International shipping is the means of transporting goods from one country to another through sea routes or air channels. It is a crucial tool for businesses to capture newer markets and expand their global footprint. International shipping lets e-commerce businesses access a wider customer base and introduce shoppers to many foreign brands.
What is International Shipping?
The process of importing and exporting goods between different countries via different sea routes, air, or roads is known as international shipping. International shipping is a complex process of freight shipment across the borders of different nations. Shipment of freight across borders requires many permissions, and businesses that offer international shipping options must comply with these rules and regulations to pass customs clearance. Thus, procuring essential licenses and permissions is crucial to international shipping.
International shipment is more complex and intricate because it goes beyond domestic borders and involves foreign countries. For this, the shipment and the processing involved should also be per the rules and regulations of said country. Some countries have liberal policies, whereas some have stricter policies when it comes to goods that can be imported.
Apart from the laws, rules, and regulations, other factors affect international shipping and make it even more complex. Different currency values, time zones, and language barriers make international package shipping challenging.
How Does International Shipping Work?
The concept of international shipping became famous with the rising popularity of e-commerce. However, the best way to grow your customer base is to offer affordable and good-quality overseas shipping.
Here is a series of steps that will provide a clear concept about the working of international shipping and its process.
The international shipping process is not entirely different from domestic shipping. It may differ in a few areas based on the rules and regulations of other countries come into the picture.
If your business contemplates how to ship packages internationally, follow these enumerated steps:
- Order placement: The first and foremost step in international shipping is order placement. A shipment will only take place when the customers place an order for the same.
- Order fulfillment: The company and its desired 3PL pick and pack partner will continue the order fulfillment process with a shipping label. Such a shipping label will require customs clearance.
- Order shipment: The desired order will be taken to a shipment center or a post office from where the order will be shipped. The shipment center separates domestic packages from those international shipment packages.
- Export orders: The orders are sold by the destination countries that arrive via air, water, or road. The mode of shipment will depend upon how much the company is willing to pay and how fast the delivery needs to be done.
- Import order: The packages and shipment will arrive at the destination country, where the customs officers will check the contents of the packages and compute the corresponding taxes and monetary values. The recipient will have to pay the taxes and the desired fees.
- Order notification: The customer will receive a notice that they have a package for pick up and delivery. Once the package is cleared from customs, the delivery partner will pick it up and prepare it for delivery.
- Order delivery: In this stage, the packages are duly delivered according to the norms and standards of the destination country. The recipient may have already paid the customs fees during checkout. Most e-commerce stores collect customs and handling fees as a part of the shipping cost. If the recipient still has not paid the customs fees, the parcel will be returned to the country from where it was shipped.
Why is International Shipping Important for E-commerce?
Global reach is essential to any business, especially when it comes to e-commerce in today’s business arena. An e-commerce company that can deliver products to different countries regardless of regulations and geographical boundaries is what international shipping is all about.
E-commerce businesses constantly look for avenues to growth and international shipping provides the opportunity for that growth. Businesses operating in traditional markets cater to a specific area and a specific customer base that always buys from them. That’s not the case with e-commerce, making it even more critical for e-commerce businesses to have the global presence that international shipping brings into the fold.
There are many benefits that e-commerce businesses get from international shipping, including:
The global reach of the brand
Global shipping helps increase the customer base as more people know about the brands and opt to get the products. Being a new player and entering newer markets can help e-commerce businesses fulfill outstanding market demands and surprising product feedback. International shipping offers the advantage of global reach to a brand.
Increase in sales
It is quite evident that as more people know about a specific business or a brand, more people will opt to buy products and try them for the first time. As international shipping increases the reach of an e-commerce business, it also boosts sales as more customers will recognize the online store during their buying journey.
Minimize order returns
With international shipping, e-commerce businesses generally opt for Investing in a reliable shipping partner. This is to ensure that shipments have to go through a series of customs checks and clear them. With a reliable shipping partner, transparent product and shipping information, and thorough quality checks in place, international shipping streamlines order deliveries with care. This in turn increases order fulfillment and reduces order returns.
Avoids product saturation
E-commerce businesses can ship the same products to a country they have already shipped to per the order requirements. International shipping helps avoid product saturation, eventually growing e-commerce business and increasing customer demands.
Therefore, these are the major beneficial points that international shipping provides, especially to e-commerce businesses.
Six Tips to offer better International Shipping for your E-commerce business
International shipping process is instrumental in helping an e-commerce business attract newer customers and establish its presence overseas. These are the six effective tips to remember if your e-commerce business takes up international shipment.
- Measure, weigh and pack correctly
It is imperative to ensure that a business involved in international shipment properly measures the product quantity being delivered across the border. The measurement includes the weight and quantity of the product. It should be done before processing the international shipping since many custom checks mandatorily require information about product dimensions.
The most crucial aspect of e-commerce international shipping is packing the correct product. It should never be that the customer asked for one and the seller sent another product, packed incorrectly.
- Calculate costs and charge customers appropriately
The costs should be appropriately calculated and charged, so the customer does not feel cheated. To benefit the seller, they must include the taxes and customs charges with the product’s retail price as they have shipped the same across the border.
- Inform customers about any possible additional charge
The max retail price, the price of the product, is the basic charge that the customer must pay to the seller for the product. As far as international shipping is concerned, there will be additional charges that come with the cost of the shipment. This could include VAT, import fees, customs clearance fees, and duty charges that must be paid at the destination nation. So the customers must be informed beforehand about the additional charges for their delivery.
- Estimate international shipping time
The time required for international shipping is another crucial aspect sellers should look into. The shipping carriers and international logistics providers you partner with should have a reliable shipping fleet that offers safe and speedy shipping services. Customers should be informed of the estimated arrival time before receiving their delivery. The estimated time, though, should not be unnecessarily prolonged.
- Consider shipping insurance
Shipping insurance is where the sellers get reimbursed if their delivery or parcel is lost or damaged in transit. E-commerce businesses should consider shipping insurance as it will reduce losses or at least cover up a maximum portion of the damages the company will have to bear in case of an in-transit mishap.
- Order tracking
Like any innovative and efficient e-commerce business, it is essential to provide customers with the order tracking feature. The order tracking feature should be available to both domestic and international customers so they can track their orders from time to time and be assured that their orders are safe and will arrive on time.
Pricing Structure in International Shipping
Different companies follow different types of pricing structures when dealing with international shipping. The difference in pricing structure also impacts the business in various ways.
The primary pricing structure in international shipping is stated and explained as follows:
It is seen worldwide that consumers love companies providing free international shipping delivery programs. Free shipping, as the name suggests, is the pricing structure that does not charge any extra money other than the price of the commodity to ship the product across the border and internationally.
The companies that offer free shipping policies generally bear the customs charge or other taxes themselves, and the customers need not pay these charges and, thus, qualify for free shipping.
Although, some companies have a minimum purchase policy to qualify for free shipping. But these minimum purchase values are very reasonable and can easily be achieved by consumers, making free shipping accessible.
Carrier rate shipping
The carrier rate shipping is a pricing structure also known as real-time shipping. How much international shipping costs is very much based on its real-time shipping value. The system smartly and conveniently calculates the shipping rates based on rates set by standard couriers and delivery providers in the destination country.
It is a system where the package weight, the dimension of the package, and the addresses are taken into consideration while calculating the international shipping cost. It is also known as one of the cheapest ways of shipping internationally because the larger or, heavier the parcel is, the higher the price, and the smaller packages have lower shipment costs.
Flat rate shipping
Flat rate shipping is a type of shipping where the box size determines the package rate. Any weight can be shipped within the exact cost as long as it fits the size of the box and is under the maximum weight. It is an easy and affordable way of shipping internationally that encompasses letters, envelopes, or lightweight packages.
