How US Sales Tax Works

Author: Mark Faggiano  |  November 8, 2017

When selling online you should understand the laws around sales tax throughout the United States. From products to shipping costs, there are rules and regulations around taxes that differ from state to state and item to item. Our partner, Tax Jar, has written a piece to share their sales tax expertise.


coins-currency-investment-insuranceFor a variety of reasons, the United States has managed to build one of the most complex and downright confusing sales tax systems in the world. And as an online business owner, it’s important that you wrap your head around this system so you can at least keep your head down and collect the right amount of sales tax from the right customers.

This quick sales tax 101 guide will explain the ins and outs of U.S. sales tax for online sellers so you can get back to doing what you do best – running your eCommerce business.

Sales Tax is Governed at the State Level

It’s a common misconception that all tax in the U.S. is administered by the IRS. In fact, the U.S. has no federal level sales tax, and no overarching governing body. Instead, sales tax is governed at the state level.

This means that each state gets to make their own rules and laws about things like sales tax rates, which merchants have to collect sales tax, and what items are taxable. It also means that as an online seller, if you have to deal with sales tax in more than one state, you’ll probably find that each state is quite different.

Online Retailers Don’t Always Have to Collect Sales Tax in Every State

One thing online retailers are often surprised to learn is that they aren’t generally required to collect sales from every buyer. Instead, in the U.S., online sellers are only required to collect sales tax in states where you have “sales tax nexus.” Sales tax nexus is just a legalese way of saying “obligation to collect sales tax in a state.”

Each state gets to decide what creates nexus. Common factors that create nexus are having a location, employee or inventory for sale in a warehouse in a state. You can read what each state says creates sales tax nexus here.

Sales Tax Rates Vary from Place to Place

Sales tax is a percentage of a sale that is collected by a retailer and then remitted to a state (and sometimes local areas). Those state and local governments use sales tax to pay for budget items like schools, roads, and fire departments.

Sales tax rates vary from state to state and between local areas.

States set a statewide sales tax rate. Then most states allow local areas – cities, counties and other special taxing districts – to also set a sales tax rate. This means that most areas have a combination of several sales tax rates.

To see how this breaks down, let’s look at the sales tax rate in Marion, Illinois:

6.25% Illinois state sales tax rate

1% Williamson County sales tax rate

1.5% Marion city sales tax rate

8.75% combined total sales tax rate

In other words, if you were buying a toothbrush in Marion, Illinois, you’d pay 8.75% in sales tax on your purchase.

Though there are a few exceptions, as an online seller, you generally charge your buyer sales tax at the sales tax rate of their ship to address. (I.e. if you sold that toothbrush to the buyer in Marion, Illinois, you’d collect 8.75% in sales tax from them.)

Product Taxability Varies from State to State

In the U.S., most “tangible personal property” is taxable. But there are some exceptions, which can vary from state to state. Items like groceries, clothing, medical supplies and textbooks, among other things, are sometimes nontaxable in some states.

For example, clothing is not taxable in Pennsylvania, textbooks are not taxable in Kentucky, and groceries are not taxable in most U.S. states.

Things can get even more complicated. For example, clothing in New York is non-taxable, as long as it’s priced at $110 or less. And while the New York statewide sales tax rate is not applicable clothing priced under $110, some local areas still consider clothing taxable. As another example, groceries in Illinois are taxable, but only at a reduced rate of 1%. Fortunately for online sellers, automated sales tax collection engines can take all these state rules and laws into account so you don’t have to worry about accidentally charging sales tax to the wrong customer in the wrong state on the wrong item!

Shipping Charges are Taxable (Usually)

As an online seller you, of course, get your items to your customers by shipping them. And many online sellers charge a small fee for shipping. It’s important to note that more than half of U.S. states consider shipping to be a taxable charge.

Let’s say you sell a Nintendo Switch for $300 plus $10 in shipping to a buyer in a state like Michigan, where shipping charges are taxable. You’d be required to charge your buyer sales tax on the entire transaction cost – $310.

But say you sell that same Nintendo Switch for the same price to a buyer in a state like Missouri, where shipping charges are not taxable. In that case, you’d only be required to charge sales tax on the $300 item price and not the $10 shipping charge.

You can see which states require sales tax on shipping here.

Sales Tax Administration Varies from State to State

If you deal with sales tax in more than one state, you’ll probably notice many differences from state to state. However, there are a few general rules of thumb.

First, most states want you to file sales tax returns either monthly, quarterly or annually. (Though some will want to hear from you semi-annually or on a fiscal annual basis.)  Usually, the more sales tax you collect from buyers in a state, the more often the state will want you to file and pay sales tax.

States also set their sales tax deadlines on different days of the month. While more than half of the states set the sales tax filing deadline on the 20th of the month following the taxable period, others have due dates on the last day of the month, the 15th, the 23rd, or some other date.

And about half the states with a sales tax even provide sales tax discounts to filers who file and pay on time. This means states will let you keep a small percentage (usually 1-2%) of the sales tax you collected from customers. It’s free money!

I hope this post has helped you wrap your head around the sales tax system in the U.S. For a whole lot more about U.S. sales tax, check out our Sales Tax 101 for Online Sellers guide, or start the conversation in the comments!

TaxJar is a service that makes sales tax reporting and filing simple for more than 10,000 online sellers.  Try a 30-day-free trial of TaxJar today and eliminate sales tax compliance headaches from your life!


About the Author

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Mark Faggiano is the Founder and CEO of TaxJar – a service that automates sales tax compliance for over 5,000 eCommerce businesses. Mark has built a career around his passion for using technology to solve complex problems that hamper growth for small businesses. He previously co-founded and grew FileLater to become the web’s leading tax extension service for both businesses and individual taxpayers before it was acquired in 2010.

