Author Archives: Jennifer Dunn

The Beginner’s Guide to Cross Border Shipping

Author: Jennifer Dunn  |  December 12, 2018
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As an online merchant, shipping products outside your home country and region can be a little terrifying. What’s up with customs? Why is shipping across a border so expensive? Where did these zillions of shipping carriers come from?

It can be tempting to stick to shipping to customers within your own borders and call it a day. But if you’re not shipping cross-border, you’re likely missing out.

Not long ago, we went over a whole slew of reasons why you should be shipping internationally. This includes all the usual suspects like “the market is out there,” and “your competitors are doing it,” but we think the whole list is worth a read.

And now if you’re sold on shipping cross border, but have no idea where to start, we’re here to help.

Choosing Your Products and Market

Much of your cross-border shipping experience is going to depend on where you are shipping and what products you are sending to customers. It’s a good idea to test your international shipping strategy by dipping a toe in the water before diving in.

Choose your market
Chances are you already know where your products are in-demand. Online shoppers are not always shy about attempting to have an order shipped internationally or writing into support to ask you to support their country.

Take a look at your store’s analytics. Do you get a lot of traffic from a certain country? Is your support team constantly fielding queries asking why you don’t ship to Region X? Then start there, where you know your products are already in demand.

Offerings like ShipperHQ can provide you with detailed analytics on the conversions you are not making internationally, which can give you some insights into the size of the opportunity.

Alternatively, you can choose to test the waters with a close market with long established cross-border shipping routes. In the U.S., that could mean Canada or Mexico. In the UK, that might mean the EU/Continental Europe.

Choose your products
Once you’ve chosen your market, your next step is to pick the products you want to ship internationally. We recommend starting with small, light and durable items. These types of items are less likely to run into snafus when making stops in the international shipping process.

But before you pack up a shipment of lithium ion batteries wrapped in U.S. postage stamps and send them on their way, there are a few things you need to know.

  • Country or Territory Regulations – International shipping between countries is highly regulated, and for all kinds of reasons.  Before you lovingly plaster a label on your first international shipment, read up on the rule. UPS has a handy resource where you can look up shipping regulations and restrictions based on point of origin and shipping destination. Some countries may require that you obtain a license or other special provision before importing goods. For example, you need extra permits to ship meat to Mexico, so they probably aren’t the ideal market to test out your new Steak o’ the Month subscription box.
  • Restricted items – Like the aforementioned lithium ion batteries, some items are universally restricted and/or require a lot of extra hoop jumping to ship internationally. This is because they can be dangerous, like high-powered magnets on an airplane, or illegal, like ivory. ( …Or because they’re postage stamps. UPS will not ship U.S. postage stamps outside the U.S.) But never fear, some restrictions are carrier-specific. So if one carrier won’t ship your product, another may answer the call. Don’t give up!
  • Keep it Simple – Cross-border shipping is more involved than domestic shipping, we suggest you start with high profit margin items that you can afford to lose if your first experiment doesn’t work out. In other words, consider testing the international shipping waters by sending books, not hot tubs.

Once you’ve chosen your products and market, don’t be surprised when things change up on you. Tariffs and treaties and other changes may suddenly mean that a new market opens up, or something that you happily shipped to your customers in Country X yesterday is suddenly prohibited today.

It can be extremely difficult to keep an eye on changes, especially with the current tariff unease worldwide. It’s essential that merchants use software to help them keep an eye on changes, not only  to the cost of shipping, but changes in what can and can’t be shipped.

Nail Down Shipping Logistics

Choose your carrier(s) – You have a ton of options when it comes to shipping items cross-border. Postal mail, like the United States Postal Service (USPS) or Canada Post is cost-effective, but often excruciatingly slow. Express carriers cost more, but can be much faster and offer perks like insurance and tracking that will give you and your customers peace of mind that the purchase is on it’s way.

Understand customs and duties – Think of customs and duties as taxes or tariffs on the items you import. Depending on things like what the product is, what it’s made of, it’s value and quantity, where you’re shipping from and the origin point of your products, you (or your customer) are likely going to have to pay extra as a cost of doing business for importing goods into a country.

