It’s really hard to believe how rapidly the world is shrinking nowadays. Isn’t it? People can easily travel the whole world almost in the span of a single day, messages can be sent instantly between countries, and sending packages overseas via international shipping has become easier and more affordable for all.
Today, majority of the ecommerce retailers sell globally. However, some retailers, especially SMBs (small and medium businesses), stay away from selling and sending beyond their own countries or borders, possibly due to some logistical and other related concerns such as international shipping. But, sending the products or goods outside the country shouldn’t be a barrier to expand your business globally.
How to Ship Your Goods Internationally:
Documentation to Destination
Shipping products internationally is much easier than most people think. Some simple online processes can guide you to create international shipment as well as generate the documents (customs) as you go.
You can also reuse product details and saved addresses from previous international shipments. It gets easier and faster the more and more you ship.
Before You Actually Begin
Accuracy is certainly the “key”. You can avoid regular customs delays by managing these crucial details when you are ready to start.
There can be some additional questions or information prior to delivering the goods, so you need to make sure to provide correct email addresses and phone numbers for both, the receiver and the shipper.
Description of Goods
You need to be specific about the products of your shipment such as what it is; the materials the good is made from; what it is used for; and the country of origin. For example, organic cotton baby t-shirts; size - large; origin - the United States. These important details reduce the risk of holds for impacting delivery or customs delays and enable more comprehensive documentation.
Value of Goods
You need to enter the purchase price on the unit basis of the goods being shipped. However, the price should be in the purchase currency.
Why Should You Ship the Products to Other Countries?
Commitment for shipping your goods internationally requires preparation for it. It’s quite challenging, but not a bigger challenge than starting your business. Some online retailers in the United States hesitate to ship their goods to some other countries just because they feel the expenses may outweigh their expected revenue. However, it’s certainly a wrong concept.
If you take a well-researched decision, you can easily reach to your customers all over the world and become successful in it.
Are you interested to learn the procedures of international shipping? Well, please read on!
Part One: Products and Packaging
Ensure That the Product is Shippable
You’re definitely aware of your domestic shipments and the package restrictions for it. However, when it comes to international shipping, size and weight limits will often vary from country to country.
There are different product categories that the certain carriers don’t transport internationally. For example, FedEx doesn’t ship fine jewelry to another country. And you cannot ship nail polish internationally via USPS.
On top of that, all the countries have some specific restrictions on certain products or goods. For instance, you cannot ship any type of playing cards to Spain, Greece, or Denmark. At the same time, you cannot send eyeglasses to Uruguay or bells to Italy.
Prepare Your Packages for Passage
Mailer tube, envelope and each box you ship are going to have a number of stops on the way to the ultimate destination. However, majority of the domestic purchases have only a few temporary stops before reaching to the destination. There can be different types of travelling such as boats, trucks, plane, etc., in international orders. So, it’s important to put extra effort during packaging in cross-border shipments.
You need to evaluate the fragility, value, and weight of the products of each and every package. It’s important to remember that powders and liquids require special packing for shipping overseas. Check out whether the goods have any packaging requirements and fulfil international regulations.
The goods of the customer undertake a long journey, so it’s essential to make a safe reach.
Part Two: Taxes, Documentation, and Duties
VAT (Value Added Tax) and Duties
VAT (Value Added Tax) - also known as GST (Goods and Services Tax), is a fee that sellers and merchants are imposed or charged on international sales. The amount is calculated using a percentage (fixed) for all types of contents and every international shipment. You can consider the amount as a sales tax. You’re already aware that total VAT varies significantly between countries.
A duty - also popularly known as a tariff, it’s a must pay for tax retailers for cross-border selling. Like Value Added Tax (VAT), countries use different percentages to calculate their duties. But, instead of using a set, single percentage, duties are often calculated based on the quantity and value of the contents being imported plus any insurance and the cost of shipping.
There are basically two types of duties: DDP (Delivery Duty Paid) and DDU (Delivery Duty Unpaid). The merchant is liable for all applicable fees and duties with DDP. The merchant receives a bill as the total amount is paid upfront by its carrier.
In the case of DDU (Delivery Duty Unpaid), the recipient (i.e. your customer) must pay the duty.
In the case of DDU, the customer (i.e. your recipient) must pay its duty. If you decide to go with the DDU route, please make sure it’s clearly shown on the checkout page.
Tips: A few countries impose only Value Added Tax (VAT), others charge only duties and a majority of countries apply neither.
You’ve to determine how much VAT and duties a country would impose on your total costs. If you can calculate the financial impact of it, you will able to determine and adjust the prices for customers in those specific countries. Additionally, you will realize whether it’s worth to sell to those countries or not.