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2017 Holiday Shipping Cutoff Dates

Author: Ashley Overton  |  October 30, 2017

cuttoff-dates-2017-blue-min

Let’s end another holiday season with timely shipping!

We want to ensure everyone has a jolly holiday season this year, so we have created a quick summary of holiday shipping cutoff dates for a few of the major carriers. We hope this guide helps you remain stress free this season and reminds you to keep on top of cutoff dates for all the carriers you plan to use this year.

UPS

The UPS year-end holiday schedule starts in November for Thanksgiving and ends in January. You can download the full schedule from their site to ensure easy access. And, if you are shipping internationally this holiday season, take a look at UPS’ World Holidays schedule which maps out 3 months of global holidays. There are plenty of holidays to be mindful of around the world between the months of October and December. Below you will find a summary for the most frequently used UPS services.

Service Ship By Notes
UPS Ground Contact UPS Dependent on origin and destination
UPS 3 Day Select December 18th US Domestic shipments only
UPS 2nd Day Air December 20th US Domestic shipments only, some limitations in Alaska and Hawaii
UPS Next Day Air December 22nd US Domestic shipments only, some limitations in Alaska and Hawaii

* Between Nov 20th and Dec 30th, a limited number of UPS Ground and UPS Standard packages that have transit times of three or more days and specific origins and destinations will require an additional day in transit. Contact UPS for more information.

FedEx

FedEx has published the last days to ship to ensure your orders are delivered by December 25th. Those needing to ship a last minute delivery will be happy to know, the FedEx SameDay delivery option will be available 24/7 for urgent deliveries (even on the 25th). FedEx also has you covered for your international shipments, you can find rates and transit time for global delivery here.

Service Ship By Notes
FedEx Home Delivery & FedEx Ground Contact FedEx US Domestic shipments only, excludes Puerto Rico
FedEx First Overnight December 23rd US Domestic shipments only, excludes Puerto Rico
FedEx 2 Day December 23rd US Domestic shipments only, excludes Puerto Rico
FedEx Priority Overnight December 23rd US Domestic shipments only, excludes Puerto Rico
FedEx SameDay December 25th US Domestic shipments only, excludes Puerto Rico

USPS

USPS has published holiday mail-by-dates for all their domestic and international services to help everyone avoid the holiday rush. If you have a loved one in the military, you will want to keep their Military Holiday Shipping Deadlines in reach as well. Below you will find a summary for frequently used USPS services.

Service Ship By Notes
First Class Mail December 19th US Domestic shipments only
Priority Mail December 20th US Domestic shipments only
Priority Mail Express December 22nd US Domestic shipments only

These summaries will serve as a great starting point as you plan for the holiday season, but should not be used as the only resource for your shipping management. These summaries only contain information for some of the major carriers, and you should keep up with restrictions and cutoff dates for every carrier you use. The carrier’s website will hold valuable information, but remember you can contact your carrier representative with more specific questions and concerns.

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3 Ways to Combat Cart Abandonment by Reducing Unexpected Costs

Author: Melanie Fatouros-Richardson  |  October 12, 2017

Unexpected costs are never a happy site. Our partner, Bold Commerce, explain how unexpected costs, such as shipping, can lead to cart abandonment and share tips to help you combat the problem.


You spend hours a week on Instagram, pour all your profits back into Facebook ads, and agonize for days on making the smallest changes on your online store, all to try and get customers to your store.

But what about once they actually land on you store? With abandoned cart rates hovering around 70%, your store is literally leaving money on the table if you’re not putting time into decreasing cart abandonment.

With hundreds of long, drawn out cart abandonment articles out there, we wanted to give you a quick, no nonsense guide on 3 ways you can combat cart abandonment on your store by the end of the day.

Let’s get started.

Reduce unexpected costs

unexpected costs chart

Nothing will make a customer leave the checkout page faster than seeing a total higher than they were expecting. In fact, 60% of shoppers said that being presented with unexpected costs is the reason they leave without completing their purchase.

That’s over half your customers!

Here’s a few ways you can cut down confusion on your site and keep customers in your check out.

Shipping

A customer should never be surprised by shipping costs. Have a section on your website clearly explaining your shipping policies and display that info on your homepage. Better yet: offer free shipping.

A Deloitte study found 69% of shoppers are more likely to shop with online retailers who offer free shipping. Take a look at this article to see if you can afford to offer free shipping on your online store, and 10 commonly-used ways to offer your customer free shipping.

If you can’t afford to offer free shipping on all orders, a great way to increase sales AND reduce unexpected costs is to offer free shipping over a certain dollar amount. Think: Spend over $100 and get free shipping.

Currency Conversion

Save your customers the time and hassle of figuring out how much their order will be by displaying prices in their local currency (based on their location). I don’t know about you, but if I don’t know what the total of my items are, I almost never follow through with the purchase.

And I’m not the only one. 13% of online shoppers say they’ll abandon their cart without paying because the price is in a foreign currency.

The good news is this is an easy fix. If your online store is on Shopify, there are tons of apps you can download that will do the conversion for you. I’m slightly biased, but my favourite one is Bold’s Multi-Currency app . It lets your customers shop in any currency they like. You can use its powerful built in geo-location service to auto-select the currency, or give your customers the option to choose from a beautifully styled dropdown with flags.

multicurrency Nike image

Unexpected taxes and fees

Have you ever booked a trip online? There are two ways prices are usually displayed: a total price including taxes and fees or the price before they’re added on.

That might seem simplistic, but the twist comes with the fact that you almost never know which price you’re seeing!

FlightHub does it right by not only posting the total price, but letting us know that’s what they’ve done.

