Mining the Gold in Global Sales While Minding the Devils in the Details…
posted on: June 12, 2006
E-commerce is uniquely positioned to take advantage of rapidly emerging international markets. However, all countries and products come with their own rules. Pay attention!
Know the Territory
Some underdeveloped countries are breeding grounds for fraud. Nigeria and Indonesia rarely offer legitimate sales. Remember: if it seems too good to be true, it probably is.
Fed Ex and UPS will provide you with “free” international guides to help you understand import rules. Meat based products from the USA are not allowed into European Union countries without proper documentation. Mexico has restrictions on Chinese made fabrics. Island countries like New Zealand and Australia fear invasive species and rarely accept plant-based products. Check the import guides.
Duties, Taxes, and Postal Systems Vary Widely
All countries charge import duties and taxes, and if the receiving client does not pay them, you will. Make sure international customers understand your terms.
It is cheap to ship UPS Ground to Canada, but UPS charges a $45 - $75 brokerage fee in addition to duty and tax. The Postal Service does not. So, go postal or consider UPS Expedited Service which bundles brokerage fees into the shipping price. Negotiate these issues with your shipping carrier.
Avoid shipping regular air mail or surface mail to countries with poor postal systems. For example, air mail delivery in Italy often takes 6 months. Mexican and Brazilian postal systems have very high theft rates of packages. When in doubt, use UPS, DHL or FedEx. The Postal Service also subcontracts reliable “International Priority” to third party carriers.
Exports are profit centers for FedEx, DHL and UPS. They will create favorable export rates and offer deep discounts. NEVER pay book rate!
Verify, Verify, Verify!!
Address verification does not work on most foreign-issued credit cards. You will generally lose charge backs. Many merchants require wire transfers for initial orders before accepting credit cards. For large dollar value orders, do a wire transfer to your bank account. If you do frequent wire transfers, have your bank set you up with a wire account. Never provide your account and routing number if it has a balance.
Avoid the Costly Mistakes….
Make sure all packages are documented properly, and the contents and values are clearly and correctly stated on the bill of lading. If customs in your destination country refuses the package, you will usually be responsible to pay for shipping in both directions. International sales can be a gold mine if you can avoid the land mines!