You have a couple of options here:

  • Delivery Duty Paid (DDP) – This means you, the merchant, pay all the taxes and fees associated with shipping internationally. You are generally billed by your carrier for these fees. In some cases you may not know the fees until after the order is delivered.
  • Delivery Duty Unpaid (DDU) – This means that the customer is on the hook to pay all taxes and fees associated on the package. If you choose this route, be sure to let the customer know up front that they will be responsible for duties, otherwise you could end up with an angry customer.

The other option is to use a 3rd party custom and duties calculator to do all the work for you, and then choose to either pass all, some or none of that cost onto the customer.

Optimize Your Customers’ Experience

Offer varied delivery options – Some of your customers will want their purchase immediately. Others may be more price-conscious and defect to a competitor if the total price climbs too high. One way you can please everybody is by offering up choices. The price-conscious customers can save some money with slower shipping options, while the people who forgot their mom’s birthday can shell out extra for express shipping.

These days, many online shoppers have come to expect free shipping, even on international orders. Check out our guide to offering free shipping without busting your budget here.

Be transparent about shipping costs – The last thing you want to do is surprise your customers with an enormous grand total when they’re about to hit “Buy Now.”  Or worse, shipping something around the world only for the customer to refuse to accept the shipment because of the high duties.

Shipping management software can help you give customers the whole shipping price story up front so you don’t end up with a bunch of products sitting in abandoned carts.  

Are you ready to ship internationally? Do you have any international shipping questions? Tips & tricks? Horror stories?

Let us know in the comments!

 

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5 Reasons You Should Offer International Shipping

Author: Jennifer Dunn  |  December 7, 2018
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When it comes to the problems with international shipping, we’ve heard it all – it’s expensive, international customers are demanding, our products are restricted, we can’t figure out customs.

Simply put, those are not good enough reasons to avoid shipping your products cross-border. Here’s why:

Your customers are out there

You have the supply, but is there demand? Survey says: Yes.

The Pitney Bowes 2017 Global eCommerce Study found that 70% of online shoppers shop internationally. And DHL found that every 7th online purchase is now a cross-border transaction.

Demand is only growing. Forrester reports that cross-border shipping will make up 20% of eCommerce by 2022, with sales equaling $627 billion. This is in part because eCommerce giants like Rakuten in Asia, Flipkart in India, and Amazon all over the place are rapidly introducing new populations and markets to online shopping. Familiarity with eCommerce, along with streamlined payments processes, mean more and more consumers all over the world feel comfortable shopping online.

If you’re curious about expanding into a new international market, you can first head over to Export.gov and see a frequently-updated overview of economic conditions in the country or region where you’re planning to sell.

Your competitors are doing it

DHL surveyed 1,800 retailers and 71% of those expected their cross-border sales share to increase.

Pitney Bowes also found that a third of the 1,200 online retailers surveyed considered international selling their top growth lever. In the same report, 93% percent of online merchants either already offered cross-border shipping or planned to by 2019.

For U.S. merchants, going international only makes sense because the U.S. share of global eCommerce sales is steadily decreasing as new markets emerge.

You have the data

The key to your first cross-border market may be hiding out in your website’s analytics right now.

According to the same DHL report, a large-scale analysis run in cooperation with SimilarWeb of the top 1,000 shopping websites in each European country showed that more than 1 in 4 of them had significant international traffic, even in smaller, less-connected markets such as Ireland or Croatia.

Fashion and electronics were the top cross-border sellers, but up-and-coming product categories included beauty and cosmetics, pet care, food and beverage, and sporting goods. Tools like ShipperHQ can provide analytics showing you where your customers and potential customers are located.

It’s getting cheaper and easier

When we talk to eCommerce merchants about international shipping two major concerns crop up over and over again: the cost and the hassle.

When in the U.S. you may be accustomed to shipping a parcel from Massachusetts to California for a few bucks, international shipping costs can appear staggering. And that’s without the addition of customs and duties. Further, unless you’ve nailed down relationships with carriers and set up shipping methods, your items can slip into a sort of a transit black box, with neither you nor your customer knowing exactly where the parcel is nor when it will arrive. Further, online shoppers now demand that their packages arrive quickly after they click “Buy Now.”