Make sure to clearly label on your site the total price your items on your product pages. It doesn’t matter if you have additional fees, it matters if you’re hiding them from your customers.

Get out there and make a change

It’s one thing to read about how to reduce your abandoned cart rates on your Shopify store, and a whole other thing to actually do something about it.

I challenge you to implement at least one of the above ideas on your store by the end of the day: don’t just think about it, or say you’ll take a look later this week, login right now and make the change. And don’t forget to let us know in the comments below when you do so we can all follow along.


About the Author

Melanie Fatouros-Richardson is a Content Marketer at Bold Commerce, where she helps store owners grow their businesses. Follow along to learn more about eCommerce and tips & tricks for selling online.

 

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The Importance of Creating a Strong Shipping Strategy for Holiday Sales

Author: Chad Rubin  |  October 3, 2017

With the Holiday Season coming up it is important to remember the importance of creating a shipping strategy that complements your overall Holiday Sales Strategy. Our partner, Skubana, has shared valuable knowledge on Holiday sales and creating a shipping strategy.


2017 Holiday ShippingIn 2016, holiday sales made up approximately 10.6% of all retail sales for the entire year, or 21% of total sales for quarter 4. Ecommerce holiday sales (especially Christmas), are rising year over year, with an increase of 17% from 2015 to 2016 (compared to a drop of 12% for brick and mortar sales for the period), and are expected to rise another 14% for the 2017 Christmas season.

Ecommerce sellers, especially those on Amazon, understand the importance of holiday sales, simply because sellers with the right products see huge increases in order volume. Many also invest heavily in creating sales and marketing campaigns designed to boost this further, even stocking additional products to meet seasonal demand. Keeping up with these increased sales means developing a fulfilment strategy and logistics solutions to ensure that customers receive their orders, you do not sell out of product, and you are able to keep your operation running smoothly.

Another consideration is that the additional expense of marketing and sales typically reduces profit per product. Even though you still see a profit, you’re earning less per sale. By ensuring that customers are happy, you can generate a similar or higher value per sale by generating positive reviews and customer awareness, which will function as social proof to increase sales throughout the rest of the year.

Unfortunately, because of the nature of holiday sales, many stores are left overwhelmed with the increase in order volume, unable to keep up, and sometimes unable to ship products out on time.

By creating a strong strategy to ensure that your shipping, fulfilment, and customer service solutions will meet the increased demand, you can ensure that your store benefits from the holiday sales.

Calculating your Potential Sales

The first step to creating a quality fulfilment strategy is to determine how much you are likely to sell, what you need, and how you need to distribute it. Depending on the age and organization of your store, you can achieve this in a few ways.

For example, if you have strong records from 1 or more years previous, you can use this to calculate potential sales by tracking the previous year’s percentage in sales increase with your current rate of sales growth. So, if you have an average of a 15% sales increase for the holiday period for the last 3 years running, you could use that to calculate what you are likely to sell.

If you don’t have that data, are a new ecommerce store, or have introduced significantly new products, or become popular in ways that mean that previous year’s data won’t be applicable, you will have to use other data to predict possible sales.

For example, you can compare your current turnover rate or use industry benchmarks in combination with your current rate of sale on a per-product basis to predict how much your sales are likely to increase. Combined with increases you expect to see for campaigns, you can get a general idea of what to plan for.

Developing Solutions

Once you know how much you are likely to sell, you can create a framework to support that volume of sales. Your primary concerns are likely inventory (you cannot likely afford to sell-out of a seasonal product), labor (can your warehouse staff support the increased demand), and warehousing.

This means reviewing your current capabilities, determining if you can increase sales without adding on additional employees, and reviewing your space and storage solutions.

  • Determine an inventory order management system that will prevent stock-outs. You may need more inventory or you may have to order more frequently depending on your pipeline
  • Identify peak order times and integrate scalable order processing, either using automation or by bringing in additional employees to handle peaks.
  • Integrate extra quality checks for the holiday period. People who are overworked are more likely to make mistakes, and when products are gifts, returning them on time isn’t always possible.
  • Create a system that allows you to change orders from warehouse to warehouse quickly, so that you can solve stock-outs or other logistics problems.
  • Use multiple shipping providers, so that you can distribute increased deliveries among them without overwhelming any

Outsourcing to Third-party Solutions

Whether you already use a third-party solution or ship everything in-house, third-party logistics (3PL) and solutions like Fulfilment by Amazon (FBA) can be extremely helpful during the holiday season. For example, Amazon accounts for about 30% of all online sales during the holiday period, having a presence on Amazon and relevant products almost guarantees you an increase in sales. Using FBA not only boosts sales further, it takes shipping and logistics out of your hands. Amazon will deliver products themselves, typically offer free 2-day shipping, and handle returns and customer service. This can be a great way to meet sales demand while reducing the load on your own warehouses and systems.

Similarly, 3PL can enable you to reduce the burden on your warehouses while speeding up shipping and delivery. Many third-party logistics companies are international, have warehouses around the country, and can offer a variety of packaging solutions – which means faster and cheaper fulfilment.

In both cases, the only possible concerns for using either solution is increased costs (slightly in the case of 3PL), lack of control over the shipping process (but handled by professionals), and splitting your inventory. For these reasons, you should review your options and your existing relationships, as well as your potential sales to determine if either or both are an option for you.

Boosting Customer Satisfaction

Making your customers as happy as possible ensures that you derive real value from each sale. By boosting customer satisfaction, you will increase positive reviews and word of mouth across the web, which will boost your sales for the rest of the year.

For example, if you choose to adopt 3PL you can likely easily include a printed return label with every product. Customers can use it for free return shipping on products, and it won’t be charged to your account until sales are made.

