6 ways to get your share of a $100 billion market this holiday season
Editor’s note: This is a guest post from Shippo.
According to CNBC, large retailers such as Macy’s, Amazon, and Best Buy make more than 30% of their revenue during the holiday season. We want you to capture your share of this market and what better way than to offer international shipping? It Increases your addressable market.
To get your business off to the right start, here is a detailed 6-point guide with everything that you need to kick off international shipping just in time for the holiday rush. We’ll cover everything you need to know to:
- Save money on shipping
- Make sure your shipments don’t get stuck at customs
- Prepare your warehouse
- Protect your bottom line
1. Provide multiple shipping options
The customer doesn’t care that the package is being shipped internationally, they just want it to get there. So it’s up to you to manage their expectations for international shipment delivery time and costs. Some customers may be more cost-sensitive and patient, while others are willing to pay more for better service.
Prepare yourself by diversifying your carrier mix for cost and reliability. If something unexpected happens during the holiday rush, it will be too late to sign up and ship with a new carrier when you need it the most.
DHL Express is a private carrier with an established global presence. They will be responsible for the shipment from pickup to delivery, providing detailed and reliable tracking information at every step. Especially important during the holiday season, DHL Express will work directly with the importing country’s customs authorities to ensure that packages are not stuck in queue to be cleared at the border. Dive into the nuts and bolts of implementing DHL Express.
USPS has 3 different types of international service levels: First Class International, Priority Mail International, and Priority Mail Express International. The benefit of shipping with USPS is that you can just drop it in the mailbox or the same process you would use for domestic shipments.
The caveat to shipping with national postal service such as USPS is that they are not responsible for the shipment from pickup to delivery. At the border, your shipment will be transferred over to the local postal service for delivery. Depending on the country you may lose all tracking visibility.
Carriers are not one-size-fits-all. Cheaper but slower carriers are good for your business early in the holiday season. But as holiday delivery cut off times come, you’ll want to be able to offer services that can get orders there before Christmas morning.
2. Don’t get stuck at customs
Consider the types of information you need for customs documents when shipping internationally. For most international shipments*, you’ll need 2 sets of documents – a customs form and a commercial invoice. On Shippo, you can easily input all the necessary information you need as part of the label purchasing process and we’ll generate the appropriate paperwork for you.
The customs “form” is additional information that appears as part of an international shipping label, not an extra form.
The customs form is a declaration of the contents of the box for regulatory purposes. It’s typically built into the international label itself (highlighted in blue).
3 copies of the commercial invoice needs to be placed inside a clear pouch on the package. It needs to be removable and visible, so that the customs officer can review the information.
The commercial invoice is required for taxation and fee assessment. It’s typically a separate document from the label.*
*USPS is one of the few carriers that do not require 2 separate pages for international shipments. All necessary information is already included as part of the international shipping label.
By prepping your documents early in the process and inputting accurate information, you can reassure your shipment(s) get cleared faster and use it to help you drive sales.
3. Include the correct shipping information
Review the types of information you need for shipping internationally. For most international shipments*, you’ll need content type, signing person, incoterm, customs items, and tariff code (HS code). Be sure to provide the following information for all shipments:
- Contents Type – select amongst: “merchandise,” “sample,” or “gift”.
It is illegal to mark an item as “gift” when it’s not. Some customers may ask you to do that to avoid import taxes, but you’ll be the one liable if it’s discovered.
- Signing Person – the person responsible for the shipment. This is you, the shipper.
- Incoterm – who to bill for customs duties and fees:
– DDU (Delivery Duties Unpaid by Sender) meaning recipient is responsible for any duty incurred.
– DDP (Delivery Duties Paid by Sender) meaning you as the shipper will be covering the costs.
- Customs Items – brief description of the item being shipped, along with weight, quantity, value and country of origin.
Be specific, but concise. Customs issues may arise if the description is too vague, but there’s not a lot of space
- Tariff Code (HS code) – a product-specific code as documented in the Harmonized System (HS) maintained by the World Customs Organization (WCO). Tariff codes exist for almost every product involved in global commerce. Required on official shipping documents for tax assessment purposes, a tariff code ensures uniformity of product classification worldwide.
4. Don’t forget about customs, restrictions, and duties
If you’re working with a private shipping carrier like DHL Express, your packages will be routed to one of their distribution centers. One of the benefits of working with a private carrier like DHL Express is that are a registered customs broker who will manage all questions from the import country authority on your behalf.
Especially if you ship high value products over $2500, DHL Express will be able to help you file export documentation (at an additional service charge) like getting an Internal Transaction Number (ITN) generated by the Automated Export System (AES).
However, this does not mean that you’re exempt from restrictions and duty.
Customs regulations vary somewhat by country. It’s important to educate yourself about the restrictions of the particular countries you’re shipping to, to avoid surprises down the road.
The USPS website has a great Shipping Restrictions page with some general no-goes, as well as a more detailed Index of Countries and Localities. Just remember that while USPS is a great resource for information on shipping regulations and restrictions, other carriers may differ slightly in terms of limitations on package weight, size, etc.
Providing a tariff number can be useful to smooth out the customs process (though you don’t need to have one). Tariff numbers exist for almost every product involved in global commerce and ensure uniformity of product classifications worldwide. It was created for easier identification during customs processing and better standardization of international shipping. You can find more details and the full list of tariff numbers/harmonized codes or search the full World Customs Organization HS code database (but this does require a paid subscription.)
The most unpredictable part of international shipping costs are the customs duties and fees. These can change month to month, vary by time of year, or differ based on the customs officer handling your package. However, you can use an online calculator like Duty Calculator for an estimate. It’s also important to think about whether you want your customers to pay these fees – which is standard – or if you want to absorb them yourself.
5. Get your warehouse ready
Although orders haven’t even come in yet, you should think about how you’d like to get your warehouse operations ready for the holiday rush. There are a few items you want to check off your list to get ready.
- Do you have enough packaging supplies to get you through the holidays without interruption? This includes boxes of different sizes, tapes and packaging content. Also, remember to stock up on different size boxes, as you don’t want to be paying by DIM weight for empty air.
- Consider your order fulfillment speed. 67% of consumers expect the orders to leave the warehouse within 24 hours. Make sure that your warehouse can handle peak order volume and get packages out in time.
- What are your most ordered items? Get the list of projected top selling products from marketing or merchandising teams. Set up a “top sellers” location near ship stations to allow for quick turnarounds for those favorite items.
6. Protect your bottom line
Lastly, of course, think about how you’d like to handle insurance. The rule of thumb is to purchase insurance for any item you cannot afford to lose or replace. Also, it is effective when shipping internationally. It’s about protecting your bottom line.
A single loss or damage of a shipment can set you back significantly. Not only have you lost the original shipment, but typically you have to send the customer a replacement and pay for the cost of shipping again. For one-of-a-kind items that are difficult to substitute, you may lose the sale altogether.
International shipments are prone to loss or breakage since they get handled by many different parties. Depending on the country you’re shipping to, the risk can be higher. Especially if you’re using a national postal carrier like USPS, the package will be transferred into the hands of the local carrier, who may have a different standard of care. Using a private carrier service like DHL Express can be more reliable since the package will be under their care from pickup to customs to delivery.
Often times, you can include insurance as part of the cost of shipping. Be transparent and explain that insurance is provided. Having insurance can give customers reassurance that they are protected.
Hopefully, this checklist left you with the information you needed to feel ready to take on the daunting task of preparing for the holidays. Thinking one-step ahead of your customers can help you ensure a successful holiday season for everyone.