We've been talking a lot about cross-border ecommerce lately, and one of the most important global ecommerce strategies is certainly international shipping. As we've discussed in the article on Ecommerce Logistics, receiving the product is probably the single time your customer will somehow interact physically with your store.
International shipping has become a key area of importance over the last few years. With the largest export markets for US companies being Canada ($300B), Mexico ($200B), and Brazil ($44B), there is immense scope in shipping innovation driving further efficiencies.
As online sales keep giving brands more and more the ability to expand globally, it becomes critical to fully exploring audience development, payment integration and logistical challenges.
We get that the international expression may make the whole thing look really complicated. Of course, not fully understanding the international shipping ecosystem dynamics will certainly make shipping across seas a much harder job. But, we are here to try and make it simpler for you to successfully ship your products to another country.
So, what do you need to know?
Well, prior to considering international shipping you must ask yourself whether there is an adequate demand for your ecommerce internationally. Does your brand translate well when going to new countries? Do you need to change anything about your product before it enters a new market? If you don't know the answer to these questions, I strongly suggest you to read the linked articles above.
If you are all set, keep reading this post.
The differences between local and international shipping
One of the main differences comes down to cost (obviously). Where it’s expensive to ship internationally, it is far cheaper to ship something on-ground locally. According to Statista, cost is a significant driver for not only the customer but the business owner as well. Margins are affected by inefficient shipping models and the product’s reach may get affected due to unforeseen complexities.
Local shipping isn’t as complex as international shipping as well. While shipping locally has a greater advantage over phone and email, international shipping may take multiple routes of interconnectivity before reaching the right package route. You may not have real-time updates about packages, and may not be able to inform customers about delivery estimates.
In order to revert this situation, there is a range of barriers that ecommerce companies must consider and overcome to become successful.
The challenges to international shipping
The delays in shipping, last minute documentation requirements, clearance issues and red tape make international export a tough process.
You can obtain the cheapest international shipping rates, along with the cheapest way to ship internationally, but if your package doesn’t arrive on time then it has a negative effect on the brand.
Not only during holiday seasons, but also during peaks and valleys, ecommerce merchants must be clear about how long the product may take to arrive at its final destination .Also, offering various shipping options to customers is essential. These options must match the actual time to deliver, as international shipping companies may have different policies in different zones.
International shipping tracking is another issue that must be agreed upon from the very beginning. Certain times, suppliers may claim that the tracker got lost or a shipment wasn’t available for checking, and may ask you to go on “their word” or “trust”. So, when considering an overseas shipping option, review all tracking documentation and information that the vendor is willing to share with you.
Tracking may not seem like the most important factor when it comes international shipping, but if customers begin to ask about their package and you can’t answer them right back, it will have significant negative impact and your customers may never return.
That's why tracking technology should be provided right from the get go.
Pricing structure & fees
Many merchants aim to reduce international shipping fees however these fees are important to ensure that the shipments arrive on time and are exactly as shipped. Pricing that reflects quality should be selected over others who focus on reduction in amenities. Merchants must check all international shipping rates before committing to one partner for all deployment requirements.
Different vendors have different technology as well. Therefore, the pricing should reflect the technology being offered to the customer. For instance, if there is the utility of one-day express delivery with full tracking and mobile notifications, then the international shipping model would naturally be more expensive than others.
It’s important to check all documentations prior to shipping or selecting a route of shipping, as you need to have all the checks and balances prior to agreeing to international shipping rates.
This step also concerns the emission of invoices. Countries in Latin America, for instance, have some of the strictest business-to-government invoicing mandates. However, they have increased transparency when it comes to regulations and taxation. Ecommerce exporters have to simply go through all the rules for their particular products and create a matching invoice for their product range.
The bill of landing requirements in a country like Brazil are quite complex, but essential to enforce stricter rules on exporting companies. With innovations like e-invoicing, fleet checks and shipment compliances, ecommerce exporters can be rest assured that their shipment is safe and secure.
Most Latin American countries have also adopted RFID technology to track all shipments via the internet, to ensure that there are no lost packages or shipment delays.
Despite all of these facts, Latin America have increased transparency when it comes to regulations and taxation. Ecommerce exporters have to simply go through all the rules for their products and send an invoice for each one of them.
It is important to study each market individually, since each country has its own particularities. While everything is online, these added checks and measures go a long way into instilling faith back into exporting ecommerce products.
Some of the main issues that ecommerce owners face is the complicated tax and compliances codes. Each region may have its own tax requirements, so the tip here is to study deeply each market taxes regulation to understand what will be charged of you or your customer. In any case, either the buyer or the seller pays the taxes as duties either to international shipping companies or local ones.
Another important fact related to compliance is if yout product is allowed to be shipped to the country you are aiming. Each region has its own restrictions, so do your research before shipping or even announcing your product in another market.
When considering the best areas to expand towards, international warehousing costs is a key factor. Normally the cost to have international storage and local suppliers is very elevated, so merchants must create additional resources or go for a ecommerce business model that doesn't require foreign warehousing, reducing costs.
Partnering with the right people in the new market is important, as it affects how your product will be seen via their logistics, supply chain or online store experience. For instance, if drop-shipping in a new country, you’ll need to analyze how the user experience is in the new country. If it’s the same, then you have the right partner to scale with.
When reviewing international shipping destinations, you must review the payment options that are offered in that country.
When considering a international payments partner for countrieslike China and Latin America, you need to review all options available as each partner will have their own fees and services. Some will help you grow over time, others might prefer working with bulk orders.
When choosing a payments partner, you must consider what the local habits are of the consumers. If they prefer cash over credit, then you must offer that payment option to them on the ecommerce store. E.g. Latin American consumers prefer multiple modes of payment that offer them best convenience.
Companies that ship internationally
Finally, partnering with the right exporters is key. When international markets can be complex and difficult to understand, logistics partners like EMS, USPS, AIRMAIL, FEDEX, UPS and DHL help exporters to get the best international shipping rates, along with more control over international shipment tracking.
When considering international shipping companies to work with, you can work with a whole host of options. With state run carriers you have reliability and standardized delivery.
However, with international players like FEDEX, UPS, and DHL you have more power, when it comes to communication and tracking. Depending on your international shipping needs, you can go with a partner that has exactly what you’re looking for.
In the USA, UPS and FEDEX control around 80% of the package delivery market. See which one is best for your business in the article FedEx or UPS. However, For customers wanting to opt for faster delivery services and innovative customer solutions, FedEx is the leading player with its core services like:
- International Priority: 1 to 3 business days, with delivery by 10:30 a.m. or 12:00 noon;
- International Economy: 2 to 5 business days, delivery by the end of day;
- International MailService: 4 to 7 days (premium), or 7 to 11 days (standard);
- International Ground: 2 to 7 business days
Shipping prices range differently for package size, and distance travelled. It can go from about 6% of total cost of goods to almost 15% if you’re going for an international carrier.
While there are many companies offering different packaging and shipping costs, it is important to analyze all the costs involved. As an example, if we ship a 1lb package with the dimensions of 5 inches x 5 inches x 5 inches, there are multiple companies that can offer some competitive prices on shipping.
Cheapest among them that ship from NYC to Sao Paulo Brazil are USA Address that charge $40. DHL and FedEx cost considerably higher but provide more security for packages being delivered to Latin American countries.
Special Orientations for the USA
Merchants from the USA can count on the Air and Ocean Freight Forwarders and NVOCC’s such as AEL, that create a sense of calm in rough waters by helping exporters with more information about their tracking and shipping. Certain partners and vendors have key relationships with local region experts that can handle bulk and niche shipping as well.