How Does eCommerce International Shipping Work?

The line between international and local markets has been getting blurrier with the rise of international eCommerce shipping. Businesses can now extend their grasp far beyond their home countries to access new markets across the sea.

Thanks to the internet, companies have been reaching their target markets directly through carefully crafted advertising campaigns. However, if you feel like your business has reached the ceiling of the local market, it’s time to move on to a bigger playing field.

Driving your business to cater to international clients will require a solid shipping eCommerce plan for smooth implementation. Here are some of the things you should know when creating your global dispatch strategy.

Why Should I Get Into International Shipping For My Business?

 

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Retail eCommerce sales worldwide are expected to increase to 8 trillion USD by 2026. This industry has been growing continuously since its conception and it’s showing no signs of slowing down. Given the trend, you can see that there’s a huge opportunity for profit by expanding your business to international markets.

The internet has made it easy to have a global audience for a local brand. Thanks to social media marketing, companies can now reach anyone anywhere, but that also means that their operations need to follow through with their marketing tactics by having a logistics plan in place.

What Do I Need to Prepare?

As with any business move, it’s vital that you have everything you need before launching a service. International shipping is complex compared to its local counterpart because there are more documents that you’ll need to prepare before sending the package out.

Below are some things you’ll need to iron out before dropping your mailer off at the nearest post office:

Website Update

Once you go global, it’s going to be much harder to have a return process. Some businesses write it off as a loss, while others send detailed instructions to their customers about returning the item. You can minimize these instances by keeping product information on your website updated.

Here are some details you should add to your website for a smooth transaction:

  • Product weight
  • Product dimensions
  • Product description
  • Product photos
  • Product ingredients
  • Sizing chart
  • Payment methods
  • Shipping details and policies

Having product details and shipping FAQs readily available on your site can streamline the buying process for your clients. Painting a clear product picture for your customers can also save both parties a lot of trouble in the long run.

Packaging

Having packaging on-hand isn’t just for ease of product dispatching, it’s also a great way to compute shipping costs ahead of time. Product weight and packaging dimensions are factors that couriers consider when computing shipping costs.

A good practice to have when purchasing packaging is to look for mailers that are optimized for specific shipping rates. Some couriers like USPS, DHL, and FedEx have their own standard mailers.

Mailing Materials

Packaging peanuts, poly bubbly mailers, and air pillows are just some of the materials that companies use to secure fragile goods. While these items may be light, they can still add to the total care of your packages.

A good trick to have is to standardize your packaging materials to ensure weight uniformity when shipping.

Documents

Before you show up at your local post office, you’ll need to have a couple of documents on-hand for a smooth transaction. So, it’s best to come armed with your customs form and sales invoice when shipping out internationally.

Your chosen carrier will usually have customs declaration forms available online.

Incoterm

The incoterm is a statement between you and your customer about the transaction. This agreement states which party will be paying for the duties and international taxes. It’s important to disclose this beforehand to not surprise your clients with additional payments upon delivery. Be upfront and exercise transparency to retain customer loyalty.

You can choose to include these fees in the product cost for better customer service but be careful when doing this practice, because it can eat up your profit margins.

Depending on the option you choose, your package will be marked with either Delivery Duties Unpaid by Sender (DDU) or Delivery Duties Paid by Sender (DDP).

How Do I Choose the Right International Shipping Method?

There is no one size fits all solution for shipping services. Certain couriers may not accept your package due to their regulations against expensive or fragile items, while some just don’t cater to the area you want to ship to. Choosing the right international shipping method will depend on some of these factors and your preferences.

A good practice to have is to check a country’s regulations before printing out your labels. It’s also great to remember that some couriers will offer complimentary insurance of up to 100 USD for the benefit of their users. The speed of shipping and availability of tracking methods can also affect your courier choice.

Ultimately, it’s recommended that you compare the costs and benefits of availing of a certain provider’s services over another.

We’ve listed some famous couriers below and what makes them great logistics partners.

FedEx

FedEx is a household brand that has been offering delivery services since 1971. It’s known for its time-sensitive shipping solutions ranging from overnight to two-day deliveries at affordable costs. Their superb tracking service gives you full visibility of your package’s location at any time. This courier is best for delicate and temperature-sensitive shipments.

In 2020, FedEx has adopted last-mile delivery couriers to their operations for improved efficiency.

UPS

The logistical giant, UPS, is renowned for its operations in over 220+ countries worldwide. This courier provides versatility in handling different packages. They’re one of the few couriers that can carry domesticated animals, hazardous goods, and deliver parcels within five days from receipt.

Along with its user-friendly website that can help you fill out paperwork and shipment details easily, UPS is a great starting point for your company’s international shipping.

UPS partners with local post offices to easily deliver to remote areas in the recipient’s country.

DHL

A subsidiary of Deutsche Post, DHL is a brand with a global network that can deliver door-to-door. You won’t ever have to worry about the status of your package because DHL provides accurate tracking services for you.

With DHL, you can ship to companies worldwide with ease. They’ve also recently opened up their warehouse and inventory management services for those seeking to export their products with no hassle.

USPS

The United States Postal Service is a US government-owned brand that features a flat rate fee. A flat rate fee ensures that the cost of shipping won’t vary according to its weight, making it an economical option for US-based companies. This brand operates under a Universal Service Obligation (USO) making it obligated to offer its services at a uniform price across the United States.