You can also take steps to work with customer service so that you prioritize customer satisfaction over immediate profit. This means increasing your number of service representatives so that you can respond quickly to all inquiries, managing the quality of responses, sometimes accepting returns for no reason, offering expedited shipping free of charge and replacing items quickly when you have made a mistake, and so on.

Because many holiday shoppers are looking for gifts, they need them by Christmas (not always the case as many shoppers are just taking advantage of sales) – so taking steps to expedite any returns and replacement products to make that happen will greatly increase customer satisfaction.

Finally, it is crucial that you have a strong internal management system to ensure that your inventory management, quality control, and customer service are on track and running smoothly.

Preparing a strong fulfilment strategy for the holidays will ensure that you can meet demand, keep customers happy, and make the most of the holiday sales.


About the Author

Chad Headshot resized

Chad Rubin took his family vacuum business online and built his own direct to consumer ecommerce business called Crucial Vacuum. He grew it from 0 to a $20 million dollar valuation in just 7 years. He happens to be a top 250 Amazon seller. He co-founded Skubana with DJ Kunovac and built one of ecommerce’s hottest operational softwares.

 

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USPS API Changes Sept 1st 2017

Author: Karen Baker  |  September 1, 2017

USPS on September 1st 2017  has changed their ‘First-Class Mail Parcel” Service to “First-Class Package Service – Retail”.

There are other changes as well, see Pitney Bowes for further details.

ShipperHQ Customers

Any customers using ShipperHQ will see no disruption of service.

Other eCommerce Users

For those customers NOT using ShipperHQ please see following notes re each platform:

Magento 1.x

NO Change is required for ShipperHQ Customers.

If you are using WebShopApps Dimensional Shipping and in your year’s support then contact our support for an update. Outside of this you will need to follow the instructions below and update the USPS.php file in the extension. All other extension users will need to follow the advice below.

You will need to alter the USPS implementation to use the new Shipping Method Name. Please note: We do not recommend you update the core files directly, so you should follow procedure to create a patch here (we would hope Magento Inc have released a patch already as this is service affecting). The following comments show you where the changes are.

Look for the file app/code/core/Mage/Usa/Model/Shipping/Carrier/Usps.php

Search for ‘method_to_code’.  You will see like following:

Magento 1 USPS API Change

Update to replace ‘First-Class Mail Parcel’ with ‘First-Class Package Service – Retail’ (this is a single dash). Its extremely important you spell this exactly as is else it will not be able to match.

Magento USPS after API Change

Optionally you can update the Shipping method name used, search for ‘0_FCP’ and you will see:

USPS Shipping Method Name Update

In app/code/core/Mage/Usa/etc/config.xml replace any occurrence of’First-Class Mail Parcel’ with ‘First-Class Package Service – Retail’.

In the Magento Admin panel you will need to refresh your shipping methods and select this new ‘Allowed Method’, else it still won’t display.

Magento 2.x

NO Change is required for ShipperHQ Customers.

The changes above apply, the directory locations are just different. See under vendor/magento/module-usps/Model/Usps.php.  

Shopify

We have confirmed that First-Class Package Rates are showing (updated Sept 3rd).

BigCommerce

Please contact your BigCommerce Rep if you are no longer seeing the correct USPS First-Class Mail Parcel(Package) Rates. In our testing we are able to see First-Class Rates, though not able to ascertain which.

About ShipperHQ

ShipperHQ is a storefront shipping management solution which gives you incredible flexibility in managing your shipping rates. Even for customers using Free Shipping ShipperHQ is a must, we include capabilities around Time in Transit, Pickup from Store, Address Validation, Multi-Warehouse, etc etc.  We also keep upto date with the APIs and worry about this stuff so you don’t have to ;).  We offer free migration services for WebShopApps customers. We are available on BigCommerce, Shopify, Magento 1&2, and WooCommerce.

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International Freight 101: Navigating the Waters

Author: John Edmonds  |  August 8, 2017

Shipping internationally via freight can get a little tricky, so we’ve invited our partner, Freightos, to share steps and tips on the end to end process of International Freight.


If importing had a Facebook relationship status, it would be “It’s complicated.” But that doesn’t mean importing should be off the table.

Nutmeg is the proof. Seriously.

In the 15th century, you could buy 125 pounds of nutmeg in the Indian Ocean’s Banda Islands for the equivalent of $3,000 dollars today. Back in Paris, it would sell for $2.1 million dollars (markup, baby!). International trade is all about supply, demand, sourcing costs and transportation. So when a seller can source cheaper overseas, why not?

And here’s the good news. Importing has gotten easier since the 15th century. Here’s the basics, brought to you by Freightos.

Avoid Product And Packaging Shipwrecks

iStock-585514502_1200x800Not everything is import-perfect. Sourcing overseas literally opens a world of opportunity but don’t forget to do your due diligence for each product:.

  • Make sure that Customs, the FDA and other agencies haven’t imposed restrictions on the product. Even products like cosmetics, wood or aluminum can be a problem. Check out the product on an HS lookup table (basically a standardized global product lookup table) or with a simple Google search.
  • Make sure that your products aren’t subject to hefty anti-dumping duties (colored pencils are!) or defined as hazardous for air or ocean shipping.
  • Intellectual property, copyright and trademark all impact importing matters. If the product is a big brand product (or uncannily similar to one), read up on it first.

