Selling internationally is not difficult when an e-commerce operator sells primarily through platforms like eBay, Etsy, and Amazon. Those platforms have already worked out the challenges of international shipping and sales to provide a seamless experience for sellers. But any international e-commerce operator that sells through its own website has to handle everything in-house.
This can be quite a challenge, according to Preferred Shipping out of Sugar Land, Texas. Thankfully, companies like Preferred Shipping offer retailers the small business shipping solutions they need to sell internationally without too much hassle.
Speaking of hassle, here are five challenges every international e-commerce operator faces:
- 1. Collecting Duties and Taxes
Duties and taxes almost always apply to international shipping in some way, shape, or form. E-commerce operators need to know not only what those duties and taxes are, but also how to go about collecting them. Let’s say you decided to start offering sales in the UK. You would have to collect their value added tax (VAT) on your UK sales. That amount would have to be included in the published price on your site.
There may be sales for which you would be required to pay duties at the time of shipping. Other times, the duties are paid when shipments are received overseas. Either way, there is paperwork involved. It helps to work with a shipping partner or order fulfillment provider willing to handle the paperwork for you.
- 2. Classifying Products
International trade regulations require that all products shipped across borders be classified according to standardized codes. Product classification is that which powers duty and tax regimes. Therefore, countries are not very forgiving when product classification is either ignored or done incorrectly.
Most of the world follows the Harmonized Tariff System (HTS) for classifying imports and exports. Here in the U.S., we have taken the HTS and modified it for our purposes. Our version is known as the Harmonized Tariff System U.S. (HTSUS).
- 3. Local Rules and Regulations
International e-commerce shipping is often subject to local rules and regulations. In other words, shipping to a customer in Luxembourg might require that you follow slightly different rules than you would shipping to the UK. Sometimes there are even different rules among cities in the same country. Small business shipping solutions capable of accounting for local rules and regulations are an immense help.
- 4. Payment Systems
Above and beyond things related to customs and trade compliance, e-commerce operators must give thought to the payment systems they will utilize for cross-border sales. There are some payment systems that are accepted globally. Others only exist within a given country or region. And of course, there is the cryptocurrency issue to consider. Does a retailer want to deal in crypto transactions?
Making a go of it globally is all about offering the preferred payment methods in each country in which you sell. Offering local favorites is a good way to boost sales and create customer loyalty.
- 5. Currency Conversion
Along with payment systems comes currency conversion. While your payment provider may convert international payments into U.S. dollars for you, customers prefer seeing pricing in their own currencies. Otherwise, it is difficult for them to understand just how much they are paying for a given product.
There is a lot that goes into selling across borders. For the e-commerce operator, the many challenges of international sales do not have to stunt growth. With a little knowledge, a willingness to learn, and the right partners, e-commerce operators can successfully expand into international markets. Each new market represents a larger customer base and increased revenues and profits.
