Ready to go global? Follow these six steps to shipping your products overseas without blowing your budget.
There are lots of upsides to running an eCommerce business – especially right now. Today, eCommerce is booming, and it’s expected that 3.8 billion people will be shopping online by 2023.
Many of those shoppers will be buying products from overseas – and this is another benefit to running an online business: a bigger pool of potential customers.
But if you’re considering selling your products globally, you’ll need to think about international shipping.
Small business coach Alison Morgan has helped a number of businesses expand internationally, and says that once you’ve decided which countries to focus on, it’s worthwhile asking yourself a few key questions:
For example, any breakable products will need extra care and will incur extra shipping costs, so smaller, sturdier products tend to work best for international shipping.
Will shipping overseas create problems that your business isn’t ready to handle?
For example, do you have enough staff to research the international shipping process and handle the extra traffic and strain on your supply chain? Do you have enough product to sustain new demand?
For example, if your products feature plugs, you may need to change the adaptor plugs and be aware of voltage differences.
"It’s important to think strategically for growth."
These initial questions will help form your growth strategy for expanding internationally. That strategy should cover all aspects of international shipping, including:
· Shipping restrictions
· Shipping carrier and costs
· Customer shipping (and returns) policy
· Any additional duties and taxes
“It’s not uncommon for businesses to want to expand overseas before they are ready,” she cautions. “So, it’s important to think strategically for growth. Make sure it’s not your ego wanting to expand overseas, and that it’s a smart strategic move forwards for you and the business.”
Before you ship a single package, check the regulations of the country to which you are sending it.
There may be restrictions or red flags relating to the materials your products contain, their use, or the quantity you’re permitted to ship. For example, if you’re shipping to the United States from Australia, you are not permitted to send animal products, including honey.
You can also visit the individual government websites of the country to which you are shipping, to check for any prohibited items or items labelled as “dangerous goods” in that region. For example, if you’d like to ship to New Zealand, their government website clearly states their regulations and restrictions, or if you are interested in shipping to Germany, their government website has a section on shipping goods from within the EU as well as outside the EU. Often your shipping carrier can provide further assistance if you are finding this challenging.
There are a variety of international shipping options to choose – from your local in-country post company to larger global organisations such as FedX, DHL and Sendle. There are also a variety of medium-sized carriers that specialise in specific regions, such as Yodel in the UK, and PackSend in Australia. Or MyUS which specifically ships from the UK and the US to Australia.
It may serve you better to work with a variety of shipment partners for different products or regions; perhaps one shipping partner has competitive costs for shipping to the UK, but their prices for the US are more expensive than competitors. You may want to partner with one company for a specific region, and another for separate destinations, so that your prices are more competitive.
Aside from cost, some of the qualities to look for in an international shipping carrier include:
Their range of services
For example, can they plug in or connect directly to your website? Do they offer quality customer service and do they provide end-to-end tracking notifications for delivery?
Increasingly, customers want to track the progress of their goods. In the US in 2019, Dropoff courier services reported that 85 per cent of consumers will buy from a retailer again if they can track their purchases throughout the delivery process.
The shipping carrier type (overland, sea or air)
Some products are more suitable for particular types of travel. For example, shipping via sea can be cost-efficient but slow and unsuitable for perishable goods, whereas some products, such as fireworks, pesticides and aerosol cans can’t be sent by air.
Their company values
If you are a business that prioritises sustainability, you may want to partner with a carrier company that limits the environmental impact.
Their ratings and reviews
Check reviews from other small businesses – and customers, too.
A recent study found that 48 per cent of consumers who abandoned their shopping cart did so because the cost of shipping was too high. So, reducing that cost is good business.
When you are calculating the total cost of shipping, include any packaging costs (including labels and tape), courier costs to collect the package, extra import/export fees, duties and levies you might be charged and, of course, cost of labour. To reduce those costs, look at reducing the weight and size of the box and try offering a range of carriers with different shipping times.
Calculating shipping costs also means researching duties and taxes. Many countries have enforced “De Minimus” values, which is the threshold at which you must start paying duty tax. For example, in Australia, that value is $1000AUD, and in the US it’s $800USD. Check De Minimis in the country you are shipping to with this table created by the Global Express Association.
Once you know your shipping costs, you’ll need to decide upon your customer-facing shipping policy. This will also need to align with the customer service offered from the shipping partner you choose. Some questions to ask are:
Will you offer “free shipping” or flat-rate shipping? According to Digital Commerce, 17.5 per cent of online retailers offer free shipping on all orders, and 65.4 per cent offer free shipping at least some of the time. For free shipping, the costs will need to be absorbed into your product pricing, so consider if this will make it a less attractive offer compared to your competitors? For flat-rate shipping, will that make your shipping prices seem high compared to competitors in some regions?
Could you offer a range of shipping fees? For example, some companies offer free shipping for standard shipping timings, but then charge for expedited delivery. You may also need to use two different shipping carriers for this, as not all carriers offer express postage timings.
How will you handle returns? Returns are an increasingly big issue for eCommerce businesses, especially in fashion, and you will need to clearly set out your policy on your website. Be aware that some countries have regulations about returns policies, for example in the European Union, you must accept a return in 14 days, whereas in Australia there isn’t an official time limit. For more information on this, UPS has a good shipping and regulations online tool.
Another option to consider, either to save money or time, is sourcing a fulfilment partner in the country you are shipping to. A fulfilment partner is a third-party logistics provider who can handle your inventory for you, manage order processing and then also take care of shipping and delivery.
This can be especially time- and money-saving if your products come from another destination (for example, China) as they can be directly delivered to your fulfilment partner instead of being double handled.
This option can also reduce shipping times for the consumer as goods have less distance to travel. Most fulfilment partners will integrate seamlessly with your website and take care of everything from the moment of sale onwards (including in most cases, returns).
Recommendations and reviews, pricing, customer service strategies and the ability to offer inventory management infrastructure are all aspects to consider when choosing the right partner for your business and the region you are expanding into.
When shipping internationally, you may need to create new labels for your products.
For example, if you’re shipping consumables, you might have to add specific ingredient or nutritional advice to your labels for certain countries. Or perhaps your product is called something different in another country. For example, napkins (Australia) are called serviettes in the UK, or soda (US) is often called fizzy drink in the UK, and soft drink in Australia.
This may make creating new labels a necessity, and while this doesn’t directly link to shipping costs, it will add additional costs to international orders – which will need to be factored into the overall product or shipping pricing.
Sign up for Cross Border Trade
Working in different currencies, banking systems and exchange rates can be daunting. That’s why Afterpay has set up Cross Border Trade for Afterpay merchants and customers. With Cross Border Trade, customers can select to pay for products using Afterpay or Clearpay and see a clear breakdown of the product payment plan in their local currency. Once they check out (in their local currency), Afterpay pays your business the full amount of the purchase, minus the merchant fee in your local currency. It couldn’t be easier.
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