Packaging is tricky – too little and your product arrives in pieces, too much and you literally pay the price, as overzealous packaging makes freight costs skyrocket. This is particularly true when shipping by air, where size and weight matters far more than ocean freight. Here’s some more hints:

  • Get your supplier to use the smallest possible boxes and make sure they fit well on pallets. 
  • If you have a say on product packaging, get creative product packaging ideas that look great but are the right size to minimise costs.
  • Try to only palletize goods after US customs clearance. Why pay to ship pallets around the world?
  • Double-box fragile products to add extra cushioning. Use bubble wrap in the first box, unless you are sure that your warehouse permits styrofoam peanuts. Head’s up – Amazon doesn’t!
  • Clearly mark carton count, gross weight, net weight, country of origin and tracking labels on every box and carton.

The Sales Agreement: Your Voyage Starts Here

Factor in freight costs from Day One of working with your supplier. International freight relies on eleven incoterms, categories that define freight responsibilities for your and your supplier. Like the tax law, they’re important, complicated and boring. So, either read the regulations, follow this concise summary for beginner importers…or go safe and opt for FOB or EXW.

What do they mean? Free On Board (FOB) is when the supplier pays all costs to get the shipment loaded at port, including customs on their end, while you arrange everything else, including international transit.Ex Works (EXW) means you’re arranging, paying and are liable for the entire shipment from their warehouse. Depending on the supplier’s negotiated rates, this could vary so check out  this freight rate calculator when deciding.

Let A Forwarder Be Your Navigator

As appealing as it may seem, never try to import alone – ship happens. A (good) freight forwarder that can arrange and troubleshoot international shipments is what you need. But finding the right one can be hard…and Yelp won’t help. Typically, it’s come down to a combo of relying on word of mouth and luck but new solutions, like Freightos online freight marketplace,help find the right forwarder for each individual shipment.

When you do find a forwarder, make sure you:

  1. Have your supplier copies of the packing list and commercial invoice – you’ll need them.
  2. Decide if you’re shipping by air or ocean. Air freight is quicker, and not necessarily more expensive for a smaller shipment.
  3. Sending to a fulfillment center requires can require inspect and prepping – make sure you know if you need your forwarder to help with that.
  4. Get cargo insurance –  it’s an absolute must, as default carrier insurance is pitfully low.
  5. Calculate your total weight and total volume (this should be on the packing list).
  6. Write down the precise product description from the commercial invoice or ask your supplier for the HS code.
  7. Find your US company tax ID, which you’ll need for customs records.

Navigation From End To End

There’s roughly one trillion international freight documents which you’ll discover along the way but you’ll probably encounter the Bill of Lading (or airway bill of lading), commercial invoice and freight quote first (you can see a list of key documents here). More importantly, get ready to triple check the data on the forms you provide to your forwarder – even tiny discrepancies can lead to costly delays.

Here’s a simplified process of what your forwarder will be arranging:

  • Trucking to pick up and deliver your shipment to a consolidation center.
  • Load consolidation (if you’re shipping less than a container load, your shipment will get put in a container with other shipments)
  • Trucking to port.
  • Customs clearance.
  • Loading by port authority.
  • International transit (ship or air) …
  • the same steps in reverse in America.

Speaking of customs, you’ll need a customs bond to import. Ask your forwarder whether you should get Continuous bond or Single Entry Bond (plus ISF bond for LCL ocean freight) – this will depend on how often you’ll be importing.  Also, if you are planning on importing regularly, set up your own Customs account. It’s quicker and easier in the long run.

The Bottom Line

Just to make sure you were paying attention, here’s the things to watch out for on a typical shipment:

  1. Check import, carrier and IP restrictions when selecting a product.
  2. Check out packaging restrictions (and opportunities) too.
  3. Think incoterms when negotiating your sales agreement.
  4. Gather information before requesting quotes.
  5. Once you have a forwarder, get them to take you through the shipment process.
  6. Double-check all documentation.
  7. Make your shipment hassle-free for Customs, so that Customs is hassle free for you.
  8. Leave delivery to your international forwarder.

And, of course, check out the Freightos Marketplace, which makes the process much easier, with a one-stop shop for comparing instant quotes from 30+ forwarders, online booking, shipment management and 24/7 support…hold the nutmeg.


About the Author

John Edmonds is a logistics expert who loves writing about freight (who doesn’t) at Freightos. When he’s not, he enjoys Miso soup, cats and cricket (the game, not the insect).

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Capturing More Leads Through Your Ecommerce Website

Author: Robert Rand  |  June 20, 2017

We know the process of capturing a sale begins much earlier than once a customer reaches the shopping cart and checkout. So, we have invited our partner, Rand Marketing, to share their expertise on earning more sales through your ecommerce website.


Just because your primary objective is to make immediate eCommerce sales does not mean that there aren’t additional opportunities to communicate with shoppers in order to earn more sales. Think of it like a physical store: there are benefits to having salespeople readily available to help customers. There are also upsides to making it easy for a customer to request to receive ongoing communications from your business.

In the world of eCommerce, there are two major types of leads that you may run into.

Hot Leads

These are shoppers who have questions and are hoping to get specific feedback or answers. You can capture these leads through some of the following methods:

Phone: It’s recommended to have your phone number easily accessible. Often they are located in the header and footer of the site as well as your Contact page.

Contact Forms: Whether a simple Contact Us, more detailed Custom Quote Request or Wholesale Account Request form, making it easy for shoppers to submit inquiries 24/7 gives you an opportunity to capture their information.

LiveChat: Shoppers may be multi-tasking, or may otherwise not be interested in speaking with a representative (there’s a whole new generation for whom texting is a mainstream form of communication). Chatting with an operator right through your website helps shoppers on their terms. It also gives you an opportunity to pop out and offer assistance, much like a traditional sales clerk might. Services like Oct8ne help you to act like a personal shopper, showing recommended items on the client’s screen, and helping to add to the cart. If you don’t have the resources to man the lines, newer services like Proonto offer a wide selection of chat operators that you can select and train. Other services like AltoCloud can help connect you via Text Messages, Facebook Messenger, and a variety of other mediums.

