In 2015, international online trade reached one trillion dollars. This marker indicates the importance it has to many businesses. E-commerce makes up 20% of this global trade. Many companies are still hesitant to undertake shipping internationally, due to a number of complex factors. Here we simplify these aspects.
When determining shipping rates – what it is going to cost you to ship your products – most logistics companies will have a calculator designed for these calculations on their websites. You will need to weigh and measure your packages for this. Look for a logistics company that ships to the destination country. Compare several logistics companies’ quotes before deciding which one to go with. Find out if they will give you a discount for bigger shipments. This way you can send more packages at a reduced price. Some companies only ship to certain countries whereas others will ship anywhere in the world. This will also affect shipping costs.
Customs Clearance and Import Taxes
Getting goods cleared at customs can be daunting unless you have a logistics service provider that can use their expertise to streamline the process. A product valued at a certain amount in the USA could be far more expensive in the importing country. Whoever collects the goods will have to pay this, which could be the customer or a representative from your satellite branch in that country. Find out in advance how your product will be taxed. Make sure this information appears on your website.
Customs in the receiving country will check that an item is not restricted, and that duties and taxes have been paid in full. All paperwork must be correct for your country and the receiving country. Any problems will delay the product reaching the customer.
An importer of record is someone with an import license. This person can help you get your items through customs. If you do not have an office in the country of import, you will need to determine who will carry out this role.
Pricing Your Product
Determine your price after you have considered all the added costs of global shipping. You have two options: the customer can pay the shipping costs, or you can offer free shipping. Many customers will pay a higher price for a product with free shipping.
Before deciding on free shipping for all your products, take into account that including the costs in the price will make the product too expensive. Always make sure that you will make a profit at the price you set.
There are four ways to transport a product: road, rail, air, and sea. With international shipping, all of these are possibilities across the same continent. However, delivering products to other continents limits you to a choice between air freight and sea freight.
Airfreight is the quickest of the two modes of transport. If the customer wants the product within days, make sure your pricing reflects the added costs as it is more expensive.
Many customers would rather opt for sea freight due to its lower cost and will be willing to wait several weeks for their products to arrive.
Some products may not be transported by air freight. Goods are also limited to a certain total weight that a plane can carry. There is also the question of being a responsible business in terms of your carbon footprint, which favors sea freight.
As the saying goes, under-promise and over-deliver. This is especially pertinent to global shipping. Build in the time to clear customs, for bad weather conditions, and other potential delays when giving your customer an expected time of arrival (ETA). Up until the ETA, the customer will not be concerned but if delivery goes beyond this, the customer will become frustrated. This could result in bad reviews for your company for something you have no control over. Make sure all your paperwork is in order so that this does not contribute to delays.
E-commerce does not permit any transportation of specified goods such as alcohol, poison, fuel, fresh food, perfume, and ammunition. Some goods are limited. While your country may allow certain items, the receiving country may prohibit them as illegal. Check first before agreeing to ship a product that may be banned in the destination country.
You may have taken care of all the other details, such as customs clearance, paperwork, delivery timelines, and pricing. However, if you have not complied with package and packing requirements, or the goods are packaged inefficiently, you risk delays, incurring escalating costs, and damage to your goods. Here is another area where the logistics company can assist you.
In the event that your products get damaged or lost, you will need insurance to protect your company from losses. It may seem like a saving you can make by not obtaining insurance but if something goes wrong, the costs will be far higher. Don’t ever skimp on insurance.
It is possible to get shipping completed on a tighter schedule by paying more for the service. Cheaper shipping takes longer. Finding the right balance between costs and time is tricky but this knowledge is acquired by experienced logistic companies.
International shipping is complicated but is a vital way to expand your business. With a better understanding of the factors involved, you can look to a logistics service provider to assist you with their skills and knowledge gleaned in the field. Take the leap to grow your business beyond its current ceiling.