Pitfalls to Avoid When Shipping Internationally
First, let’s clarify that international shipping is a nebulous and intricate topic (which is one of the reasons for this blog: to help make ecommerce shipping an easier task). That said, we will outline some of the potential issues that can happen when shipping internationally, as well as possible solutions. In the end, the answer depends many different factors, but we are here to clarify your options.
When shipping internationally, in addition to general shipping costs, you must also pay duties and taxes on the item or items shipped. Depending upon what shipping mode or methods you use, you can pay these fees upfront, or leave them for your customer to pay on their end before receiving the package – obviously, this would be a not so pleasant surprise.
So, first, let’s discuss the different shipping methods.
Many use the United States Postal Service (USPS) for shipping internationally as their rates are usually the most affordable. Also, you can utilize shipping companies such as DHL, FedEx, and UPS, but their rates will probably be more expensive. Each has its benefits and costs, but we will get to that in a moment.
One other consideration for calculating the duties and taxes on the items you sell: the rate differs between the retail price of the item and the wholesale price. Unfortunately you can only take advantage of the wholesale option if you are selling items in bulk, but it certainly deserves a mention.
Now that we have some basic understanding, let’s jump into the nitty-gritty. Imagine you are based in Maryland, you sold an item from your ecommerce website, and you must ship it to Spain. Since it’s just one item, you will pay duties and taxes on the retail price of the item.
Now, what mode do you use to ship your item? If you choose the USPS, the initial shipping costs will probably be the lowest and, if the retail price of your item is below a certain threshold, there’s a possibility not to incur duties and taxes at all. However, that is a risk you have to take. In some countries, you, or worse, your customer, could be charged duties and taxes based on the mood of the mail carrier! It can be an inconsistent option.
On the other hand, if you decide to ship with DHL, FedEx or UPS, your initial shipping costs might be higher, but, since they offer the option to pay the duties and taxes on the front-end of the shipping process (this is called DTP, or duties taxes prepaid), you can rest assured your customer will receive his or her purchase without issue.
For those still with us, congratulations! Hang on, because there’s one more shipping option.
If you sell goods in bulk, you can take advantage of the wholesale shipping option, and this has a couple of advantages. First, you will pay duties and taxes on the wholesale, versus retail, price of your items, so that rate will lower. Also, you have the ability to work directly with a fulfillment center in that part of the world, (we have a worldwide network of affiliated global fulfillment companies, by the way!) that will ship your items directly to your customer.
As always, we’re here to help. We know this isn’t easy, and you have a lot of options. Please don’t hesitate to reach out to us for help, and good luck with your international shipping.