There’s never a bad time to save money with international shipping, but 2018 is shaping up to be a great year to re-evaluate logistics costs.
Why?
In part, it’s because global economies are booming, which means companies and consumers alike are purchasing more goods internationally. Worldwide trade grew by a staggering 3.6% in 2017. That means retailers are shipping more, providing an excellent opportunity to reconsider old logistics habits.
That’s the good news, though. Due to rising fuel costs and increased demand, some of the world’s biggest parcel delivery services—UPS, FedEx, USPS—are raising their rates up to 4.9% this year.
Whether you’re an occasional international shipper or a high-volume shipper, a 5% increase in logistics costs is nothing to sneeze at. But this is no reason to close the door to international markets. With the right approach, you can save money with international shipping for your company and customers.
Tough Lessons on International Shipping
The rise in international shipping is thanks in large part to the global online marketplaces that now connect buyers and sellers in almost every country: Amazon, eBay, and Alibaba account for 56% of cross-border shipping worldwide.
While these companies have created successful, unified online marketplaces for retailers, logistics is not a one-size fits all approach. eBay, for example, has opened up retailers to many new international markets, but their attempts to simplify international shipping can be costly for sellers.
As The Balance explains, eBay’s Global Shipping Program (GSP) streamlines logistics by handling the process through a third party. But for certain retailers who ship small, lightweight items the GSP can overcharge them by $20 per parcel when compared to direct shipping.
Even when companies ship directly, the calculus of taxes, shipping, and fulfillment can be difficult to figure out when trying to save money with international shipping. Greater Than Games, a games manufacturer, recounted their troubles while shipping from the U.S. to the EU in an informative blog post last year.
The retailer described their international customers’ frustrations with high international shipping costs and how those costs reflect the reality of their business. Without a high volume of international customers, they will continue to fulfill international orders in the U.S., but they’re constantly looking to optimize their logistics.
Let’s explore how, with a little foresight and honesty, your business can save money with international shipping.
5 Ways to Save Money with International Shipping
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Shop Around
Based on the type of products, the size and weight of your packages, and where you’re shipping, one shipping company’s rates may not be the best solution. Compare prices based on these factors, and you’ll likely find you could pass on some savings to your customers.
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Find the Right Fulfillment Center
For smaller retailers, a fulfillment center can serve as a cost-effective way to have an international business without international offices. That’s because when you choose a fulfillment center close to your target market (i.e., Florida for shipping to Latin America or Washington for Japan and China), you can dramatically reduce the shipping time and cost as well as labor for your staff.
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Use Electronic Trade Documentation When Possible
Logistics partners and countries that offer Electronic Trade Documentation will save you time and printing costs and cut down on paper waste, because you’re no longer printing up to five copies of all the documentation. When vetting providers, check whether they accept all paperwork electronically. An added bonus is if they actually process customs documents for you.
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Never Undervalue Your Products
Some companies may try to save on customs by underreporting the value of what they’re shipping. Not only will this result in fines and penalties, but repeat offenders may lose the right to ship internationally. Honesty is worth it in the long run.
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Find a Logistics Partner with Regional Expertise
Logistics is one of the most difficult parts of running a business with international consumers. Each country has its own customs, regulations, and taxes. Finding a logistics partner with regional expertise—versus a “global” carrier—can be a huge savings in emerging regions like Africa and Latin America. Regional expertise means they understand the customs process and can help you reduce costs in the final mile delivery stage because they have access to low cost, high quality providers.
Don’t settle for expensive international shipping rates. There are better options available. With a little time spent researching, you can save money, pass the savings on to your customers, and give your international business a greater chance for success.
If you’re one of the many companies looking to break into the Latin American markets, save money with international shipping from SkyPostal. Contact us today to learn about our end-to-end delivery service, competitive costs, and fast shipping times.
