms designed to discourage money leaving the country. Financially, you can think of Brazil as a 'money black hole'. Money goes in easily, but is very difficult to bring out.
This is a struggle for everyone from large businesses down to the individual level. Brazil has banks and 'international' credit cards just like everyone else. Brazil has PayPal and other reputable worldwide financial service providers just like everyone else. But do you think it's easy to use these services internationally? No such luck!
These companies are Brazilian copies of the actual international versions. They are owned by and/or affiliated with the international counterparts, but technically they are separate entities altogether, for example: "PayPal do Brasil Serviços de Pagamentos Ltda"
Every single time anyone wants to make an international purchase from Brazil, their bank or entity company (PayPal, Western Union, etc) takes the transaction, performs a currency exchange to the foreign currency, charges the customer pre-agreed exchange fees, then executes the transaction internationally.
Sounds straightforward, but it isn't. The financial entities are subject to Brazilian law and are extremely strict in the processing of international purchases to avoid anything that could, even in the most tenuous perspective, amount to an illegal purchase. I have been blocked in the past from trying to purchase credits for a video game and even trying to put as little as US$20 on a US casino website due to the Brazilian laws against gambling. This is an excellent example of the double-standard nature of Brazilian culture and politics - Gambling is illegal, except for massive national lotteries which are so commonplace that there are even "Lottery Houses" (Casas Lotericas) in every city and town!
As a dropshipper, when you receive a chargeback from Brazil, I would not be surprised if it is actually the bank or finance company blocking the purchase. If you receive chargebacks from Brazil it is probably worth contacting the customer to check if it was them that cancelled the purchase, or if it was the bank or financial service provider making the cancellation due to the hit-and-miss international financial policy. If the bank / FSP made the cancellation, it is almost certain that they did not inform the customer who may mistakenly think the product is still coming to them.
Again, I am not yet a dropshipper so I have no idea how to deal with this in dropshipping terms, but it is definitely worth taking into consideration.
Well... That's all I have to say for now. I hope this helps clarify the situation with Brazilian importation.
TLDR version:
1. Brazilian customs are horrendously slow, especially around December-February. You can't guarantee 60 days to a Brazilian customer.
2. Brazilian financial policy makes it horrendous to send money out of the country. It may be the bank / service provider cancelling the transaction, not the customer - In fact, they probably won't even know it's been cancelled!
Last edited: