Looking to expand your business internationally but not quite sure where to start with international freight and shipping? We’ve got you covered!
These days, customers expect businesses to ship internationally. Sure, there are a number of considerations to make but international shipping is a great opportunity for your brand to increase profits by reaching new customer segments. We’ve put together a guide that outlines what your business needs to think about before deciding to go global and ship internationally.
If you’re in need of help on the ground
Looking for support on the ground to make moving into a new market work for your business? Using local agents based in-market might just be what you’re after. These local people are worth their weight in gold as they’re usually accustomed to the relevant country’s port requirements. Agents act as representatives of suppliers and receive a commission based on sales value. Meanwhile, suppliers receive orders from buying agents and then fulfil the orders. In a nutshell, it’s their job to make your transition into the market as smooth as possible. Depending on your specific needs, they’re capable of undertaking various roles on behalf of your business - think of them as your company’s eyes and ears on the ground.
While agents are generally a fairly cost-effective option, there can be tax implications and you never know if they may be selling competing products.
Key considerations include:
- Does the agent have good networks and contacts? Do they know the right people?
- Are they experienced in your particular sector?
- Are they capable of becoming your one point of contact on the ground? That means taking care of everything from keeping time logs of all commercial activities to liaising with the receiver of the cargo/supplier of the cargo to taking care of any other necessary ancillary services.
If your business is growing quickly
If that describes your business, more than likely, you’ll be looking to test the new market in question quickly, making third party warehousing and fulfilment a great avenue to explore. Once set-up with your logistics company, things get much simpler and in many cases, all orders will be sent directly to your logistics company to take care of packing/shipping. So, what are some pointers for choosing a logistics company?
Our top two tips include finding a logistics company:
Who specialise in the same or a related industry
Already have similar clients onboard
Warning: choosing a company solely based on their pricing is dangerous. While cost is always going to be important in business, finding a company who is the best fit for your business’ needs is vital.
Fulfilment by Amazon (FBA)
You should also note that Amazon has a service to help you with shipping around the globe (of course they do!). They have one of the most advanced fulfilment networks in the world, FBA.
It works like this:
Store your products in Amazon’s fulfilment centres
They’ll pick, pack and ship your order
They also take care of the customer service side of things
In our books, FBA is a great way to scale your business and reach more customers than ever before. Learn more about FBA here.
If your business is new to shipping and needs a rundown of all considerations to factor in
Consideration #1: what are you shipping?
Most brands have a large number of product listings and items but you don’t necessarily want to ship all of these products overseas.
It’s important to consider which items will appeal most to an international market while also factoring in:
Weight: the lighter the item, the more cost-effective it will be to ship out
Durability: anything too fragile may not last the journey in one piece
Another important consideration is the country’s and /or region’s rules and regulations. Some countries do not allow certain items full stop, while others may have limits. Also keep in mind whether your items may be deemed ‘dangerous goods,’ which do vary from country-to-country. Your best bet is the relevant country’s Government website when checking this.
Consideration #2: shipping locations
Where you’re shipping from
Important factors here include how many items you plan to ship and where your warehouses are located for each line of stock. This is likely to determine where it’s reasonable to send products to.
Where you’re shipping to
Every business is unique and while there are some standard best practices, determining whether your products are a good fit for a certain market requires a lot of homework and looking into consumer and market trends. A good starting point is to use Google Analytics to check what regions and countries outside of Australia people are visiting your site from. Additionally, think about the main languages people speak in areas of interest as communication comes into play in terms of your team being able to provide great customer service. As a general rule, starting small and shipping within a vicinity that is fairly close is a good idea when starting out. As they say, better safe than sorry!
Consideration #3: delivery method
Consumers expect quality and timely delivery so deciding which shipping carriers you go with is vital. Your choice will boil down to:
Save money by using multiple carriers or consider postal carriers. The latter can be slower and fail to offer many options in terms of packaging types and speed of delivery. While express carriers are more reliable and offer insurance, they’re going to be more expensive. The best advice we can give you here is to take your time, do you research and try to connect with other brands already shipping to that particular area for guidance and advice.
You’re always going to have customers willing to pay extra to receive their orders quickly and others who are happy to wait. Consumers have become accustomed to selecting from a range of delivery options, in-line with what best suits their needs. Anything less isn’t likely to go down well.
Tracking and protection
Consider tracking so both you and your customers will be able to easily recieve up-to-date shipment statuses and as meationed above, to overcome corncerns of goods or packages becoming damaged or lost insurance is the best way to go.
Consideration #4: costs
We’ve already touched on costs briefly but it’s a major factor when we talk about international shipping on a couple of different fronts. While you don’t want to overcharge your customers, you shouldn’t be footing the bill for 100 per cent of shipping costs as it’s not sustainable in the long-term. To make the best possible decision, following these steps.
Step 1: Use online rate calculators
Getting a good sense of pricing for international shipping can be tricky. A Google search will reveal a number of rate calculators for carriers that you can use. You’ll want to look at both your smallest and largest domestic sales numbers to determine whether it’s cost-effective to ship products to a particular location.
Step 2: Determine your pricing
Have a think about your pricing structures for global shipping. In general, brands adopt either free shipping, carrier rate shipping (allows your customers to choose their preferred option) or flat shipping rates (standard rates charged regardless of weight or size). Whichever method you select, it needs to be both cost-effective and enticing to your customers. While free shipping may be a great drawcard for customers, it simply may not be affordable.
Step 3: Consider adding handling charges
Packing items for international shipping is different to packing them for domestic travel. They require more care and ultimately, more resources and possibly more materials.
It may very well make sense to add handling charges once you consider:
Duties, customs and taxes
Often, shipping globally involves customs, duties and additional taxes (unfortunately). Each country is different so again, you really need to do your homework so that you can arrive at an informed decision.
Tariffs or taxes levied by a Government on imported goods are what we call customs. As above, this varies from country to country so you’ll need to work on a case-by-case basis.
Duties (again) and taxes
These are levied on the international selling of goods and involve a number of factors including customs forms. They’re calculated differently in each country with the key factors involving the quantity/value of the items shipped, the cost of freight and any relevant insurances.
All in all, choosing to ship your products internationally is a positive step for any business to expand its growth and reach. As outlined above, it’s important to undertake extensive research and chat with those in the know (if you can) about how to best go about shipping internationally.
Feel free to contact Woven for any assistance you require for your business’ global shipping and freight needs.