Are you thinking about starting your own export business or expanding your domestic business to international markets? Cashing in on global e-commerce has never been more lucrative. In fact, e-commerce is expected to become 21% of total global retail sales by 2023.
Perhaps you don’t even think of yourself as an exporter because your goal is to open up your Etsy store to international customers. Selling internationally on Etsy, Amazon, or any other online marketplace is technically considered exporting. Therefore, you need to start thinking of yourself as an exporter.
Where is the best place for you to export your goods? A standout market is Latin America, whose e-commerce grew by 36% in 2020 alone. Of course, your target market should depend on your product (or vise versa) because the two are inextricably linked. Although the region of Africa and the Middle East is the slowest-growing region in terms of e-commerce, you can still find success there if you sell the perfect product.
Starting your first export business is a whirlwind of excitement, stress, and bureaucratic jargon. Keep these tips in mind as you construct your export plan and find your first international customers. You’ll get a handle on things in no time!
1. Scams
Unfortunately, there are always people looking to take advantage of unsuspecting exporters. Whether it’s fake freight companies or deceitful customers, scams targeting export companies are more common than you might think.
It’s important to be aware of potential scams so you can keep an eye out for the bad guys. Always be wary of impossibly low prices and conduct due diligence on any company you’re planning to work with. Read up on the most prevalent import-export scams here.
2. Tariffs
Customs tariffs and taxes can get complicated, especially when you’re exporting to multiple countries. This is because each country tends to have its own set of regulations surrounding taxes and duties.
Of course, it’s vital to know how much you’ll be required to pay for tariffs so you can create an accurate budget and set proper prices. You can estimate how much you’ll owe in tariffs and taxes by using our free import duty calculator.
3. Website optimization
Perhaps you already have a website for your domestic business. It works great for your domestic customers, but will it translate to overseas customers? There are several factors to keep in mind as you optimize your website for international markets:
- Currency conversion
- Translation into foreign languages
- Mobile ordering
- Payment methods
- Culturally-conscious marketing
In many countries, mobile access is much more prevalent than computer access. Having PayPal, UnionPay, and other options aside from typical credit card payment options is essential. You’ll also want to make sure your marketing is geared towards your target audience. What sells shoes in Canada might be different from what sells those same shoes in Malaysia.
4. Insurance
Are you the type of person who checks the little box next to “Add Protection Plan” whenever you buy something? We often may just skip it or write it off as a waste of money. But when it comes to import-export insurance, it’s incredibly risky not to have it.
Without the right kind of insurance, your business could be financially liable for any damage or loss of goods, in addition to any injury, your employees sustain while transporting your goods. All it takes is one mishap to sink your business into the ground. This guide to international insurance will help you choose the best type of import-export insurance for your business.
5. Free trade agreements
As you’re thinking about which countries to export to, it’s wise to factor in free trade agreements (FTAs). An FTA is an agreement between two or more countries that puts tariff reduction or elimination in place and removes other barriers of trade between those countries.
The US currently has FTAs with 20 countries: Australia, Bahrain, Canada, Chile, Colombia, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Israel, Jordan, Korea, Mexico, Morocco, Nicaragua, Oman, Panama, Peru, and Singapore. Find a comprehensive list of Canadian FTAs here.
6. Intellectual property rights
Many businesses assume that the intellectual property rights they obtain domestically will be valid internationally. Sadly, this is not the case. It’s necessary to apply for international property protection in each country you plan to export to. Typically, this is done on a first-to-file basis, meaning you need to be the first one to register your trademark in that country.
Securing intellectual property rights abroad is particularly important if you’re selling in countries that are well-known for having counterfeit markets. The primary offenders are China, Turkey, Singapore, and Germany. If you don’t take steps to protect your brand, you’re likely to lose a lot of capital to counterfeiters as your company gains international recognition.
7. Incoterms
If you’re new to the import-export world, you might be confused by the abundance of three-letter acronyms that come up when working with your buyer. These are called incoterms. They are used internationally to define the responsibilities of each party throughout the import-export process.
Start familiarizing yourself with the terminology by checking out this introduction to incoterms. If you have any questions about which incoterms are best for your situation, reach out to BorderBuddy, your experienced customs broker.
8. Packaging
Frankly, some products aren’t suitable for international shipping. These include bulky items, fragile items, and oddly-shaped items. Choose products that can be shipped easily, and use these packaging hacks to ship them in the most cost-effective way possible.
As you’re selecting your packaging, take sustainable shipping options into account. Your customers will appreciate your efforts to go green by using compostable packaging and reducing filler materials.
9. COVID-19
While it may seem like the worst of COVID-19 is behind us, new strains and slow vaccine rollouts in some nations might say otherwise. Exporters need to stay up-to-date on how COVID-19 is impacting their target countries.
International shipping times are still significantly longer than they were before Covid. Some countries are recovering economically, while others aren’t. Some are still oscillating between economic highs and lows. Keep all of this in mind as you decide which countries to export to and which products you’ll supply.
10. Your return policy
When you’re crafting your international return policy, make sure it’s clear and easy to follow. Your customers will want to see that they can return your products if they have a problem. Those who have a bad return experience are unlikely to order from you again in the future.
If you really want to impress your international customers, include a prepaid return label with each package. Remember, it’s impossible to run an e-commerce business with 0 returns. There will always be the need for a solid return policy.
11. Paperwork
Exporting comes with a huge mound of paperwork–there’s no way around that. The more countries you export to, the more laws and regulations you’ll need to become aware of. It would be nice if a one-size-fits-all international customs document existed, but that is regrettably not the case.
Making a documentation mistake or forgetting an essential form can result in your company being charged with customs fraud. The best way to avoid this (and keep yourself from losing sleep at night) is to hire a qualified customs broker like BorderBuddy. We offer solutions for small, medium, and large businesses. Give us a call today.