January 31, 2019 Growing Your Business en_US Expanding overseas? Your international shipping strategy is one of the key factors in how successful your global expansion will be. https://quickbooks.intuit.com/cas/dam/IMAGE/A5DOg3Lg7/f577c4a350d11a4acb91b47b94ade23d.jpg https://quickbooks.intuit.com/r/growing-your-business/what-to-consider-when-creating-an-international-shipping-strategy What to Consider When Creating an International Shipping Strategy
Growing Your Business

What to Consider When Creating an International Shipping Strategy

By Ritika Puri January 31, 2019

Your business is thriving. You’ve reached product/market fit in creating a product that people love. Maybe you’ve been in business for a few years and have built a loyal customer base. Perhaps you’re launching something totally new.

No matter where you are in your company’s journey, you’re ready to expand your customer base. But you also know that the process can be challenging, with plenty of potential hiccups.

There are oceans to cross. There are customs, tariffs, duties, taxes, and fees that you need to navigate. There are new customer support challenges that will arise—some of them unexpected.

If you don’t know what you’re getting yourself into, you could lose more than you stand to make. You might also expose your business to liabilities that you never would have expected.

With the right international shipping strategy, the hard work will be worth the reward, and you’ll keep your risks to a minimum. With the right approach and careful planning, your business has the potential to expand in unimaginable ways.

In developing an international shipping strategy, make sure to navigate the following questions:

Should I Ship to [Insert New Global Market Here]?

Let’s say that you witness a surge in demand or interest from a particular part of the world.

Does that mean you should start shipping internationally? Maybe, maybe not. There are a few points of information that can help you make the right judgment call:

  • Package delay rates
  • Fraud and theft rates in local postal systems
  • Lost package rates
  • Customs, duties, and import regulations
  • Laws for shipping batteries

Many of these variables are based on relationships between domestic and international shipping carriers. You may be able to access this data publicly. If not, work with a localization consultant or domestic shipping carrier. You may be able to access this information online through documentation from carriers such as FedEX, UPS, or DHL.

You may find that the risk associated with shipping your product internationally will be higher than the potential upside. Especially if you run a company with a strong customer service guarantee, the risk may not be worth the reward.

To meet the demands of a new global market, you’ll need to create new international shipping infrastructure for your business. Considering all the potential risks to your business will help you determine the right upside.

Will an International Customer Base Increase My Profit Margins?

Let’s say that your company is based in New Zealand, and you’re considering shipping your product to the United States.

Imagine what it takes for your goods to reach its final destination: it will cross terrain and oceans, and switch carrier hands at multiple checkpoints. You’ll also need to navigate import/export regulations across multiple countries. There are many touchpoints between the point-of-sale and path to delivery.

In some cases, it may not be cost-effective to ship your products from your home country to its final destination. But there are a few workarounds:

  • Work with a network of localized distributors. If you have a concentrated customer base in Los Angeles, California, see if you can find warehouse space in cost-effective, neighboring regions such as Central California or San Bernardino County.
  • Work with a third-party shipping and logistics provider like Ingram Micro that specializes in planning international trade routes and finding the most effective paths from points A to B.
  • Work with your suppliers or manufacturers to ship directly from their warehouses. You might even decide to source or manufacture some of your items in a completely new location.

If you’re not sure where to get started, work with a CPA, lawyer, and localization consultant. Find experts who have worked with companies like yours to ship products into new countries. Avoid errors by outsmarting them and learning from the experiences of others.

Are you Prepared to Adapt Your Customer Service and Returns Workflows?

If you’re building a presence overseas, you’ll need to tailor your customer service strategy to every international market that you serve. That means adapting to time zones and languages. Are you prepared to offer multi-language support to your customers?

To some extent, artificial intelligence (AI) can help. For instance, a Silicon Valley company, Passage AI has created a true-to-life chatbot with support for 100+ languages. A chatbot may be sufficient as your first line of communication with customers who need help. Beyond this platform, you can offer email support if you are unable to hire local customer service representatives.

No matter your support policies and capabilities, be clear with your customers. Setting expectations and being transparent can help you avoid potential frustrations.

In addition to offering localized customer support in your international markets, you also need to offer a clear pathway for returns. Asking your customers to ship a product overseas may be arduous or frustrating. For this reason, your company may need to work with a partner to manage and process returns locally.

Another solution is to avoid the potential for returns, altogether. Write very detailed product descriptions, offer lots of photos, and use a platform like Tangiblee, which helps shoppers understand the sizing and dimensions of the products they’re considering buying.

Focus on reducing your product return rates, and you’ll conserve costs for your company.

Final Thoughts

In taking steps to grow your business, be sure to have the right foundations in place. Especially in your first several years, you’ll need a real-time, accurate view of your profit margins. You need an accounting platform that can integrate with other systems that your company uses to run.

Accounting has the potential to be the weakest link in your business, especially if you run into unexpected challenges related to taxes or if you experience an audit. You’ll also need an easy way to set up payment processing systems, chargeback systems, and inventory management.

Your accounting infrastructure needs to move as quickly as your business runs—across multiple markets.

Rate This Article

This article currently has 7 ratings with an average of 2.1 stars

Ritika Puri is a marketing consultant, business sociologist, and entrepreneur who runs Storyhackers. She enjoys helping companies reach and engage with audiences who love to learn. Read more