Expanding into an international market is an exciting endeavor. As technology evolves, the world continuously becomes smaller, allowing even small businesses to conduct international trade.
However, the first foray into international shipping can be a learning experience. It's not uncommon to have a negative experience that shapes your future with international shipping. You can avoid costly mistakes and take a logical approach to this new business channel by learning from those who have traveled this path before you.
Here are crucial things to know if you're shipping internationally for the first time.
Consider Your Overall Process Flow
When you get down to it, shipping internationally is just another system in your business. Before you get started, it's important to consider how it will fit into your overall process flow. When you start shipping internationally, that means dealing with customs, determining the best way to send money internationally, and clarifying your supply chain process and costs.
As you go through the process of shipping internationally for the first time, document everything. These notes will become the foundation of your standard operating procedures (SOPs) for future shipments. You can use your process and learnings from this experience to adjust and delegate as your company grows.
Understand the Restrictions
One of the biggest barriers of shipping internationally is understanding customs. Many large international trade businesses employ a customs compliance officer full-time to handle the communications and the regulations surrounding their products. For small businesses, this dedicated professional isn't an option.
Before you ship internationally, take some time to research and understand the border restrictions the recipient's country has put in place. Depending on the nature of your product offering, your home country may also require certain documentation.
Many international shipping companies offer resources to help you determine the specific customs requirements based on your shipment's destination. Additionally, there are often customs compliance services to either consult with you or handle the paperwork for you.
Clarify the Costs
International shipping costs can be a sticking point as you grow your business. Finding the best possible pricing options to deliver your product safely and efficiently is the key to success.
Start by clarifying what costs are involved, shopping around, and comparing rates as needed. Start by comparing rate calculators, using domestic sales data to clarify the weight and dimensions of your packaging, then plug in the numbers as an international order. It can be helpful to evaluate a range based on both larger and smaller packaging sizes to see if there are opportunities to cut costs.
Using multiple carriers is an innovative way to cut back on shipping costs, though it adds complexity to the supply chain. It's also important to consider product tracking and insurance.
Understand Your Customs Declarations
As mentioned previously, customs is often the biggest hurdle to international shipping. Beyond knowing the regulations around what one country allows versus another, it's also important to understand the declaration process.
When you ship a product to another country, you must fill out customs declaration forms that classify your product. Every separate package will require declaration forms, and missing information could shelve your parcel for weeks. It's integral to claim everything that's in the package, down to the free samples you've thrown in as a marketing ploy.
For those who use foreign suppliers, it's also important to note the correct country of origin (COO) - this is where things get tricky. If you sell candles that have been crafted in the USA then shipped to Canada, where you adhere to custom labels and sell them overseas, your country of origin could be either. Some customs regulations base the COO on how much of the product is created in one country, while others are more ambiguous and allow the COO to be the country where the product obtained its "essential character."
Again, working with a shipping service that offers customs support is a wise choice when getting started.
Consider the Customer Experience
To find success when conducting business internationally, you should always consider the customer experience. Express shipping may cost you more, but waiting for longer may impact customer satisfaction. Similarly, you'll also need to determine how your business will handle duties and import taxes.
Many companies choose to let customers cover the import duties on their end. If you take this route, it's vital to be clear that they may be presented with customs fees upon delivery. This shipping practice is the default and known as Delivered At Place (DAP). Being presented with customs fees can create immediate dissatisfaction with customers, tarnishing your business relationship before you've had a chance to build trust.
Consider switching to a Delivered Duty Paid (DDP) strategy, in which you're responsible for collecting the duties and remitting them upfront. The benefit of this strategy is that customers will see the fees as soon as they transact, allowing them to back out if desired. While it may seem like a counterintuitive business strategy, it promotes transparency and trust.
Pack for Security and Simplicity
When you ship internationally, good packaging becomes even more important. You must pack your belongings in a way that keeps them secure and prevents damage while also allowing for ease of unpacking and repacking.
When your product goes through customs, the officials retain the right to open your package and check on the contents. While they do make an effort to repack properly, the simpler your approach, the better.
Analyze Your Barriers and Opportunities
Once you've navigated the international shipping process, take a look back at how everything went. Consider the barriers you encountered and the success opportunities for next time. It's also worth determining if marketing to foreign countries and expanding in this way is right for your company.