Address: If you have a physical address that’s available to the public, some shoppers may opt to see items in person. Since not all eCommerce sites have brick-and-mortar locations, making it clear that you do can be beneficial and can also help establish your brand as being more public and rooted in some ways.

As a fringe benefit, some shoppers that won’t ever call you for one-on-one assistance will appreciate knowing that they could if they needed to, making it more likely that they’ll make a purchase while browsing through your site.

The Long Game

While leads that are ready to “buy now” are of course the most prized, there are direct and indirect costs to getting shoppers to your site, and opportunity costs to letting them leave empty handed. To solve these situations, you can consider efforts such as:

E-mail Marketing: Collecting Email Addresses is a great way to stay in touch. While you may not make an immediate sale, you’ll get more chances to do so by keeping your store “top of mind” with consumers. If a shopper has left an item in their cart, you may even be able to follow up with an Abandoned Cart Email, making it easier for them return to the shopping cart on your website and finish placing their order. For some websites, this can also extend to sending offers via Text Messages, Direct Mail, and other mediums.

ReMarketing & ReTargeting: By using cookies and Email addresses, you can target consumers who have visited your site with ads. These ads may appear on sites, like news websites and blogs, as they traverse the internet. It’s a great way to reinforce your brand, and remind them to come back and complete a transaction. This can be tapered so that it’s done tastefully and reasonably.

Social Media: When a user follows your business on social media, they can become privy to posts that you make in those social media accounts. Like email marketing, this can be a great way to stay in touch long-term, and let shoppers know about new products, discounts, and other opportunities.

Mobile Apps: If you offer mobile apps, getting consumers to download them to their smart devices can provide multiple benefits. They will see your logo while scrolling through their apps, which is great. You also get opportunities to send them push notifications with new offers, like sales.

If you’re not sure how to best optimize your website to capture both eCommerce sales and leads or need help with digital marketing campaigns to stay in touch with shoppers, consider requesting a free consultation from an internet marketing firm. Such teams can discuss how they can help you meet your long-term goals of improved conversion rates.


 

About the Author

Rand Marketing Headshot resizedRobert Rand is the Chief Technology Officer at Rand Marketing in Fort Lauderdale, FL. Educated at NYU’s Tandon School of Engineering, Robert has managed the development and marketing of hundreds of websites and helped to lead Rand Marketing to become a Google Premier Partner Agency, an INC5000 Company, and a long-standing A+ business with the BBB. He’s best known as one of the foremost experts in eCommerce strategies in the USA and is proud to work side by side with one of the industries best teams of designers, developers, and digital marketers.

 

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The Importance of Packaging in The Ecommerce Experience

Author: Phoebe Haig  |  June 13, 2017

We have invited our partner, JH to discuss what an important role packaging plays in winning back current customers and how to complete your customers’ ecommerce experience with shipping.


Not only does packaging protect your product, it’s the first thing that your customer sees in person from your eCommerce business, and so it’s absolutely crucial to get it right.

A massive part of building a sustainable brand is bringing customers back, time and time again. Often relatively ignored by marketers who’re more usually focussed on gaining the attention of new customers, it’s almost always less expensive and more powerful, to get a current customer to purchase again, than it is to go out and try and attract new ones.

In a survey from Dotcom Distribution they found that 52 percent of consumers are likely to make repeat purchases from an online retailers that deliver premium packaging experiences.

Customers as Brand Advocates

The report by Dotcom also found out that 39% of the respondents had shared a picture or a video of new purchases, most commonly using Facebook (84%), Twitter (32%), Instagram (31%), YouTube (28%) and Pinterest (20%).

Personalization in packaging adds a level of excitement that allows you to create a genuine relationship with customers, and people are hardwired to want to share great experiences, which is why social media is filled with people sharing their news. When your product features on your customer’s news feed, you want to make sure it’s for all the right reasons.

When customers receive a product with premium packaging and a personalised note thanking them for the purchase, the feeling of trust and satisfaction is amplified.  It turns customers into brand ambassadors – one of the strongest assets a company could have. They become advocates of your brand and they’re the people that will create word of mouth, which is an age-old promotional tool businesses can’t prosper without.

Packaging as a Marketing Channel

The sky’s the limit on how unique and memorable you want your customer’s experience to be. Though the use of packaging, you can create a unique experience that acts as a marketing channel in itself.

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Paul Smith like to think outside the traditional box and use cylinders and other shapes to surprise and delight their eCommerce buyers, when they buy smaller items like ties and socks.

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Thelma’s make ice-cream cookie sandwiches (yep, how divine!) and they’ve become well known for their quirky and kitsch oven boxes. The packaging cleverly serves to remind the customer of their brand promise: “Our cookies are made fresh and delivered warm right out of the oven.”

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Our all time favourite though, is from bike manufacturers Vanmoof who realised they could use packaging to solve a problem. When bike sales moved online, manufacturers had to think of better ideas of making sure their products arrive safely with their customers.

What did Vanmoof do? Instead of putting a picture of a bike on the box they printed a picture of large flatscreen TV instead and saw instances of delivery damage drastically reduce.

What to Consider

When Amazon’s boxes with their “grinning” A-Z logo show up, everyone knows their Amazon delivery is here. How can you make sure your packaging is just as recognisable to your customers, and creates the same sense of excitement? Here are the elements you’ll need to think about.

  • Box – The first thing to consider is the main shipping box. And size matters due to shipping costs, so be strategic.

  • Tissue Paper – Wrapping your products in tissue paper adds a sense of premium around your product. Custom-printed tissue paper, even more so.

