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Running a business

International Shipping Guide

For small and medium business owners in Australia looking to sell goods in overseas markets, shipping internationally can be quite daunting. While in fact, international shipping can open up whole new consumer markets for their business.


There are many things to consider when sending parcels overseas from Australia – one of them being understanding international shipping rates and weighing up different providers.


This guide to international shipping from Australia will help unpack some of the aspects of international shipping that you need to be across.

Research Each Destination

When shipping items internationally, weight and dimension restrictions can differ significantly depending on the destination. Keep in mind that customs can reject some of your shipments if you don't validate the size of packages that each country accepts (i.e. a package may be suitable for one country but too large for another country).


There are also a number of product categories that carriers would never ship overseas. For instance, Australia Post does not allow the delivery of first aid equipment abroad. UPS will not ship postage stamps abroad.


So, depending on the products you sell and the countries you are shipping to, you’ll need to do some research about any specific restrictions that may affect your shipping.

Proper Packaging Needed


When dealing with domestic orders, you often don’t need to worry too much about specific packaging requirements. After all, your packages will only be spending time in trucks and sorting centres. 


However, international packages are going on a longer journey, potentially involving multiple plane or freight trips. Besides the international restrictions individual to each respective destination, you also need to consider the possibility of increased wear and tear.


Cross-border shipments will require that you pack them with particular care.


So, consider the size, worth, and fragility of the contents in each package. Think about whether the products being exported require specific packaging or warning labels on the packaging. For example, specific packing is required when shipping liquids and powders abroad. 

Other Legal Requirements: Taxation and Documentation

You’ll need to pay value-added tax (VAT) and various duties on any packages you send overseas. VAT, also known as goods and services tax (GST), is a cost that retailers pay on each international transaction. It is determined by applying a set percentage to each shipment, regardless of its contents. The overall VAT varies depending on the destination.


A duty, also called a tariff, is a separate payment you may have to make when sending your products overseas. Similar to VAT, each country calculates its own duties using its own percentages you have to comply with. Countries calculate the cost of duties based on the value and quantity of the imported goods as well as the cost of shipping and any insurance, as opposed to employing a single, fixed percentage. That's the main difference between duties and VAT.


Types of duties


There are two types of duties:


  • Delivery Duty Paid (DDP), in which the company is responsible for all applicable duties and fees, and 
  • Delivery Duty Unpaid (DDU), which mandates that the customer pays for duties. 


Most businesses work under the DDP model. If you opt for DDU, ensure that’s clearly communicated to customers.


When making a decision about shipping options, it is important to know the impact that a country's taxes and VAT may have on your overall expenses. Once you gain an understanding of the financial implications, you'll be able to alter your costs to appeal to customers in those countries while managing your profits

Documents

Your packages will not be going anywhere without the necessary documentation. You’ll need a commercial invoice, an export packing list, and a certificate of origin.


A commercial invoice must include the following information: 


  • The name and address of the retailer, 
  • The name and address of the recipient, 
  • The descriptions and prices of the items and their quantities, 
  • The terms of the sale and the method of payment, and 
  • The mode of transport. 


It is used to determine the products’ value and to work out the customs duties and taxes you need to pay.


An export packing list details each package's weight, size, number, and type as well as the mode of transportation and carrier information.


A certificate of origin identifies the country from where the shipment's goods were made, manufactured, or acquired, authenticated by the local chamber of commerce in certain cases and signed by the retailer in others.

Also Read: Import tax, custom duties and GST on import in Australia

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Comparing Shipping Carriers From Australia

For Australian business owners, you will have five main shipping carriers to choose from to deliver your parcels overseas: Australia Post, UPS, Sendle, FedEx, and DHL. Each carrier has its pros and cons which may make some carriers more suited to your business needs, in comparison to other carriers. 


Determine what is non-negotiable and what parts you are ready to compromise on as you weigh your options between carriers. You may choose the best carrier once you are aware of your level of flexibility regarding factors like expenses and delivery time.


For example, DHL is known as the expert in international customs practices, but they are often the most expensive option. UPS has offices and depots worldwide and will often manage your packages through the whole process of delivery. 


Each carrier offers various price options that may affect your decision as a retailer. 


We’re going to focus on Australia Post as an example of the potential shipping costs and times.

Australia Post

Australia Post is the largest delivery service in the country. For more than 200 years, Australia Post has been sending packages and letters both locally and overseas. Australia Post is still competitive when it comes to shipping goods internationally despite the fact that local shipping is their area of expertise.

Australia Post offers four different services with different prices and shipping times.

Economy: 25+ business days (estimated). You can include extras like insurance protection and signature-on-delivery. Prices for parcels start at $9.75. (This is an example cost from Australia to New Zealand.) There are two options within economy - economy air or economy sea.

From July 2023, you will need to visit the local post office in person if you wish to use their International Economy service, as it will no longer be available through MyPost Business*

Standard Delivery: estimated 6 to 12 working days with tracking included, and optional extras like insurance and Signature on Delivery are also available. Price to New Zealand starts at $15.35.

Express Delivery: 3 to 8 working days. Tracking and Signature on Delivery are included; additional covers and optional extras are also available. Letters and packages start at a cost of $28.05 and $30.35, respectively.

Courier: 2+ business days for courier between metropolitan centres. Starting price is $95.35.

The above prices may increase based on the VAT and other duties you need to pay depending on the destination and what you’re sending.


Australia Post Christmas Delivery

The holiday season is often the busiest time. It is important to understand how to navigate the festive season to ensure that your customers receive their packages in time. This means understanding when the Australia Post Christmas cut-off date is so you can communicate that to your customers.

You can calculate the up-to-date postal times for various overseas countries via Australia Post’s postage calculator

Australia Post recommends the following Christmas cut-off dates for business owners to ensure packages get to their destination in time. Please note that the following delivery estimates should be used as a general guide only as. some parcel boxes may be held longer than usual by Australian and overseas customs authorities and delivery to regional and rural areas may take longer.

Sending to Standard Parcel Express Service
New Zealand 7 December 2023 13 December 2022
US 6 December 2023 13 December 2023
UK 5 December 2023 12 December 2023
Most European destinations 1 December 2023 8 December 2023
Most of Asia 30 November 2023 7 December 2023

All parcels sent after these dates will be handled and processed as quickly as possible by Australia Post, but it's unlikely they’ll arrive before Christmas. 

For more resources on how to navigate the busy holiday season successfully, check out our holiday hub. If you need assistance managing your accounting or inventory through the busy holiday you can also get a free 30-Day trial to QuickBooks Online.

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