If you have an e–commerce business, one way to expand as a brand is by offering cross-border shipping. We’ve put together a guide with everything you need to know about how cross-border shipping can help you grow internationally.
When a company decides to sell its products in another country, it has a couple of choices. You can choose to set up a warehouse in the new country to store your products, and ship internally. Or you can send out your orders from your existing warehouse in your base country. The latter is known as cross-border shipping.
It’s a decision businesses should think carefully about, but there are several benefits of choosing to do cross-border shipping.
However, cross-border shipping isn’t without its challenges, particularly when you’re just getting started with it! There are a number of things to think about before you start shipping internationally, for example:
You might be asking yourself if expanding your business internationally is worth it. There are certainly plenty of advantages! Let us tell you how cross-border shipping can help you grow internationally:
Cross-border shipping offers a fantastic opportunity to take your business into brand new markets. The number of consumers who are using their spending power to buy internationally is increasing. A study found that 83% of shoppers in Canada have bought from e–commerce stores in other countries, as well as 81% of shoppers in Brazil and 78% in Mexico. In the USA, nearly half (47%) of all shoppers had purchased from stores outside of the country (UPS).
As long as you’re offering great products at a great price, do customers really care where you’re based?
Amongst the best opportunities of a cross-border shipping strategy we can find these ones about warehouse management:
As international deliveries can take longer than domestic ones, you’ll want to know that your package is safely on its way to your customers. International tracking gives both you and your customer peace of mind that everything is on track. If something does happen to go wrong, then it’s easier to notify your customer and find out where the parcel is if you have tracking in place. This leads to fewer delays in delivery times, and it safeguards against parcels getting lost in transit.
ShippyPro offers a Track & Trace service which automatically sends out shipping notification emails to keep your customers up-to-date on the status of their order. From one easy-to-use dashboard, you’re quickly able to see whether there are any issues with late shipments, allowing you to reach out to your shipping Carrier to identify what the issue is. You can also proactively email your customers to notify them of the issue before it becomes a major problem.
The e–commerce businesses already using Track & Trace have found that there’s been a 78% reduction in tracking enquiries. That leaves you with a lot of extra time to focus on growing your business, and learning more about how cross-border shipping can help you grow internationally!
One key aspect of how cross-border shipping can help you grow internationally is when you partner with the right shipping Carrier. Choosing the right Carrier, or Carriers, for your business can really help to improve the customer experience, growing your brand and increasing your global customer base.
There are a few key factors you should take into account when choosing a shipping partner. Think about the following points:
Rather than relying on one Carrier for all of your shipping, you could consider using multiple Carriers. This reduces the dependency on a single Carrier, which can be particularly useful during Peak Season like before Christmas.
If you use multiple Carriers, you may be better able to negotiate rates between them, getting a better deal for both you and your customers. You can consider as well partnering with a global delivery solution broker to build your international cross-border shipping strategy.
There are different considerations to take into account depending on whether you’re shipping within the EU, or outside the EU, as the regulations are slightly different. How cross-border shipping can help you grow internationally will vary from region to region, but here are a few pointers to remember.
If your business is based in the EU and trades internationally, it must be registered with the national authority of the country in which it’s based, and have an EORI number.
An EORI number is an ‘Economic Operators Registration and Identification Number’. It’s a system of unique identification numbers which are used by customs authorities throughout the EU.
There are some countries, specifically Norway, Switzerland, Iceland and Liechtenstein, which are part of Europe but aren’t in the European Union. These countries have a special trade agreement with the EU as another customs union called the European Free Trade Association (EFTA). If you’re shipping to these countries, you need to declare your goods at customs and provide a commercial invoice.
Currently, if your business is based in the EU, and you’re selling goods to customers in another EU country, you usually need to register your business in that country and charge VAT at the rate applicable there. This doesn’t apply, however, if the total value of your sales to that country falls below the limit set by the country for the tax year. Every EU member state has a different tax threshold.
The European Commission aims to simplify VAT obligations for companies that are carrying out cross-border sales, ensuring that VAT is paid correctly to the Member State of the customer. The proposed new rules will benefit businesses, as there will be a substantial reduction in cross-border VAT compliance costs. This means it’ll be far less costly to trade across borders.
It also means that EU businesses will be able to compete on an equal footing with businesses from outside the EU, which don’t have to charge VAT.
If you’re shipping goods outside of the EU, there are two customs declarations needed: the CN22 form, and the CN23 and CP71 forms. These forms provide information about what’s included in the package. Customs officials need these so they can determine what import duty to apply when the package crosses the border.
The CN22 and CN23 are different, and which one you should use depends on the weight and value of your package:
If you’re using a CN23, you also need a CP71 dispatch form. This should be used like an address card on the outside of the clear documents wallet. It doesn’t show the value of the individual items in the package.