6 Key Considerations When Shipping Internationally
We kick off this post with a simple-yet-important question: Is your e-commerce business shipping internationally? If the answer is ‘No’, then we challenge you to consider this follow up: Why not?
If you’ve crunched the numbers or tested out new markets only to find that international shipping doesn’t make sense for your business – at least not yet – we get it. But if you’ve put off going global because you simply don’t know where to start, we think it’s worth taking a pause to reevaluate your international e-commerce strategy.
Shipping beyond domestic borders helps you increase your potential revenue by expanding to new markets and winning over fans around the globe. Even better? It’s probably not as difficult to get started as you might imagine.
Whether you’re still in the initial planning stages or just getting started, here are six key considerations to keep in mind as you begin shipping internationally:
#1: Figuring out where in the world to ship your products
For starters, keep in mind that “going international” doesn’t have to mean you’re shipping to every single country off the bat. In fact, many e-commerce merchants choose to start small with just a handful of international destinations, or even just one or two. After testing the waters, you can scale up to a broader international presence if and when it makes sense to do so.
To figure out where you should begin your international shipping journey, ask the following questions:
- Do you have demand from shoppers in other countries? Do you regularly get international traffic to your website, or do visitors reach out to ask if you’ll ship to their country? If so, these might be good places to start.
- What will your costs look like to ship to certain countries over others? Your international shipping fees will vary based on the type of items you’re mailing, the distance they’re traveling, when you need them to get there, and any local duties, taxes, or fees that might be assessed. Do you have enough margin to absorb these costs on your own? If you need to pass them on to customers, will demand still exist for your products?
- Should you ship on your own or work with a fulfillment partner? One way to bypass the challenge of setting up international shipping on your own is to work with a service like Amazon Global Selling or a local dropshipping partner. Consider the costs associated with these programs relative to the amount of volume you expect to be able to sell in a given country.
If that all sounds like a lot, one of the easiest ways to get your feet wet with international shipping is to start by mailing to Canada and Mexico. Both countries are serviced by a number of common US carriers, and their proximity to the US makes getting packages there quick and easy.
#2: Deciding which carriers make the most sense
If you decide to ship internationally on your own, one of the first decisions you’ll need to make is which carriers you’ll partner with.
As you might expect, some of the most common international services used by US-based e-commerce merchants are via USPS, UPS, FedEx, and DHL Express. However, there are a number of other international carriers that are worth a look, depending on your end destination, as well as what you’re shipping.
Be aware, however, that rates aren’t the only differentiator between US-based and international carriers. You’ll also want to determine:
- Whether or not the carrier ships to your desired destination(s)
- How long different carriers and services will take to deliver your packages
- What each carrier’s size and weight limitations are
- Whether the carrier offers any delivery guarantees
- Whether tracking and insurance are included in the carrier’s rates
It’s also a good idea to check whether discounts for each carrier are available through multi-carrier shipping solutions, such as Shippo. Whether you’re planning to eat the cost of international shipping, assess additional fees to international customers, or raise the costs of your products to compensate, any savings you can access via a best-in-class shipping solution will help your business’ bottom line.
#3: Understanding the rules and regulations
For e-commerce sellers who are new to international shipping, understanding the particulars around compliance can feel daunting – and failing to properly understand international shipping regulations and restrictions can lead to extra costs, undelivered packages, and frustrated consumers.
Generally, international shipping compliance involves the following steps:
- Prepare your commercial invoice and customs declaration documentation: A commercial invoice is the physical document used to declare your items for customs purposes, while a Customs Declaration is the process of declaring the items that you are shipping across international borders. When declaring items, it is critical that you are not vague in describing your item – if the Custom Agency is unable to determine what is in your package, they reserve the right to hold it for clarification, return the package, and/or discard the package. Examples of vagueness include descriptions such as “gift”, “bottle”, “box”, or “supplies”. To ensure your package successfully makes it way through customs, please be descriptive as possible and do not leave your description open to interpretation. Keep in mind that for shipments going to the EU, you’ll want to be particularly descriptive. Starting March 1st, 2023, nations in the EU will require the HS code for your product to pass it through customs. If you don’t have that on hand, you’ll need to describe what your item is, what material its made of, and what its used for.
- Ship your package: After you’ve shipped, your package will be then imported by the destination country. Once it arrives, it will be processed through the customs brokerage in your destination country.
- Custom fees – import taxes and duties – are assessed and due: Customs agencies use the commodity, quantity, value, country of manufacture, and other factors to determine duties and taxes charges for international shipments. Customs fees are added on after a package has been sent by the customs agencies of the sending and receiving countries. The customs fees must be paid either by the sender or the recipient, a this is determined by the incoterm that you select when you do your customs declaration. Shippo, for example, supports three options that you can select: DDU (Delivery Duties Unpaid), DDP (Delivery Duties Paid), and FCA (Free Carrier).
However, because the specific steps required vary based on carrier, country requirements, and the kinds of items you’re shipping, merchants who are just beginning to ship internationally may want to work with a partner who can make document preparation feel less daunting. For example, Shippo offers paperless trade (PLT) support for some UPS, FedEx, and DHL Express shipments. If your shipment is eligible, PLT makes it possible to submit customs documentation electronically, saving you time and helping to speed your package through the customs inspection process.
#4: Knowing your international insurance options
Because shipping internationally adds a new layer of complexity to your deliveries, it’s important to have the right insurance on your packages. As you consider standard carrier and third-party insurance offerings, ask yourself these questions:
- Does the insurance provider cover international shipments?
- How much insurance do I need, considering the value of the item I’m shipping?
- How does the pricing for this insurance amount vary across providers?
- What does the process of filing a claim look like with each provider?
If you’re thinking about purchasing insurance through a third-party provider, make sure you understand how their coverage overlaps with the basic insurance provided by many carriers. At Shippo, for example, we offer discounted insurance through Shipsurance — and because their coverage extends past the first $100 of a shipment, you only need to file a single claim (vs. filing a separate claim with the carrier).
#5: Keeping track of the international shipment journey
How important accurate tracking is to you and your customers may also influence the carriers you use for your international shipments, as well as the specific services you select.
USPS Priority Mail International Small Flat Rate Boxes, Flat Rate Envelopes, and Canada Post Small Packets, for example, don’t come with tracking information. Tracking information for USPS First Class International shipments is available, but may not be reliable. Tracking, in general, may not be available for shipments to some countries, depending on the strength of their local logistics capabilities.
All of that is to say that, if accurate tracking is a must, you’ll want to confirm in advance that your carrier of choice can guarantee it.
#6: Navigating international returns
Finally, there’s the question of international returns. You did everything right to get the package there — what happens if your customer wants to return it back to you?
Beyond simply returning items to their origin address, you have a few options here, including:
- Allowing customers to keep their items and then writing off the cost, if the expense associated with returning them outweighs the value of the inventory.
- Assessing return shipping and restocking fees to offset the cost of returning the merchandise.
- Storing returns locally in the destination country until you have enough items to qualify for bulk shipping discounts to get them back to you.
As with the other considerations described above, the right decision about how to allow for international returns will depend on a number of factors that may impact your specific e-commerce business model. Carefully evaluate each alternative based on your company’s unique circumstances as you venture into the world of international shipping to determine what makes the most sense, and what will scale with your business as you grow.
If you’re just getting started and have questions about shipping internationally, our international shipping experts are happy to answer your questions and help guide you through the process – simply get in touch with our team to learn more, or sign up for your free account to get started on your own international shipping journey.