Required Documents for Customs
1. Commercial Invoice
You can use commercial invoice to evaluate the value of goods (goods can be baby boy urban clothing, or anything else), and calculate taxes, customs and duties. The document needs to list some specific information such as name and address of the recipient; name and address of the retailer; terms of payment and sale; item quantities, prices and descriptions; and mode of the transport.
2. Export Packing List
A cross-border shipment is more comprehensive type of a domestic or local shipment packaging list. An export and international shipment packing list specifies the carrier information, mode of transport, and the quantity, dimensions, weight, and the types of packages in the shipment in addition to the standard details included on a regular packing list.
3. Certificate of Origin
It confirms the country where goods in shipment were manufactured, produced, and obtained. The certificate must be signed by the retailer and it may be certified by Chamber of Commerce (local) in some cases.
Part Three: Comparison of Shipping Carriers
For U.S. merchants, there are 4 prime carriers which are: DHL USPS, FedEx, and UPS. These carriers have their own specific key advantages described below in brief:
DHL: The carrier is expert in international shipping and customs
USPS: Offeers generally a cheaper international shipping option for ecommerce
FedEx: The carrier specializes in urgent and relatively shorter period delivery options for merchants, such as 2-3 day delivery and next-day
UPS: The service provider has offices in almost all the countries, which means the carrier can manage international shipping from the warehouse of the merchants straight through to the customers
As you determine the options, consider two things: 1) What is actually non-negotiable, and 2) Which points you are ready to compromise on. If you realize your flexibility in some aspects such as delivery speed and costs, you may easily choose the most suitable carrier for your business.
International shipping is growing day-by-day and countless packages are being delivered across borders every day. Here is a list of the points that you need to know when you go for international shipping.
Know Who You Are Shipping to
It sounds like a no-brainier and not necessary, but it’s important. Fraudsters are everywhere and they can conduct scam from any country. They sometimes use email to build up relationship with merchants, but they don’t have any intention to reimburse or perform work as per agreement. Many international scams occur via wiring money, and they want to get involved with tangible items as well.
Know What You Are Shipping
Certain products may seem to be acceptable or harmless for domestic shipping, but carriers such as FedEx, DHL USPS, and UPS have specific regulations that they must follow for international shipping.
A common instance is lithium powered electronic devices. You can send multiple laptops through some services domestically, but you can send only four cells or two batteries internationally. However, these batteries should be installed in the devices they supply power to. A small cactus can be another example. You may ship it domestically, but you may not be able to ship them internationally. However, everything depends on the specific countries you ship to.
Know from your carrier about the eligibility of goods for shipping
Every country has its own regulations, so each country has its own list of products and what items they will accept. For example, you can rarely ship used clothing to Mexico. Sometimes shipment depends on where the product was manufactured or produced that might stop it from entering the desired country. The political situation also can be another variable.
There are many variables, and it’s really difficult to track all of them. So, how can you be sure that the items will be delivered to the intended country? Well, this is quite difficult, so it’s essential to discuss with the carrier you’re using for shipping internationally. The shipping carriers have all the required paperwork and updated records for shipping your package.
Know About Your Documentation
Different products need different kinds of papers. Commercial invoice is the most common among them. A comprehensive list of the receiver, sender, list of items as well as country of origin and value should be included in the paperwork.
SED (Shipper’s Export Declaration): This document is essential when the value of the customs exceeds $2,500 or you should have an export license for it. You will also require this document if the package is subject to ITAR (International Traffic and Arms Regulations). However, you can be exempted from license requirements in case of sending rough diamonds (HTS 7102.31, 7102.21 and 7102.10). If you want to ship to Iraq, Iran, Cuba, Syria, Libya, Serbia (not Kosovo), North Korea and Sudan, you will require filling out that form.
US Census Bureau controls the regulations for the Shipper’s Export Declaration (SED) and it regularly updates it. You can find a complete list of its requirements and regular updates from different online portals.
NAFTA (North American Free Trade Agreement) Certificate of Origin: This agreement is applicable for the shipments between the US, Mexico, and Canada. You will require NAFTA document if you send goods to these countries and the customs value of the items exceeds $1,000.
EEI (Electronic Export Information): EEI document is needed when the merchants ship electronics and the customs value of the items exceeds $2,500.
Compare About the Payment When Ship Internationally
There are different options when you ship overseas. It’s essential to know about the price of different services as there are several providers. The major carriers are DHL, USPS, FedEx, and UPS. DHL is expert in international shipping and customs. USPS is a cheaper international shipping option for eCommerce. FedEx specializes in urgent and relatively shorter period delivery options for merchants, such as 2-3 day delivery and next-day. UPS has offices in almost all the countries, which means the carrier can manage international shipping from the warehouse of the merchants straight through to the customers.
International shipping is quite challenging, but you don’t need to be worried about it. You can find the best international shipping providers by searching online. There are many reputed service providers everywhere, so it’s important to find the most suitable one for you. Wishing you to find the right service provider for your needs!