Overcoming International Shipping Challenges

How to overcome international shipping challenges

International shipping is a complicated domain owing to a variety of reasons such as the costs incurred in transporting products to clients worldwide, taxes and duties, and so on. These hurdles force many small and mid-sized business owners to restrict their operations to domestic markets instead of going global.

According to Shea Felix, the General Manager of GlobalPost, a Stamps.com firm, which is engaged in helping customers ship their products outside the US, “a retailer might start off domestically and get really strong in that domestic market, then simply try to transfer that model over to international markets.” He adds that “there are many differences between shipping domestically and internationally. Chances are, the products they’re trying to send aren’t ‘classified’ or ‘prescreened’ for those markets.” By the term “classified products”, he refers to those which are eligible to enter a particular country and also properly categorized with codes which clearly describes its properties and also its relationship with other products.

“Retailers have the option to prepay duties and taxes for their customer, but they often don’t. Then the customer is surprised to learn he owes extra fees upon delivery,” he says. He confirms that this makes for a bad customer experience. Chances are that the customer will reject the package, and the retailer is left with only one option; which is to wait and hope the product gets back.

To overcome such hurdles, the retailers should work with reliable shipping service providers that ensure the easy classification and clearance of their products at the customs. In fact, many renowned shipping service companies work in coordination with delivery partners to ensure that optimal pricing and performance is taken care of.

Formerly, only large-scale retailers had the privilege of going the extra mile of international shipping with their unlimited resources and time. However, many shipping service companies have made it possible for even small and mid-sized retailers to dream about cross-border shipping of their products and promote growth.

Among the barriers to international expansion:

1. Competition on the Local Front

If you have tasted success in the domestic market, you might feel that the same formula works best in the international arena too. But if another company based in the same country sells the same product, it may already have the upper hand in attracting business. Further, you will have to cope with import duties and lower turnaround times.

An alternative solution is to search for the right partners and foster healthy relationships with local businesses when you enter a new country. The knowledge and expertise thus gained will work towards your benefit.

2. Language and Cultural Hurdles

Communication is the key to any successful business, and as such, when you expand globally, it is mandatory to know the local language in order to promote business. Further, the working patterns, customer expectations, and infrastructure provided in different countries vary considerably. If these issues are not dealt with, you run the risk of losing the customers. However, you can handle this efficiently by adapting yourself to the new environment and creating a win-win marketing strategy.

3. Issues Concerned with Tax Codes and Compliance

Handling tax codes, tariffs, compliance regulations, international trading standards, etc. while expanding globally can be quite challenging for smaller businesses. To deal with these kinds of issues, study the tax and legal angles carefully before getting started.

4. Risks Involved in Supply Chains

Handling an international supply chain is really challenging with all the shipping, imports, exports, logistics, etc. involved in it. To tackle these challenges, you need to have a strong business plan at your disposal with a budget which supports it.

As per Gartner’s 2017 User Wants and Needs study, visibility is considered as the most important driving force with regard to supply chains. This is re-confirmed by the 2018 TMS Magic Quadrant customer reference survey as well.

5. Operational Risks Involved in Hiring New Staff

You might think about hiring new staff to handle the additional pressure of your business operating internationally. However, this is not advisable as it may force you to trust new people whom you may not meet in person, and also attracts increased overheads. In order to deal with this situation, your company should be well-prepared with the products, logistics, personnel with the right skill sets and expertise, etc.

In general, if you stay up-to-date on changing market trends, new technologies, and plan your business strategies accordingly, success will follow.

To know more read: Ruling the Waves: How Politics Can Impact International Shipping

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