Practical Ecommerce

International Shipments Worth the Effort

One of the greatest attractions of an online business is the vast number of customers that the Internet allows a retailer to reach. Web surfers from all over the world can navigate beyond the boundaries and borders that exist in the physical world to find the products and services that they are looking for. While this presents an incredible opportunity for retailers, international shipping can be confusing and intimidating due to many regulations and restrictions imposed by countries and the shipping carriers themselves. However, by understanding these requirements, you can master the challenges of shipping across borders, and effectively expand your sales horizons.

Import Restrictions by Receiving Countries

The first challenge to shipping internationally is the restrictions that may be in place for the country that you want to send to. Each country has different restrictions with regard to what products are allowed into the country and which are not. For example, France will not allow cigarette lighters that use butane gas into their country. Before making products available to customers online, it is important to understand what the restrictions are. The United States Postal Service website provides a list of prohibitions and restrictions for each country. If your product is prohibited or restricted in a certain country, it is important to notify your customers on your website of these limitations. This is the first step in avoiding confusion and customer service issues related to international shipping.

International Shipping Documents

Once you have determined that you are able to ship to a certain country, there are required documents that will accompany the shipment. International shipping documents will take extra time to prepare and many online retailers, in fact, collect an extra handling fee to cover this time and effort. At a minimum, most international shipments will require three documents: International Air Waybill, Commercial Invoice, and Certificate of Origin. Shipments that contain merchandise with values exceeding $2,500 could also need a Shipper’s Export Declaration.

The International Air Waybill is nearly the same as a domestic bill of lading, except that the Waybill contains much more information that is required for customs, such as the values of each item, the weights, and more. Much of this extra information is also required for the other shipping documents, so it is frequently best to wait and complete the International Air Waybill last.

In addition to the Waybill, you will almost always need a Commercial Invoice. The Commercial Invoice is a detailed manifest of each item that is contained in the package, including the individual quantities, the weights, and the values of each. This serves as a guide for the customs officials to understand what is in the package, and to help them identify the individual items in a package in the event that the package needs to be opened for inspection.

The Certificate of Origin is also required so that customs officials can be aware of the country (or, countries) that the items were made in. However, this one is not quite as clear-cut as the rest. Suppose, for example, that you are shipping a variety of products to an international customer. Let’s say that two thirds of the items in the package were made in America, while the remaining one third of the items were made in Mexico. In that instance, the shipment is usually considered to have originated in the United States since a majority of the items were made there. Contact your shipping carrier if you are not sure what the country of origin is for your products, as they will be able to best advise you based on your products and the destination country.

Shipments with merchandise valued at more than $2500 USD frequently require a Shippers Export Declaration. The Shippers Export Declaration must also contain a list of all products inside the package, as well as the products’ “Schedule B” category number, which shows how each item in the package fits into a system designed to organize and track commodities. In addition, the Shippers Export Declaration also requires a little more information about the shipper and receiver, such as the company name, tax ID numbers, and address. Contact your shipping carrier for assistance with Schedule B categories.

Duties and Taxes

Not only is there additionally paperwork required for international shipping, frequently there are also duties and taxes. The terminology for the collection of these duties and taxes can be different from shipper to shipper, so it is important to consult with them to make sure you understand. For example, one option is sometimes called “prepaid”. This can be deceiving since prepaid means that you will only pay for the shipping costs, and all duties and taxes will be the responsibility of the recipient. Another option commonly available is called “Free on Board”, and denotes that the you will pay for all duties and taxed required until that package arrives in it’s destination country. At that point, any additional duties and taxes will be charged to the customer. Both of these are less than ideal in that they require your customer to pay additional fees when the package arrives. This can ruin the customer experience, and lead to customer service issues if the customer was not made aware of these charges up front. A better way to ship is called “Delivery Duty Paid”, or sometimes also called “Free Domicile”. This billing method ensures that you will pay for all duties and taxes, so that the customer receives the package without any additional charges. An international shipping and handling fee charged by retailers to international customers usually cover this cost.

Time Zone Changes

It is important to consider time zone changes when shipping internationally, as packages going to Europe from the United States will have additional time added, as opposed to shipments made to Asia. Occasionally packages can be held up in customs due to inspection, and it is important to relay this information to your international customers.

Shipping products internationally is challenging. But, most experienced retailers emphasize that, in time, you will understand what is involved, and you will be able to quickly and accurately inform customers of the issues that they need to be aware of. Remember that most international shipments require three separate documents, which take extra time to process. Moreover, there are almost always duties and taxes to pay, and you’ll want to make certain that your checkout process collects for these so that your customer won’t have to pay them upon receipt.

The major shipping carriers offer online help for international shipments. Their websites are: Federal Express: Fedex.com; United Parcel Service: Ups.com; DHL: Dhl.com.

When shipping with the United States Postal Service, you can print custom forms directly from their website. Additionally, the U. S. Department of Commerce has an entire website devoted to helping U. S. companies sell goods internationally.

Brian Getting

Brian Getting

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Comments ( 2 )

  1. Legacy User January 29, 2008 Reply

    This is a excellent article I have been trying to understand shipping internationally to expand my business and this helps a lot. Thanks.

    Mersk, LLC
    Kevin Reese CEO

    — *Kevin Reese*

  2. Legacy User June 3, 2008 Reply

    Great article! I found a lot of useful tips as we are planning to ship internationally. The only thing I was confused about is FOB definition. Free on Board (FOB) means the seller is only responsible for the package until it boarded the carrier. The seller does not pay the shipping charges. Package arriving in it's destination charges is totally different story.

    — *Julia Angel-Phillips*