International Shipping Essentials
Why should I ship to other countries?
Committing to shipping your products internationally may seem intimidating. But think about it this way: the idea of starting an ecommerce business in the first place was intimidating, right? And if you’re considering shipping overseas, then you clearly passed that test with flying colors.
Many online retailers in Australia hesitate to sell products to other countries because they think the costs outweigh the potential revenue. Spoiler alert: they’re wrong.
When you conduct thorough research and make well-informed decisions, you can successfully reach customers all over the globe.
Ready to learn the basics of ecommerce international shipping? Let’s go!
Part 1: Products and Packaging
Confirm Product Shippability
Of course you’re aware of the package restrictions for your domestic shipments. But when it comes to shipping overseas, weight and dimensions limits can vary substantially between destinations. And if you don’t confirm what size packages each country accepts, expect to get your shipments refused at customs.
There are also several product categories carriers will just straight up not transport internationally under any circumstances. For instance, you can’t send first aid kits to another country via Australia Post. And UPS won’t send postage stamps overseas.
On top of that, every country has its own unique restrictions. Did you know you can’t ship playing cards to Denmark, Greece, or Spain? Or that you can’t send bells to Italy or eyeglasses to Uruguay?
Prepare Packages for Passage
Each box, envelope, and mailer tube you ship is going to have plenty of pit stops on its way to its final destination. Most of your domestic orders will only call sorting centers and trucks temporary homes. But your international orders will have the joy of traveling by plane and boat, too. This means you’ve got to be extra obsessive about how you pack cross-border shipments.
Evaluate the weight, value, and fragility of the contents of each package. Remember that liquids and powders need special packaging when being transported overseas. Consider whether the items are subject to any international regulations and thus have additional packaging requirements.
Your package is about to embark on a long journey — make sure it gets there in one piece.
Part 2: Taxes, Duties, and Documentation
Value Added Tax (VAT) and Duties
- Value Added Tax (VAT) [val-yoo
ad -dedtaks] — also known as goods and services tax (GST) — is a fee merchantsare charged on every cross-border sale. It’s calculated using a fixed percentage that applies to every shipment, regardless of contents. Total VAT varies between countries.
- A duty [doo-tee] — also known as a tariff — is
a taxmust pay when selling products internationally. Like VAT, each country uses a unique percentage to calculate duties. However, instead of using a single, set percentage, duties are calculated based on the value and quantity of the items being imported plus the cost of shipping and any insurance. retailers
There are two types of duties: delivery duty paid (DDP) and delivery duty unpaid (DDU). With DDP, the company is responsible for all applicable duties and fees. The total is paid upfront by the carrier, and the retailer receives a bill.
In the case of DDU, the recipient (i.e. your customer) must pay the duty. If you go
*Pro Tip: Some countries charge only VAT, others collect only duties, and a handful of countries impose neither.
Determine how much a country’s duties and VAT would affect your overall costs. Once you understand the financial impact, you’ll know how to adjust your prices for shoppers in those countries. Or you’ll realize it simply isn’t worth it to sell to that country.
Required Customs Documents
- Commercial Invoice. Used to appraise the value of products and calculate customs duties and taxes.
Documentmust list the following: retailer’s name and address; recipient’s name and address; item quantities, descriptions, and prices; terms of sale and payment; and mode of transport.
- Export Packing List. A more comprehensive version of a domestic shipment packing list. In addition to the details included on a standard packing list, an export packing list specifies the mode of transport, carrier information, and the weight, dimensions, quantity, and type of each package in the shipment.
- Certificate of Origin. Confirms country where products in
shipmentwere produced, manufactured, and/or obtained. Must be signed by retailerand, in some instances, certified by localchamber of commerce.
ShipStation can automatically submit all required customs documentation electronically for UPS and DHL. Learn more here.
Part 3: Shipping Carrier Comparison
For Australian sellers, there are four main carriers: Australia Post, Sendle, UPS, and DHL. Each carrier has its own advantages:
- Australia Post — Operates nearly 4,400 post offices
- Sendle — Typically the least expensive option for ecommerce international shipping
- UPS — Has offices in nearly every country, which means UPS will manage shipping from your warehouse straight through to delivery
- DHL — Experts in international customs
As you evaluate your options, determine two things: 1) which aspects you’re willing to compromise on, and 2) what is non-negotiable. When you know how flexible you are on things like costs and delivery speed, you can more easily choose the right carrier.
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