Growing your eCommerce business with international shipping

2022-10-25

Written by David Renwick

One of the best parts about taking your business online is the opportunities for expansion that open up.

eCommerce has greatly changed the way people shop, which means it’s also changing what they expect from your business. If a potential customer from overseas stumbles on your products through Instagram or Etsy or any of the other innumerable channels out there you’ll want a robust international shipping option to capitalise.

As you grow, you’ll want to make sure you’re able to offer the same quality services to both shoppers in your neighbourhood and those overseas. Having an international shipping strategy in place even before you’re ready to actually start branching out into these key markets is the key to turning these opportunities into wins.

Why offer international shipping?

The number one reason to offer international shipping is growth. To keep finding new customers and sharing your products with the world you need to have connections that go beyond your local market.

The rise of online shopping is a key driver of this potential for growth, with Statista finding that 80% of respondents will make at least one purchase online this year. It’s clearly something the majority of people are comfortable doing, which ties into some of the other major benefits of international shipping for businesses:

Benefits of international shipping

  • Reach customers around the world - Customers in other countries might not be able to find a local version of your product - or maybe they just like yours more!
  • Expand your customer base - If you’re in a niche market, you might quickly outgrow the demand from your local customers.
  • Improve your brand image - Be seen everywhere! Being recognised internationally can be a huge boost to your business.

Challenges with international shipping

However, you should be aware of the potential cons too when you’re thinking about international shipping. Some things to be aware of are:

  • Customs, import duties and VAT - The prices on your website might not reflect the final cost for the customer if there are import duties or other sales taxes.
  • International restrictions - Tariffs and other laws may prevent some of your products from being shipped entirely
  • Higher costs - Customers will have to pay for shipping, and you have to limit deals that offer free shipping on orders over a certain amount.

How to create your international shipping strategy

Once you’ve considered the pros and cons, you’re ready to start putting your strategy together. Here are the key considerations you need to run through to be prepared for success:

What will you ship?

When you’re starting out, offer a small selection of popular items for international shipping. You’ll also want to confirm product-market fit. One easy way to assess the demand for your product is by researching similar products on eBay and Amazon.

Where will you ship?

Are you going to open the floodgates or add new countries one by one? Check your site’s Google Analytics to see where your visitors are located.

Check local shipping regulations

Check for product import and/or export restrictions. You may be surprised to find out which products are not eligible for shipping. The categories of permitted goods range from reasonable, like aerosol cans and ammunition, to surprising, like nail polish.

Which couriers will you use?

We recommend using a mix of international and domestic carriers to ensure your customers get the best service, that’s why offer multiple courier support with our shipping solutions.

Do you have the right packaging?

Check to see if your current packaging options are robust enough to safely carry your products across the world - especially if you ship fragile items.

The next point is big enough for a section on its own and is probably going to be the biggest learning curve in your international shipping journey: Rules, regulations and customs.

Understanding rules and regulations for international shipping

This is going to be your biggest source of potential complications, but understanding what you can and can’t ship to specific countries is going to be key to offering effective international shipping options to your customers.

UPS - one of our many integrated shipping partners - has a great tool that’s invaluable for checking out import and export rules for all the countries they serve. It allows you to choose a destination and origin country and see which restrictions could affect your ability to ship items.

However, it also shows the sheer depth of rules governing international shipping, including guidelines for the following:

  • Prohibited and restricted items
  • Dangerous goods
  • Weight and size limits
  • Value limits
  • Invoice requirements
  • Correct import and export documentation

Having the correct Harmonized System (HS) codes on the orders you ship is a big step towards ensuring compliance with international shipping regulations.

These codes are international designations that tell customs inspectors what a package contains and which regulations it might need to conform to. They are very strict classifications that put products into specific categories, and even detail which material they are made out of.

However, despite being overseen by an international organisation, these codes vary slightly between countries so it’s essential to check these codes every time you start supplying to a new country. For example, our integrated shipping partner UPS points out that if you shipped a pallet of footballs to the US, you would use the Harmonized System code 9506.62.4040. If you simply copy and pasted the same code on a pallet headed to China, it would be rejected because they use a slightly different designation for that product.

Inventory management and international shipping

Shipping goods internationally can put considerable pressure on your stock management system – and generally requires an inventory management software tool to manage the added complexity.

For example, it’s important to keep a close eye on your stock levels to prevent under- or over-stocking. In a domestic market, you can often get away with a ‘just in time’ approach to stocking, ordering from suppliers only when you make a sale – or even drop-shipping, to avoid stock costs altogether.

When you ship overseas however, the longer lead times – and higher freight costs – mean you’ll likely need to hold stock of your own so that you can deliver to customers in a reasonable time frame.

This very quickly becomes a drain on your cash flow as money gets tied up in physical goods. It also adds a degree of risk to your business: what if you don’t manage to sell the stock you’ve bought? What if it somehow expires, or goes out of date or fashion? Throwing away valuable stock you can’t use is a painful and costly experience you won’t want to repeat.

A good inventory management system helps you manage all of these pain points. It does this by keeping your stock levels lean – while ensuring the items you can’t afford to run out of are always on hand.

Finally, an inventory management software system will let you track the stock you hold in multiple warehouses, wherever these are – including the warehouses of third parties like overseas distributors and logistics firms that may help you with international fulfilment.