If you’re based in the US, utilizing USPS’s services can afford your company secure and affordable shipping operations that can cater to over 180 countries worldwide.

The USPS is the preferred option for most global couriers when it comes to last-mile deliveries in the USA.

How Much is International Shipping?

Did you know that the average conversion rate for people who actually buy your products is only 2 percent? This influences cart abandonment numbers, making them very high. Imagine, out of 150 people who add your products to their cart, only three people make the purchase. A reason for this issue is the high miscellaneous fees at the end of the purchase.

When customers see how much shipping, taxes, and handling fees add up to their total, they hit the exit button pretty quickly. This is a common occurrence given how much international shipping costs can add to the final bill. While a solution you might come up with is to offer free shipping, it may not be the best answer, because free shipping can lead to lower profit margins or worse, a total loss.

International shipping won’t be the same across the board, and there’s a certain formula most companies use to compute for it. Having an idea of how much it’ll cost your business to ship out items will help combat possible financial losses.

How To Calculate International Shipping?

The base international shipping cost is calculated according to four factors:

  • Origin address
  • Destination address
  • Package dimensions
  • Package weight

Rates will vary according to a courier’s fees. Thankfully, there are online calculators to eliminate the guessing game for business owners. Each shipping company will have its own quote, but an easier way to see different shipping figures is to check with shipping brokers.

In addition to the regular shipping rates, other costs such as duties, taxes, and insurance can play a part in inflating your customer’s shipping bill. But while insurance can add extra expenses to the total bill, it’s vital to have it for products going overseas, because the likelihood of your package getting lost or damaged increases the farther the item goes.

Why is International Shipping So Expensive?

Shipping across borders is a complex process that can involve several forms of transportation, fuel surcharges, importation duties, and taxes. Sending out packages during peak seasons like the holidays can also add “peak shipping” fees to the total charges.

In addition to these shipping fees, purchasing packaging that’s up to your courier’s standard and packing materials to secure the item are just some of the main factors that make shipping eCommerce products abroad costly.

In fact, Time magazine has published that shipping costs have been steadily rising due to increased consumer demand, container shortages, saturated ports, and a shortage of dock workers.

How Long Does International Shipping Take?

The rate of international eCommerce shipping solutions will vary according to the courier you’ll employ. Waiting times can go between 3 to 17 working days for non-express packages.

Below is a reference table of how long it can take for the shipping couriers mentioned above can take to deliver parcels, along with the price of sending out a 2 lbs package.

USA to Singapore*

Courier Service Price Delivery Time
FedEx International Economy $90.00 3-4 working days
UPS Worldwide Saver $56.00 3-4 working days
DHL Parcel Direct $77.49 4-5 working days
USPS Priority Mail International $30.70 9-17 working days

*These rates were taken on November 2022 and are subject to change.

How Long Does International Express Shipping Usually Take?

If your customer is in a rush to receive their item, you can offer them an express shipping option. This can come off much more costly but it’ll deliver your product within one to three days.

We’ve made another reference sheet for easy comparison of prices against standard shipping rates.

USA to Singapore*

Courier Service Price Delivery Time
FedEx International Priority Express $163.96 3 working days
UPS UPS Saver $143.28 1-2 working days
DHL Parcel Direct $133.68 3-4 working days
USPS Global Express Guaranteed $106.05 1-3 working days

*These rates were taken on November 2022 and are subject to change.

How To Get Cheap International Shipping?

As you can see from the references above, international shipping can be costly for small businesses. Making it a deterrent for companies who want to expand to the global market.

Below are some ways you can get cheap international shipping for your business:

Shipping Brokers

A great way to get lower prices on international shipping rates is to use a shipping broker’s services. These types of services will usually require an account, but the savings will be well worth the hassle. Shipping brokers make money by availing of shipping services in bulk and marking it up.

Companies like eShipper, Coolparcel, and ShipBob offer these services.

Business Account

If you’re regularly sending out packages to different areas, you can talk to your preferred transport solutions company to set up a business account for your company; although, these facilities are only available in select countries.

Fulfillment Warehouses

If you’re scaling up your business but don’t want to deal with the hassles of packaging and shipping, you can look to global marketplaces like Alibaba and Amazon to handle the logistics for you. These platforms can even offer inventory management and marketing automation for a smoother workflow.

This can be a great option for companies looking to boost their output with data-driven results.

Save on Shipping

Now that you know the fundamentals of international shipping for eCommerce, you can now get started on expanding your business to reach international markets.

But if you’re still unsure and you’re looking for a program that can guide you through the entire process, you can check out the Amazon Global Selling Program, whose goal is to help aspiring business owners like you send your products abroad with ease. Signing up for this program will help you streamline your operations while ensuring that each order is fulfilled and delivered safely to its new owners.

 

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About the Author:

Bernard San Juan III is the Managing Partner of Truelogic who comes from a successful career in online companies, where he played a critical role in building & managing workforce groups. He has redesigned the organization’s IT infrastructure to improve order processing and logistics. His skills include managing performance, managing costs, and training. He also manages overall sales, customer satisfaction, graphic design, copywriting, and training with first-line supervisors.


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