  • Filler – Traditional filler types included styrofoam packing peanuts, foam inserts, air pillows or bubble wrap. All protect your product, but also can add a sense of luxury when done right too.

  • Sticker – Branded stickers be used to fasten tissue paper – for their price they’re a pretty inexpensive way to add a quality feel.

  • Custom Note – It may be difficult to scale, however, for smaller companies, a customised note – handwritten being the ultimate – will always be gratefully received.

  • Free Gift – A small gift can be a great way to surprise and delight customers as well as increase the overall experience.

  • Sample – Based on your customer segmentation data, you could also consider including a sample that is likely to cross-sell the customer by introducing them to new products.

Creating a memorable experience at this crucial part of the customer journey, can help to give your business the competitive edge, by seeing customers come back again soon for more of your products.


About the Author

Phoebe Haig is the Marketing Manager at JH. She blogs (link:www.wearejh.com/blog) regularly on tips and news for the world of eCommerce.

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A BBQ Restaurant Eliminates Their Shipping Pains and Increases Efficiency with ShipperHQ

Author: Ashley Overton  |  June 7, 2017

This success story highlights a ShipperHQ merchant selling a wide array of items online including perishable goods and how they transitioned from using a custom shipping solution to become more efficient.


rudysRudy’s BBQ and barbeque in general is known as a staple of Texas and many other states of the south. Rudy’s began its journey as a gas station and general store near the University of Texas, shortly after opening they decided to expand and offer great homemade food for a modest price. They have since opened in multiple states throughout the South and even have an online menu so all their fans around the US can enjoy their meats, rubs and sauses.

The BBQ company expanded to the ecommerce market in 2001 only selling sauces and rubs. In order to handle their shipping needs, their developers built a custom shipping solution. In 2011, things got a bit trickier in the Rudy’s BBQ shipping world as they decided to add meats to their online menu. When shipping meats they had to put specific rules in place that would only allow the meat to be in transit for a limited amount of time and to only be delivered to certain areas. With their custom shipping solution, they were able to implement the shipping options they wanted along with the rules they needed, but the build and maintenance was very time consuming and it wasn’t the most accurate way to develop the shipping rates they showed at checkout.

After running a custom shopping cart for 9 years, the Rudy’s team decided it was time to find a solution that would allow them to implement the rules they currently have set up, easily make updates when needed, and help them to accurately pack their products.

Rudy's BBQ

Less Time Shipping, More Time Selling

Prior to ShipperHQ, the addition of a new product or changes in restrictions would call for tons of manual work involving their team to update custom code. Just a simple change could cost the company a lot of time and money.

Creed Ford, owner of Pictoric Media, explains their initial shipping challenges:

Our team would build out rules and it was open source, so we could build any rules that we wanted, but it was extremely hard to support and update. It was a big capital expense and was even expensive to update.

Rudy’s BBQ was introduced to ShipperHQ about a year ago and were happy to hear that they would no longer have to worry about their shipping! They decided to take advantage of the customization service which allowed our team to completely handle the ShipperHQ implementation and made for a quick and smooth transition. And now, the team can easily make changes to their configuration in minutes.

Creed on using ShipperHQ:

The shipping options we use now are very similar to what we had before since we had a custom shipping solution and had it where we wanted it. And, having the ability to create and use Shipping Rules has made ShipperHQ worth it. We no longer have to spend hours or days making changes to our code when we have a requirement change or add an item to the menu.

Improvements Their Team & Customers Can Enjoy

After further use of ShipperHQ, the team found that they are not only saving time with shipping, but they now have better access to the data they need and can produce more accurate shipping quotes.

Efficiency and savings was the number one metric and goal which was hit!

Creed on reaching their goals:

We have the ability to have data come through the systems and not have it go through code which was painful for our team. Having a system intelligent enough to pack product into correct boxes has also helped us to give more accurate shipping quotes.

By utilizing the Dimensional Shipping and Date & Time features they are able to charge their customers the correct amount for shipping. So, their customers aren’t faced with higher than expected charges, and Rudy’s can rest well knowing that their shipping costs are covered every time.

The Future is Looking Bright

Rudy’s is still pretty early on in their transition from their custom shipping solution, but they are looking forward to a bright future with ShipperHQ. Now that the team can more efficiently ship what they sell online, they have even more time to focus on their company goal which is to provide great tasting, homestyle food at reasonable prices. With shipping in order they are able to hold their online store to that same standard, and remain extremely competitive in the BBQ industry. We are excited to see what is instore for Rudy’s within the next year!

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5 Tips to Get More Accurate Shipping

Author: Ashley Overton  |  June 2, 2017

An order comes in, you know what you wanted to charge the customer for delivery, but then you realize what they paid was actually a dollar less than what the shipment will cost! Now what? Majority of the time you end up eating that cost, unless you want to be that guy ringing up your customers notifying them that you need to charge them a little more than they initially expected.

One dollar or ten cents may not seem like a lot when you take in one order, but imagine bringing in thousands of sales. At this point you are losing out on hundreds or thousands of dollars just in shipping. Or, you are spending tons of time sorting out each order and contacting customers. Either way, in the end you are paying the cost.

This scenario only shows two of many reasons behind the importance of calculating and showing accurate rates and options at checkout.

The Importance of Accurate Shipping Rates

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Undercharge and you are left covering the cost Consider the dimensional weight of products and apply surcharges when necessary.
Over charge and risk scaring customers away Apply discounts or pull the negotiated rates you receive from the carrier. Considering dimensional weight can be helpful here as well.
When the checkout isn’t transparent and you leave customers guessing about charges Show time in transit or estimated delivery date and name each option accurately to describe what it is.
Show too few options and lose a chance for upselling Try offering a standard option, expedited option and free shipping if possible. Consider showing estimated delivery to upsell faster options.
Show too many options and risk confusing customers Try rate shopping so that only the lowest, most attractive options are shown.

