Going Cross-Border and Selling Globally
An ecommerce brand looking to expand its reach and start selling globally faces a number of challenges, including navigating different cultural norms, regulations, and payment systems in each target market. To successfully sell cross-border, the brand must first understand the unique needs and preferences of each market, and adapt its product offerings, website, and marketing strategies accordingly. In addition, the brand must also ensure compliance with local regulations, such as taxes and customs laws, and must have a reliable and efficient logistics and delivery network in place to meet the needs of its international customers.
However, with careful planning and a willingness to adapt to new markets, an ecommerce brand has the potential to expand its reach and achieve significant growth by selling globally.
Below, is a detailed guide on how to get started on the journey of going cross-border.
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Preparation: HS Codes & Country of Origin
Harmonized System (HS) codes are standardized system of names and numbers used to classify goods in international trade. HS codes are comprised of up to 10-digits and are used to define the product, its properties and its intended use. To classify a product using HS codes, typically the HS Code Classification Guide is used, which is a comprehensive list of goods and their associated HS codes. The classification process involves determining the product's physical and technical characteristics, as well as its intended use, and then matching these with the HS code definitions in the guide to determine the most appropriate HS code for that product.
Additionally, the country where the product is manufactured needs to also be determined.
As a best practice, it is important to create an ongoing process for gathering HS codes and coutnry of origin for new products as you do it the first time.
Learning the rules: DDU, DDP, Minimus & Limits
Shipping to global customers can be a great benefit to a brand, however, the customer's experience in getting their package is quite important to think about. Often customers have to head to the post office to pay Duties & Taxes to receive their order.
To get around this challenge, brands can collect Duties & Taxes at the time of customer placing the order and ship directly to the customer.
To do so, there are some important terminology and rules to consider.
DDP & DDU
DDP and DDU are two terms used in international shipping to describe the terms of delivery for a shipment.
DDP (Delivered Duty Paid) is a shipping term in which the seller assumes all responsibilities and costs associated with the delivery of goods to the buyer, including all customs duties, taxes, and other fees. This means that the seller will pay for all costs related to getting the goods to the buyer, including any tariffs, customs duties, or other import fees imposed by the buyer's country.
DDU (Delivered Duty Unpaid) is a shipping term in which the seller is only responsible for delivering the goods to the buyer, but the buyer is responsible for paying any customs duties, taxes, and other fees associated with importing the goods into the buyer's country. This means that the buyer will need to pay for any tariffs, customs duties, or other import fees imposed by the buyer's country, in addition to the cost of the goods themselves.
Minimus is a term used in international shipping to refer to the minimum value that a shipment must have in order to be eligible for a particular type of treatment, such as DDP (Delivered Duty Paid). The concept of minimus is used by customs authorities to determine the eligibility of a shipment for certain exemptions or reductions in duties and taxes. For example, in some countries, shipments with a value below a certain minimus threshold may be exempt from customs duties or taxes. The exact value of the minimus threshold can vary from country to country, and can also be influenced by factors such as the nature of the goods being shipped and the country of origin.
When shipping DDP, the minimus threshold is an important consideration, as it can impact the cost of the shipment for both the seller and the buyer. If the shipment value is below the minimus threshold, it may be exempt from customs duties or taxes, reducing the overall cost of the shipment. However, if the shipment value is above the minimus threshold, the seller will need to pay the full customs duties and taxes, which will be included in the cost of the shipment. As a result, it is important for both the buyer and the seller to understand the minimus threshold in their target market and to factor this into their calculations when shipping DDP.
Additionally, there can be an upper limit to the value of the order that can be shipped DDP. It is important to know the limits for each country to make sure not to collect Duties & Taxes if the order is below the minimus or above the limit.
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Partnering with your carrier
Carriers can assist with implementing DDP (Delivered Duty Paid) shipping, but the extent of their assistance will depend on the specific carrier and the services they offer.
In general, carriers can provide support with the logistics of DDP shipping, including the transportation of goods from the seller to the buyer, and the handling of customs clearance and other formalities associated with the delivery of goods to the buyer's country. Some carriers may also offer additional services, such as providing guidance on customs regulations and procedures, and assisting with the payment of customs duties and taxes.
However, carriers do not generally assume responsibility for the payment of customs duties and taxes under a DDP shipment, as these costs are typically the responsibility of the seller. In some cases, carriers may be able to facilitate the payment of customs duties and taxes on behalf of the seller, but this will depend on the specific carrier and the services they offer.
When implementing DDP shipping, it is important for the seller to work closely with their carrier to ensure that all logistics are properly handled and that all relevant customs regulations and procedures are followed. This can help to minimize the risk of delays or other issues during the shipping process, and ensure that the goods are delivered to the buyer in a timely and cost-effective manner.
Use Shopify Markets to your advantage
For brands using Shopify or Shopify Plus as their ecommerce platform, using Markets is a great advantage to going cross-border.
With Shopify Markets, brands can go global from a single Shopify store. It has powerful tools to manage language, pricing, and even calculate the right Duties & Taxes.
Shopify also offers Markets Pro which can be the right fit for up and coming brands.
If you need assistance in Markets implementation or deciding between Markets and Markets Pro, please contact us below.
Creating a marketing plan
Creating a marketing plan for going cross-border and selling globally involves several key steps, including:
Market research: Research the target markets and understand the needs, preferences, and behaviors of potential customers in those markets. Data from social media channels can be very informative as to this process.
Define your target audience: Based on your market research, define the specific target audience for your products or services. This can help you tailor your marketing efforts and messaging to appeal to your ideal customers.
Develop a unique value proposition: Articulate what sets your brand apart from others in the market and what makes your products or services unique. This can be used as the foundation for your marketing messaging. An impactful strategy for launch in a new market can be defining and marketing specific promotions for that market to create hype, for example, offering free international shipping for a limited time.
Choose the right channels: Determine the best channels for reaching your target audience, such as ecommerce platforms, social media, or targeted advertising. Consider the strengths and limitations of each channel, and choose the ones that best align with your goals and target audience.
Creating a marketing plan for going cross-border and selling globally requires a strategic approach and a deep understanding of your target market. By following these steps, you can develop a comprehensive marketing plan that will help you reach your target audience and grow your business globally.
A recommended strategy is to start with one or a few countries to be able to apply all learnings to future countries in different continents.