Fortunately, as cross-border commerce becomes more common, carriers are meeting the needs of both eCommerce sellers and customers. For example, premium or express shipping solves both the problem of parcel tracking and delivering the order to the customer within the expected time frame after the purchase.

Or, to let numbers do the talking, DHL’s survey found that online retailers offering premium cross-border shipping were growing 1.6 times faster than those who did not.

…And more profitable

According to Statista, the average order value of an international sale is $147 USD, which is 17% higher than an average domestic sale.  Further, DHL’s survey found that around 20% of cross-border purchases were worth over $200 USD. Perhaps savviness around shipping charges has your international customers demanding more bang from their buck (or Euro or yen) in each transaction.

Are you exploring cross-border shipping? ShipperHQ has over 10 years experience with thousands of merchants large and small in the international space.

Contact us to discuss your needs, or to start a 30-day free ShipperHQ trial today.

 

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6 Clever Ways to Offer Free Shipping to Customers

Author: Jennifer Dunn  |  December 4, 2018
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More and more, online buyers have come to expect perks like free shipping. And many will shop around if your store doesn’t offer it. In fact, a PayPal study found that 43% of shoppers abandon carts because they feel shipping charges are too high.

On the other hand, offering free shipping can eat into your already slim retail profit margins.

Thankfully, there are clever ways to configuring your eCommerce shipping strategy to alleviate the cost of free shipping. You can get all the benefits – and the competitive advantage – of offering free shipping to your customers, without jackhammering your profits.

Here’s how:

1. Limit Free Shipping to Certain Locations

Limit your free shipping by geography. Shipping to Alaska, Hawaii and across borders for example, is generally more costly than shipping to the contiguous 48 states, so you may want to save your free shipping offer for the people in your country or region.

How to limit free shipping to a certain zone: You can easily set a Carrier Rule in ShipperHQ to limit free shipping.

Read our guide on “How to Set Free Shipping for a Specific Zone” here.

2. Set Promotional Thresholds

As shoppers, we’ve all run into online stores offering “Free shipping on purchases over $50.” Why not be that store? The threshold persuades shoppers who may have visited your store for one thing to add extra items to their carts, and ensures you make enough profit on the sale to cover the cost of free shipping.

How set promotional shipping thresholds: In ShipperHQ, you can set promotional thresholds in just a couple minutes by adding a new Filter and Carrier Rule.

Find out how either by checking out our step-by-step guide on “How to Offer Free UPS Ground Shipping on Orders Over $X” or by watching this quick walkthrough.

3. Limit Free Shipping to Certain Products

Offering free shipping on a refrigerator is likely going to cut into your margin on said refrigerator, and on other sales besides. Be sure to limit free shipping to lightweight products.

How to limit free shipping to certain products: Login to ShipperHQ and create a “Shipping Group.” From here, you can exclude any product(s) you want from any free shipping promotions your store offers.

Read all about “How to Exclude Certain Products from Free Shipping on Orders Over $X” here.

4. Offer Free Shipping to Certain Customer Groups

They say you’re not supposed to pick favorites. But honestly, segmenting customers can be a great way to reward frequent buyers, long-time customers, big spenders, customers in a certain geographic location, or any other customer group to whom you’d like to offer free shipping.

How to offer free shipping by customer group: Most eCommerce platforms allow you to segment customers into Customer Groups.  Once you’ve segmented your customers in the backend of your preferred platform, you can then set up a Carrier Rule in ShipperHQ.

Find our step-by-step guide on “How to Set Free Shipping for a Specific Customer Group” here.

5. Delay Free Shipping and Incentivize Faster Shipping

Chances are your customer wants their order yesterday. One strategy to keep shipping costs from getting out of hand is to offer free shipping on slow and low cost methods like economy and ground (and even delay the dispatch on these goods), but charge as usual or even add a surcharge for two-day or next day shipping.

Why a surcharge? Keep in mind that many customers need their item as quickly as possible, and adding a surcharge to faster shipping will help defray the cost of offering free shipping to customers who don’t mind receiving their items at a snail’s pace.

How to add a surcharge to certain shipping methods: ShipperHQ allows you to easily set surcharges on certain shipping methods.

