Growing your eCommerce business with international shipping

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.

Table of contents

• Why offer international shipping?
• How to create your international shipping strategy
• Understanding rules and regulations for international shipping
• Inventory management and international shipping
• How to plan for the cost of international shipping (+customs charges)
• Why you want one platform for international shipping
• How Lorna Jane uses Starshipit for international shipping
• Start shipping internationally today with Starshipit

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:

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.

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.

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.

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.

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