If you run a small or medium-sized business, you’re constantly pulled in many directions. Regardless of the daily hustle, one question never seems too far away: “What more can I do to keep my business growing?”
Shipping your product overseas is a great way to expand and diversify your operations. The economics of exporting are certainly enticing. According to the U.S. Census Bureau, only 5 percent of U.S. companies export, whereas three-quarters of the world's purchasing power is outside the United States.
Of course, it’s normal to feel a level of apprehension when thinking about shipping internationally. "People get concerned whether their goods will get stuck in customs, whether the customer on the other side of the transaction is legitimate, and whether they will get paid for the shipment,” says Brendan Lease, senior marketing manager in the UPS North America Export Group. “However, there is a wealth of opportunity outside of the United States that small and medium-sized businesses can explore.”
The good news is you're not alone: numerous tools and resources are available to help you ship your product overseas. Some might say that global shipping has never been easier.
Here are five easy steps you can follow to get started with international shipping:
The first rule of international shipping is knowing exactly what you're shipping, particularly when it comes to completing the commercial invoice. Be as specific as possible when completing this important customs form, which is required for all non-document shipments across borders.
Describe clearly not only what you are shipping, but other details such as the number of units and the total value of your shipment. You will also need to note the commodity’s country of origin (where it’s manufactured), which may be different from your country of shipping.
All this detail is critical for customs officials to be able to apply the correct classification to your shipment, which will give you the smoothest path of entry into your overseas market. "If your commercial invoice just says ‘computer parts,’ or the declared value doesn't match the goods, or it's not descriptive enough, that's more likely to cause a hold at customs, which can increase shipping costs, lead to delays and cause frustration," Lease explains.
Tom Taggart, product development marketing manager for UPS, agrees on the importance of avoiding generic language in customs documentation. "When you're shipping a package internationally, the main thing is to communicate exactly what you’re shipping," he says. "If you know the Harmonized System code—the 10-digit code member countries use to classify traded goods for customs purposes—use it."
The next thing to determine is where you want to ship internationally. Many U.S. small and medium-sized businesses start with Canada and Mexico, attracted by proximity and the ease of shipping into these markets. There’s no doubt our neighbors to the north and the south make for great trading partners.
Don’t stop at North America, though. The world is a big place, offering significant commercial opportunity. You could start by identifying countries that have a free trade agreement in place with the United States, providing access to lower duty rates and simpler customs clearance.
"Although not everything you ship from one place to another will qualify for lower tariff levels just because there's a free trade agreement in place, free trade agreements definitely make it much easier to move goods between countries,” Lease states.
When completing the commercial invoice, include full and accurate contact details for the receiver of your shipment. This will keep the process moving along in the event customs has questions for your consignee.
Remember to estimate your total cost of shipping, otherwise known as your landed cost, and determine who will be paying for insurance, duties, taxes and shipping – will it be you, your consignee or do you plan to split costs? These decisions should be made in advance of sending a package internationally, and clearly agreed upon with the receiver. Include the terms of the arrangement in your commercial invoice.
“You should understand that shipping direct to a consumer or into a B2C environment can be a little different than shipping B2B,” explains Taggart. “There can be some ways to defer your import tax or value-added tax if you are shipping to a business.”
UPS offers several technology solutions to make the process of calculating your landed costs easier. For example, i-parcel, a UPS company that works with e-commerce shippers, does more than estimate your landed costs when sending a package overseas—it guarantees them.
You may be asking, “What is the cheapest way to ship internationally?” The general response is, “How quickly do you need it to get there?” As a rule, the faster you want it to arrive, the greater the cost of shipping.
You can choose from a wide selection of options for shipping a package internationally, from the more economical UPS Worldwide Saver® service to the urgent UPS Express Critical® service. UPS offers many options for shipping inside North America, from ground shipment all the way up to next flight out. If you're looking to ship into Canada or Mexico and don’t require same or next day delivery, ground service options with UPS® Standard generally are most cost effective and involve two to six days in transit.
"Understand how long of a lead time you can bake into your customer's expectations, and go from there," Lease advises.
Another key benefit of shipping with UPS is the ability to deal with a single service provider. Although it might be tempting to consider contracting with a consolidator, it’s important to understand the downsides of such an arrangement. Says Taggart, "A consolidator is going to take your package and wait until they have a critical mass from other shippers, then find the cheapest way to get it from A to B.”
"The concern there is that you may have one party pick up your package, another party consolidate it, a third party handle that origin-to-destination move, a fourth party handle the customs clearance, and a fifth undertake the final mile delivery,” he explains. “You may lose visibility into your package, where it is, and when it's going to get there, so it's a big trade-off for a little bit of possible cost reduction."
Compare this with the peace of mind offered by UPS’s small package network, where your shipment does not leave UPS's network. "You know exactly where your package is with tracking that's almost real-time. This gives customers assurance that the package is going to get there, when we say it's going to get there, and it's not going to get lost in all of those handoffs," Taggart maintains.
Don’t struggle on your own trying to figure out how to send a package internationally. Instead, let UPS make is easy for you. Head to UPS.com, click on “Ship” and our shipping wizard will walk you through the simple steps to get your international package ready to ship and on its way.
The system not only helps you complete the commercial invoice with maximum convenience, but offers a range of available delivery options, with pricing that updates in real-time as you input your details.
All that’s left is for you to pay with a card or through your UPS account, and then it’s time to print your shipping label and get your package picked up or dropped off at a convenient UPS location.
If you’re still wondering whether you should ship overseas, consider again the benefits to your business of establishing an international footprint.
For Lease, the business case for shipping overseas speaks for itself. "Our business customers who ship internationally tend to not only grow faster than ones who only ship domestically, but they also are 8.5 percent less likely to go out of business than non-exporting companies,” he says.
UPS offers a global network of resources to help build your international shipping strategy while navigating customs duty and tax collection. With UPS, international shipping is more convenient than ever. Get shipping overseas today.
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