Essential information on cross-border shipping and logistics
Carly Greenberg
·March 4, 2024
We live in a global economy — but is your ecommerce business capitalizing on that?
In fact, 57% of ecommerce customers say that they shop internationally, with two in five saying that they’d made a purchase from an international business within the last three months.
If your brand hasn’t made an effort to attract customers beyond your country’s borders, you may be missing out on a lucrative market opportunity.
That said, there are some complexities to navigating cross-border shipping that you’ll need to get a handle on before launching your expansion strategy.
In this article, we’ll talk you through:
- How to market and sell to international audiences
- Restrictions and regulations around international shipping
- Successfully navigating customs and documentation requirements
- Increased labor and logistics costs for cross-border shipping
- How to optimize your international shipping process
How to market to international audiences
First, make sure that your online store is set up to sell to customers in other countries, whether wholesale or retail.
You’ll need to use an ecommerce platform that can help you customize your product offerings, currency, descriptions, and even languages, for each market you plan to sell your products in. Ninety-two percent of customers prefer to make purchases that are priced in their local currency, and you’re likely to lose one-third of these buyers altogether if you don’t customize pricing for their region. It’s also important to include multiple payment options: While credit cards are the most common form of payment in North America, customers in parts of Europe are more likely to use EPS (electronic payment standard) or a payment option called iDEAL.
To simplify the process of localizing your store to multiple international audiences, you can use a tool like Shopify Markets, which automatically converts between more than 130 international currencies, can localize and translate your content based on the geographic region, and can set up default payment options based on the region. By creating a customized shopfront for each geographical region where you’re marketing your products, you can create a positive customer experience for your shoppers that helps them feel comfortable with your brand.
Restrictions and regulations around international shipping
That said, keep in mind that not all of your products can necessarily be sold in a foreign market.
Many countries place restrictions and regulations around what can be sent via international shipping, and you’ll need to pay close attention to the rules of each country when building your local product catalog, or risk having your items destroyed or rejected when you attempt to ship them.
You’ll need to confirm specific regulations based on the country that you are exporting from and importing into. However, some of the more common import/export restrictions include:
- Firearms, ammunition, and weapons
Sale and international shipping of these items is heavily restricted, and export licenses are often required. - Controlled substances
Prescription drugs, narcotics, and many types of medication are restricted for cross-border shipping and sale. Only certain types of controlled substances can be imported to the United States under limited circumstances, and parties must register the products with the DEA in advance of the shipment. - Animal products
Products of Animal Origin (POAO), such as meat or dairy products, are subject to strict regulation for import and export, as they may pose safety risks. Make sure you check the regulations for your specific countries of import and export to determine what’s permitted. - Alcoholic beverages
Beer, wine, spirits, and other alcoholic beverages are federally regulated, and require a license to sell, distribute, or import.
Successfully navigating customs and documentation requirements
Once you’ve confirmed that the products you plan to export through cross-border shipping aren’t prohibited by law, it’s still important to make sure that you’ve followed the proper protocols for labeling and shipping the products, or you may find your shipment rejected or destroyed at the border.
All products destined for international shipping require proper documentation, which typically includes customs forms that detail:
- The origin country of the shipment
- The destination port
- The item description and value
- The quantity of the item
- The purpose of the item (gift, purchase, personal belongings)
- The shipper’s contact information
At the border crossing, customs officials will use your declaration form to determine whether the shipment should be permitted, and if there are any required taxes or fees associated with the product. Failing to properly fill out your customs forms can result in shipment delays or rejection at the border, so it’s important to be thorough when filling out your documentation for international shipping.
Increased labor and logistics costs for cross-border shipping
International shipping will cost more than domestic shipping — so it’s important to calculate your costs and update your pricing to ensure that you have a good profit margin on your exported products.
While shipping products within North America from the U.S. to Canada, or vice-versa, may not cost much more than domestic shipping, you’ll see a substantial increase in logistics costs when shipping products overseas, such as to the United Kingdom or Europe.
In these cases, you’ll need to choose between speed (air travel) and cost (cargo ship) to determine an effective logistics route for your products. You might leave it up to the customer, asking them whether they’d like to spend more for fast shipping or wait several weeks for a shipment by boat.
You’ll also need to factor in the loading and unloading costs of your shipments through the entire supply chain. Make sure that you seek out quotes from different international shipping carriers to ensure that you have access to the data that can help you make a smart decision about your shipping options.
How to optimize your international shipping process
To avoid the dilemma of forcing your customer to choose speed or cost, your brand can pre-stock inventory in your target locations, using a cargo ship to transport your products in bulk to a local warehouse or 3PL before you begin selling products overseas. This solution will help you conserve your shipping costs, while still ensuring that customers get access to your goods in a timely fashion.
It’s also important to think about your reverse logistics journey — after all, customers often decide to return products they’re unhappy with, and you don’t want the cost of product returns to eat up your profit margins.
Consider using a returns management solution like Loop, which you can set up with conditional logic to determine the most efficient reverse logistics strategy for each product and get access to real-time tracking during the return voyage. Rather than paying the cost to return products overseas, you might foster partnerships with local resellers, or donate unwanted inventory to donation or recycling facilities. By routing each return based on certain conditions, you can ensure sustainability in your supply chain and avoid unnecessary reverse logistics fees.
Expanding your brand internationally can bring the opportunity for new customers and higher sales numbers, but it’s important to balance out your strategy and pay close attention to the bottom line before jumping in. By choosing the right technology solutions, shipping partners, and supply chain partners, you’ll be poised for success in whatever markets you choose to enter.
Want support with international returns? See how Loop can help you optimize your journey.
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