Flat rate shipping encompasses the idea of only the size of the box when calculating the shipping charges. This process is considered one of the best for international shipping.
These are the major pricing structures followed by most businesses for global shipping, considering the international shipping rates, and by e-commerce businesses as well.
Additional Charges in International Shipping
It is known that shipping internationally includes additional charges such as taxes and customs charges that would not apply if the shipment was within domestic boundaries. Such extra costs depend upon the shipment’s value and the destination country’s regulations.
These additional charges can be broadly classified into two categories, stated as follows:
Duties and taxes
It is essential to consider the duties, taxes, and additional charges when any business is calculating the international shipping cost. Except for the product’s price, it is also important to include these extra charges the seller bears to send the package abroad as desired by the customer.
These duties and taxes vary from country to country depending upon their laws and regulations and the kind of shipment to be shipped to another nation. So to save the time and effort of both the seller and the recipient, knowing how to calculate the cost of the product including the additional charges, is crucial.
The duties and taxes are imposed to generate revenue and protect the laws and regulations of the destination country. The most important is the customs charges. The customs officials verify the shipment and then only decide whether the recipient is allowed to take it or not.
Along with the customs charges, goods and service taxes and value-added taxes are common in most countries while exporting or importing goods. These essential duties and taxes must be borne either by the seller or recipient in the case of international shipping.
Handling charges are terminal handling charges, the prerequisite fee, or the amount of money taken by the terminal authority to handle the parcel or delivery at each port during loading and discharging.
The handling charges vary from port to port and country to country because each port has a different structure to handle payments. Generally, the terminal handling charges for exports are collected from the shipment authorities when signing the bill of landing after customs clearance. Whereas the carriers typically charge the import handling charges when the consignee issues the delivery orders.
International Shipping Times: How Long Does it Take?
International shipping time depends on various essential concepts such as the shipping cost, availability of products, and the route to ship the delivery. In international shipping, fast shipment does not come cheap. So, it is clear that if the recipient wants fast delivery or the shipping company wants to ship in a hurry, they have to opt for expensive shipping methods. This implies high shipment charges because they would like to send the delivery by air.
On the other hand, if there is enough time for the recipient to receive the product after waiting a few days, the shipping company may ship the products by sea or ocean, and the shipping cost will be considerably low.
Although different companies have different shipping partners, the delivery receiving time also depends on the shipping partner’s efficiency. Thus, it is vital to have a reliable shipping partner for the customer to receive their products early and to add positive customer reviews to the company portal.
Things to Consider for International Shipping
As a business wants to grow worldwide, it is crucial to focus on certain things before shipping globally. Specific essential points are:
Ship only authorized goods
It should be noted that only goods that are authorized for shipment should be considered. If any business or shipment company is shipping unauthorized goods, it will be bad for the company’s reputation, and result in legal proceedings.
Shipping source and destinations
While considering international shipment, it is vital to know the shipping source and destination. After properly identifying the shipping source and destination, it will be easier for any company to calculate the shipping time, distance, and cost.
Packing is integral to any business, be it international or domestic shipment. The product must include sufficient packing so that the product it contains is protected and doesn’t incur any damage during transit. Choosing the right packing material and adequate packing ensures that the recipient receives the package in good condition.
Documentation for international shipping
International shipping generally involves a lot of documents owing to the nature of the shipping journey. The business and the shipping partner must ensure they have all the essential documents required for international shipping. Those documents include a packing list, certificate of origin, certificate of free sale, inland bill of lading, airway bill, etc.
International shipping regulations
Each country may have its own set of international shipping regulations, but some basic guidelines remain constant across multiple countries. Regardless of the mode of shipment, that is whether the products are shipped via air or sea, these regulations apply.
Countries may have a ban on importing items that may cause harm to its citizen, may disturb their agriculture, may cause destruction to the carrier during transit, disturb local economies, or require authorization from the government. Generally, these include products like alcoholic beverages, aerosols, weapons airbags, dry ice, cigarettes, etc.