How to plan for the cost of international shipping and customs charges

International shipping is also going to cost more. If you’re offering deals like “spend $50 and get free shipping” you’ll need to think about adding a disclaimer that it’s only for domestic deliveries or specific countries.

Setting up your international shipping on Shopify and other eCommerce platforms can help you manage your prices, but first you need to know what they are. Shopify provides some in-depth pricing guidelines on its website, making the point that pricing this service accurately involves more than just looking at what a courier will charge to ship the package. To manage the pricing of your international shipping, you should:

  • Use a rate calculator - For each country you want to ship to, check the size of the smallest package you’re planning to send and the largest item someone could order internationally.
  • Check your packaging - See if the cost of packaging changes for your international orders. Are you using more durable and more expensive packaging?
  • Choose a pricing structure - Will you offer a flat rate, carrier rate or deals like free shipping for orders over a certain value? This will depend on how consistent your shipping costs will be.
  • Consider a handling fee - If you and your staff are finding processing international orders is taking much longer than domestic, you might need to add further fees.

Then, there are customs fees. Extra fees like VAT when shipping to the UK can be an unwelcome surprise to customers. However, in most cases, paying these fees is actually the importer’s responsibility. That doesn’t necessarily mean you want them to pay, and part of offering a seamless international shipping experience for your customers will involve pre-paying these fees where possible.

DDP and DDU

Incoterms stands for International Commercial Terms and relates to how you manage the duties and taxes required when shipping orders internationally. The most common Incoterms in freight delivery are DDP: Delivery Duty Paid and DDU: Delivery Duty Unpaid.

It's worth noting there are many incoterms, but DDP and DDU are the main ones Starshipit supports.

What is DDP?

DDP (often referred to as Sender Pays Duty) should be used when you would like to pay the import charges, taxes etc on behalf of the customer. This is the incoterm used when your customer prepays their duty charges at checkout to you, the seller, so that when the package goes through customs they aren't charged again.

What is DDU?

DDU is the default for your shipments. This means the obligation to pay customs charges are on the buyer, rather than the seller. This means there’s nothing for you (the seller) to calculate at checkout. If you’re not sure which one you’re using, it will probably be DDU.

Watch our international shipping video

More of a visual person? Join Sofia from Starshipit as she breaks down some of the pros and cons of international shipping, tools you can use to make the process easy and the technical terms you need to know.

Watch on YouTube

Why you want a fulfilment automation tool like Starshipit for international shipping

It’s taken us a while to get here, and that’s one of the reasons you’ll want one, centralised and integrated shipping platform to help to manage delivery labels, shipping costs and all the other admin so you can focus on making the most of these opportunities for expansion.

With Starshipit, you can manage all couriers from one dashboard. This means you can easily use different couriers for domestic and international deliveries, without switching between multiple courier portals. This level of integration also means you’ll be able to show customers the shipping rates at checkout so there are no surprises down the track.

There’s also the sheer amount of time you’re able to save as Starshipit automates your customs documentation. In general, shipping automation lets you focus on running your business as efficiently as possible, with a host of other benefits which we’ll explore below.

Paperless trade for commercial invoices

Starshipit offers paperless trade for customers shipping internationally. This means you no longer have to include the commercial invoice on the package; you will only be required to attach the courier label. All of the customs documentation will be stored electronically and when it is scanned at customs the information will be displayed to customs.

Keep your customers in the loop with tracking pages and notifications

When customers are left in the dark about their orders, help desk queries spike. This gets even harder with international shipping, especially when customer queries come through after your staff have gone home for the day.

Automatic branded tracking pages and notifications keep your customers informed about where their orders are, giving them a consistent eCommerce experience and reducing help centre enquiries.

Branded returns

Managing your returns process isn’t easy at the best of times, and it can get even more complicated with cross-border shipping. This is another area where fulfilment automation can help, allowing your customers to self-service returns.

Starshipit lets you build your own returns portal with your company branding where your customers can generate their own returns labels, freeing up your staff.

How Lorna Jane uses Starshipit to make international shipping a breeze

Aussie fashion giant uses Starshipit to manage a global shipping operation, all from Australia. According to Global Operations Manager Danny Hancock, being able to ship using a variety of shipping carriers is key to their international success.

What’s more, it’s important for Lorna Jane to be able to offer customers a selection at the checkout – options when it comes to shipping carrier, service level and delivery timeframe. Starshipit makes it easy to offer these choices to customers.

“If you get a simple solution and the right partners, shipping internationally and shipping domestically doesn’t really change too much. It goes in that cage or it goes in the other cage basically. If you get your model right, it shouldn’t be that different.”
— Danny Hancock
Read the case study

Start shipping internationally today with Starshipit

As we said at the start, offering international shipping can open up a tonne of opportunities to expand your business, just as long as you’ve got a strategy in place for each step of the journey. With the help of an integrated shipping platform, you can greatly reduce the admin time and focus on looking ahead to your next market to conquer.

Get in touch with one of our team to book a demo, or start a 30-day free trial today (no credit card required).

David Renwick

David Renwick

David is Starshipit's Content Marketing Lead. When he's not whipping up a fresh new product update or chatting to customers for an exciting case study, you'll typically find him scoping out coffee spots and talking about what's on at the movies.

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