Find out how in our “Use a Carrier Rule to Mark Up a Specific Shipping Method” guide.

6. Pay Attention to Dimensional Shipping

Size matters. The size of the box you ship your product in, that is. To save money on dimensional shipping, instruct your pickers and packers to use the smallest box or packaging unit available for the order. And try to pack multi-item orders into one package whenever possible. You’ll automatically save on shipping when you use the smallest size boxes and the least amount of cartons.

How to maximize savings with dimensional shipping: ShipperHQ’s Dimensional Shipping Advanced Feature can guide your pickers and packers to the right box for every shipment, a feature that most eCommerce carts built-in shipping lacks. Turn on Dimensional Shipping in your ShipperHQ account to achieve more accurate shipping rates especially when getting rates from carriers like UPS and FedEx or when using USPS Flat Rate boxes.

Read our “Setup Dimensional Shipping/Box Packing” guide to find out more.

Are free shipping costs battering your margins?

Try a 30-day free trial of ShipperHQ and let us get you back in the black.

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2018 Holiday Shipping Cutoff Dates

Author: Jennifer Dunn  |  November 29, 2018
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For online retailers, ’tis the season of good cheer and record profits, but also of stressed out gift-calendargivers who want to make doubly sure their packages arrive by December 24th.

To help you plan your holiday shipping strategy, we’ve compiled this list of holiday shipping cut off dates to ensure that Santa’s gifts don’t accidentally show up on December 27th.

Please note: This blog post should be used as a guideline. Shipping cutoff dates and transit may vary depending on factors like origin, destination and product mix. These dates apply to U.S. to U.S. shipments only. Delays may apply to shipments to Alaska or Hawaii.

UPS

UPS recommends shipping by these dates for your shipment to arrive by December 24th.

Service Shipping Cutoff Date
UPS Ground Monday, December 17- December 21 (depending on shipping zone)
UPS 2nd Day Air Thursday, December 20
UPS Next Day Air Friday, December 21

You can download the full UPS holiday shipping schedule here.

USPS

The USPS recommends shipping by these dates for your shipment to arrive by December 24th.

Service Shipping Cutoff Date
USPS Retail Ground Friday, December 14
USPS Priority Mail Service Thursday, December 20
USPS First-Class Mail Service Thursday, December 20
USPS Priority Mail Express Service Saturday, December 22

For shipments to Alaska and Hawaii, the USPS recommends shipping by December 20th when shipping First-Class Mail Service or Priority Mail Service, and shipping by December 22 when shipping by Priority Mail Service. You can read more about the USPS holiday shipping cutoff dates here.

FedEx

FedEx recommends shipping by these dates for your shipment to arrive by December 24th.

Service Shipping Cutoff Date
FedEx SmartPost Monday, December 10
FedEx Home Delivery Monday, December 17
FedEx Ground Monday, December 17
FedEx Express Saver Wednesday, December 19
FedEx 2Day and FedEx 2Day A.M. Thursday, December 20
FedEx Standard Overnight, FedEx Priority Overnight and FedEx First Overnight Friday, December 21

You can find the full list of FedEx shipping cutoff dates here.

Frequently Asked Questions about 2018 Shipping Cutoff Dates

Will UPS, the USPS or FedEx deliver packages on Christmas Day 2018?

UPS Express Critical Service is available on December 25th. FedEx SameDay City Direct, FedEx SameDay City Priority and FedEx SameDay are available on December 25th. The USPS will deliver Priority Mail Express on Christmas Day.

What are the 2018 holiday cutoff dates when shipping internationally?

This depends on factors like carrier availability and the country or region to where you are shipping.

What are the 2018 holiday cutoff dates to ship to someone in the military/an APO address?

Dates vary, but the latest cutoff date listed by the USPS is December 18. See the USPS page on military shipments for a full list of 2018 holiday shipping cutoff dates to APO, FPO and DPO addresses.

Need shipping help?

ShipperHQ calculates dispatch and delivery dates right in checkout, so your customers will always know which shipping option to choose to ensure their delivery arrives on time. This cuts down on abandoned carts and anxious customer service requests from shoppers who want to create the right holiday memory. Try a 30-day no-risk free trial of ShipperHQ today.