Control your shipping, don’t let your shipping control you

You should have complete control over the rates you are charging your customers. You made an educated decision on what you charge for the product and the same should happen for your shipping. This way you can make a business decision on whether you want to to charge more or less than what the service provider you use is charging you. If you want more attractive shipping, you may want to undercharge for shipping and build that cost into the price of the products. Or, you may want to overcharge via shipping to cover the cost of packing. Whatever you decide, you should be in control and should not be reacting to what your rates decide to do.

Show the services you actually use

The options you show at checkout should reflect the services you are actually using. This doesn’t mean you need to display the exact carrier and service name to your customers, but you should indicate what the service is or does.

For example, if you are using LTL freight to ship your larger items, you shouldn’t show a small package or ground shipping/standard shipping option in your checkout. Not only will this scenario require you to add a surcharge to cover the cost of the shipment, you could also confuse your customers.

This holds true for other services as well. You don’t want to charge customers for same day delivery when they believe they are paying for a slower service. The customer will think they are being overcharged and many times this can lead to cart abandonment.

The more transparent the checkout the better. You don’t want customers questioning why they are being charged more than they would expect from the service they selected. And it can be quite shocking to find a freight truck in front of your home when you are expecting delivery from a small package carrier.

Use Dimensional Shipping

ShipperHQ Dimensional ExampleWhen you ship a product you are charged for on the billable weight which is the higher
value between dimensional weight and actual weight. Dimensional weight is (length x height x width)/166, but keep in mind that the divisor can change. So if you are delivering something large but light and only calculate the items actual weight, you are undercharging the customer for that shipment.

A great example is Shipper the Bear. He is extremely large (close to 8ft tall when standing) but light in weight for his size; his billable weight would come from his dimensional weight, so you would want to stuff him in the smallest box possible and minimize the width, height and length of the package. You should account for the product’s size and pack densely.

With that said, it is important that you are shipping items in proper boxes. You could save a lot of money by ensuring you are not packing small items in large boxes and leaving tons of extra open space in the box.

Rate from Multiple Warehouses & Dropshipping

Having functionality that supports rating from multiple origins is crucial for those who ship via multiple warehouses and for dropshippers. If you ship from two or more different locations it is important to show the rates for the correct origin, or warehouse, each time. When you only rate from one location, it is very likely that you are overcharging or undercharging customers that receive orders from your other locations.

If you have one warehouse on the East Coast and another on the West Coast but only use the West Coast warehouse for rating, you are overcharging customers on the East Coast that receive their shipments from your east coast warehouse. This is because your checkout believes it is shipping the order across the country, when in reality it could only be shipping across state or city.

Now think larger scale, if you have warehouses in different countries your rates will look incredibly different than how they should. Other options you should consider are whether you want your orders to ship from fewest warehouses or from nearest. Sometimes it is cheaper for sellers to ship multiple items from one or two warehouses rather than collecting one item from each of the closest warehouse that houses each item.

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Know when to Surcharge and Discount

Adding discounts and surcharges is a simple way to account for fees that are not automatically reflected in the rates pulled from your live carriers, handling additional charges that apply to select products, and reflecting negotiated rates.

Many times merchants need to add padding, dry-ice or other material to boxes which adds to the box weight and in turn increases the amount you are charged to ship certain items. This is where you should apply surcharges to the rates you show at checkout, so you are covering all costs for shipments. This can also be useful for international shipments that have duties and fees attached to the delivery cost.

To avoid overcharging customers who do not fall within these categories, you will want to ensure you have rules in place that allow you to only charge surcharges on certain items, when certain boxes are used, or for deliveries that ship to certain locations.

In contrast, you may find that you need to apply discounts to your rates. Discounts can allow you to provide more attractive shipping or reflect negotiated rates from the carrier. This way you are not overcharging for rates and can even build some of the shipping price into the product’s cost.

Make use out of Date & Time

Date & Time is a great tool for merchants who sell perishable goods, products that can only ship in specific boxes,
hazardous materials or products with regional restrictions such as Alcohol. Imagine not only having the ability to show your customers when they can expect their package, but having the power to control the max time in transit for groups of products that have time sensitive shipping requirements.

Date & Time includes time in transit and estimated delivery date which makes it easy for merchants selling perishables to only charge their customers for expedited services when it is necessary. If you have a customer in the area that can get a ground shipment within 2 days and this is within the maximum allowed time in transit,  you can allow them to use the cheaper/slower shipping service.

Or, on the other hand, you can hide the slower, ground option from your customers that reside outside of a specified area; this way you don’t have customers choosing the slower services when they really need the faster and more expensive options.

date-time-calendar-@3xDate & Time also give you the ability to up sell your expedited shipping options and provide transparency to your customers. As we get closer certain holidays you will find that many customers are more likely to shop from sites that show when their order with arrive.

Taking Back Control

Now it is time to pull this all together, develop your shipping strategy and find a solution that fits your business’ unique needs. Whether you are looking to take action on one or all of the above, you should do your research so you fully understand how you want to ship. Consider what options you should or shouldn’t be using based on your customers’ needs along with your own and imagine how you want those carriers to look at checkout.

I would recommend investing in a Shipping Rate Management Software like ShipperHQ when you decide it is time to execute your shipping strategy. This type of software can be tailored to fit the needs of businesses small to large and will help to simplify various shipping barriers. With this solution, you can show the options you want and decide who can see them and when. It is intelligent enough to calculate the most economical box choices based on your product size and boxes you use, and reflects the shipping rules you put into place. Talk to our team to see how you can get more accurate rates and options.

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