I mail-ordered an instrument from Guitar Center some weeks ago, and even though they're not exactly famed for being the best place to buy from, they now have a setup in place which makes customs a breeze. Basically they handle everything. You pay your local VAT (and duty, if any) up front, to GC, and also any additional charges. They handle customs (or rather, they have a deal with FedEx would be my guess). Instrument arrived on my doorstep a few days earlier than their estimate, and I got a text message to my phone when the package was loaded into the truck that was about to deliver it to me. No getting stuck in customs, no additional fee from FedEx in the mail.
From my calculations the exchange rate was just fine (I paid in my local currency), the extra charge for customs handling was a bit lower than what FedEx would have charged locally, and, best of all, I paid the exact VAT that I should - when the local FedEx and UPS guys handle this they artificially inflate the value by 10-20% before they calculate VAT.
And BTW, the exchange rate used is the exact rate of that day, when I pay VAT the "old" way customs will use a rate from a table, it's often a month old. The way the currencies fluctuate you may end up paying VAT on a dollar value completely different (usually higher) than what you thought you would. All that is gone with the method GC is using - you see exactly what you pay, and they guarantee that there won't be any additional charges.
I think there are a few other companies starting to do the same as well.
When that's said, the way MGM is shipping also works very well for me - it goes via USPS and the local mail carrier here handles VAT which I pay when I pick up the package. The extra charge is there but not too high, and it doesn't get stuck in customs either. They do use the 'exchange rate from an old table' method though. This is not so important for the price range of any ukuleles I might buy anyway.