We wish you good luck and swift shipping speeds this holiday season. Do you have any other questions about the 2018 holiday shipping cutoff dates? Let us know in the comments.

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Sales Tax on Shipping Charges, Demystified

Author: Jennifer Dunn  |  July 2, 2018
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As an online seller, when you think of “shipping issues,” your first thought probably has something to do with finding the lowest rate or fastest route from your warehouse to your
customer. But another shipping issue many sellers don’t consider is whether or not the shipping fees you charge your customers are taxable.

This post will explain when shipping is taxable, when it isn’t, and how to handle shipping taxability in your online business.

Shipping Taxability 101

As an online seller, you’re likely already aware that, in the US, you are required to collect sales tax from buyers in states where you have sales tax nexus. And, as an online seller, chances are you ship all, or at least most, of your products to your customers. But did you know that many states consider shipping charges to be taxable, too?

Depending on a state’s sales tax laws, the price you charge to actually ship a product to your customer may be subject to sales tax, just like the price of the item. Here’s a list of states where shipping is taxable.

In practical application, this means that if you are required to collect sales tax on a product, you are often required to collect sales tax on shipping charges, too. Let’s look at some examples.

Example transaction where shipping is taxable:

Jane sells a $100 lamp and charges $10 in shipping fees to a buyer in a state where shipping is taxable.  The sales tax rate is 5%. In this case, Jane is required to charge the 5% sales tax rate on $110 (the price of the lamp plus the shipping fee.) She’d charge a total of $115.50 to her buyer.

Example transaction where shipping is not taxable:

In this case, Jane sells the same $100 lamp and charges $10 in shipping fees to a buyer in a state where shipping is NOT taxable. The sales tax rate is, again, 5%. In this case, Jane is only required to charge the 5% sales tax rate on the $100 price of the lamp, but not on the $10 shipping fee. So, to this buyer, she would charge only $115.00.

Seems simple enough, right? Well, there are a few caveats we should warn you about.

Exceptions to the Shipping Taxability Rules

State laws were written before eCommerce – You can read what each state’s tax laws say about sales tax on shipping charges here. But you might notice that some of these laws don’t seem to make a lot of sense from the point of view of an eCommerce seller. That’s because many state sales tax laws were written before eCommerce became as prevalent as it is today. Fortunately, most states have re-interpreted their laws to apply to online sales, and you can generally find guidance either by visiting a state’s website or by giving your state’s taxing authority a call.

You are delivering products in your own vehicle – Most of the state sales tax laws referred to above are specific to sellers who use a “common carrier” to deliver products. A common carrier is a service like FedEx, UPS or the USPS which anybody can use to ship products. Many states have different laws for sellers who deliver products in their own trucks or other delivery vehicles, so double check with your state’s taxing authority if this sounds like your situation.

Where shipping is not taxable, delivery charges must be separately stated – Another important thing to note is that most states who do not require sellers to charge sales tax on shipping fees require that those fees be separately stated on the invoice. To curtail any problems with taxing authorities, just be sure that you always state the cost of shipping separately from the price of the item.

Sometimes shipping and handling is taxable – In at least two states, Virginia and Maryland, shipping is not taxable, but handling is.  And if those two charges are combined into one “shipping & handling” charge, then the entire charge is taxable. Confusing, right?

Be careful how you treat mixed taxability shipments – In some states, items like clothing, groceries and medicine are not taxable. And in general, if an item is not taxable, then the shipping charge to ship that item is not taxable either. However, you may run into a situation where a buyer has bought a mix of taxable and non-taxable items from you. In most cases, you can simply either weigh or value the items, and only charge sales tax on the shipping charges for the taxable items. But you always want to double check with the state, because sometimes their laws on how to tax mixed taxability shipments differ.

I hope this blog post has helped you determine when (and when not) to collect sales tax on shipping charges. For a whole lot more about sales tax, check out our Sales Tax 101 for Online Sellers guide.

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

Jennifer Dunn is the Chief of Content at TaxJar, the leading sales tax compliance software for online sellers. Try a 30-day free trial of TaxJar and put a lid on sales tax!

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