You’ve seen the stats, like this one from CIEDEC—that 95% of the world’s consumer market awaits you outside US borders. And, after reading our 7 Tips for Growing International Sales, you’ve laid the groundwork to expand your horizons. Now, it’s time to get up to speed with international shipping.
Though it may seem daunting, follow these steps and your products will soar—literally.
First, review the Commerce Control List (CCL) to verify whether your product is allowed for export or if it is a controlled commodity that requires an export license. Also, depending on where and to whom you are shipping, you’ll want to check whether the government has sanctions or embargoes and prohibitions on end users or the product’s end-use. Then, check the Country Commercial Guides to determine whether your product is allowed for import in a particular country.
If your product does require an export license, determine your product’s Export Control Classification Number (ECCN) because you’ll need it to file an Electronic Export Information (EEI) form. You will also need to file an EEI if your shipment’s value is more than $2500.
The good news is most commercial products do not require an export license and are designated EAR99 in the Export Administration Regulations, but prior to exporting, you will still need to ascertain your product’s Harmonized System classification and Schedule B number to complete the export and import forms.
💡TIP: Walk before you fly. 💡
An easy way to start offering international shipping to Canada and Mexico first and branch out from there. Trading with our neighbors has been simplified with the US-Mexico-Canada Agreement (USMCA) which allows qualifying small package shipments valued at less than $150CAD (in Canada) and $117USD (in Mexico) to ship duty free, and the taxes have also been simplified.
Or, select from the 20 countries that have a free trade agreement with the US. If the customs regulations of the country to which you are shipping is rather complicated, and you plan to ship there frequently, you may want to hire a customs broker to help you cut through their red tape.
|Countries with Free Trade Agreements with the United States|
|Colombia||Costa Rica||Dominican Republic||El Salvador|
Incoterms define the rules of the ownership transfer… for instance: During the delivery process when does ownership transfer; who is responsible for covering the licensing, customs fees and taxes; and who, if applicable, is insuring the product for loss and damages? What’s the de minimus value for the country you’re shipping to?
As you consider how to handle these expenses, you should also estimate what your landed cost (or total expenses from the point of sale to final receipt of the product) will be—there are many online calculators available to help you. Does it make sense for you to offer free shipping? Split the costs? Will you accept returns, and, if so, who covers that cost? Should you adjust your product pricing to reflect the additional cost and work?
Selecting which carrier to use is a big part of this step. Price is often the primary concern, but speed and convenience of delivery are factors as well. While USPS can often be the least expensive, their tracking capabilities and delivery responsibilities end once the product leaves their jurisdiction. Many private carriers handle delivery from door-to-door and offer more services, but those costs will be factored into your overall price.
Yay! You’ve cut through the red tape, done your research, and it’s paying off—the cash register is ringing.
Now, it’s time to generate a detailed Commercial Invoice (or Pro Forma Invoice for samples) outlining the terms of both the sale and the delivery, then finalize the required export and import forms (which you will have already determined through your research). Some of these can be completed online.
Then, package your product in a sturdy container that meets the standards of your selected carrier; create and affix your international shipping label, with careful attention to proofing your recipient’s address and contact information; and attach your Commercial Invoice along with any other necessary customs paperwork.
Easy as 1-2-3.
Right? Okay, maybe we’re oversimplifying it. But, once you perform the cost-benefit analysis and create the foundation, the process will become systematic and, ultimately, well worth it.
However, if you find you just do not have the capacity for it. Essential Hub can help. We’ve done our due diligence in the export arena, developed relationships and pricing contracts with multiple carriers, and built the databases to support a seamless ecommerce API that will facilitate every international sale you make. To explore whether our international shipping solution could work for you, click here.