How to Handle International Shipment Customs and Duties
International eCommerce often involves custom and duty calculations. It is necessary to comply with government regulations and legal requirements for shipping. You also have to keep in mind the potential restrictions due to health hazards, environmental rules, or even security purposes. Naturally, configuring your international eCommerce business to handle customs and duties results in high overhead.
Therefore, it can be quite daunting for eCommerce businesses to venture into international shipping for the first time.
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How Third Parties Can Help
While handling customs and duties can be daunting, fortunately, there are many third-party capabilities available. These include SaaS-based APIs, as well as off-the-shelf software. You can integrate them into your international eCommerce platform.
We always recommend our clients to think everything through when evaluating an international eCommerce platform. They should determine all the locations they are planning to target or might want to expand into over the years. It can be beneficial to think beyond the short-term.
To do that, you must brainstorm and determine how you see your business evolving in terms of capabilities, functionality, and requirements. Closely monitoring your competitors, what they are offering, and how they are handling their business can help you with that.
Essentially, you need to create a roadmap detailing all your customs and duties needs. For instance, some of our clients deal with things like chemicals or flammable/combustible items. These kinds of products have particular requirements for international shipping, depending on the country, region, or shipping carrier.
Shipping carriers almost always have some regulations that your shipment must meet to ensure it can pass through customs and duties. Therefore, it is essential to file all the necessary information, place the required labels, as well as record the information for later. After all, you would not want to have so much revenue going through a country only not to have the necessary data when an issue occurs.
It can be beneficial to think forward and follow the best practices. Consulting experts and legal counsel within each region can ensure that. Since these people know the region’s specific requirements, the best and have experience dealing with them. They will ensure your shipments adhere to the regulations and make it easier to track, document, and file all the necessary information.
Leveraging Third-Party Software
Once you have a roadmap in place, it is time to come up with a way to deal with all the requirements of customs and duties. The next step is finding an optimal solution for the software.
An easy and effective solution is leveraging a third-party service. There are many great plugins that you can incorporate into existing international eCommerce platforms. Since customs and duties are continually changing, it can be very beneficial to have an automated turnkey solution that is continuously getting reviewed and updated by a development team dedicated to customs and duties.
One of the most significant advantages of this is that since a third party is focusing on customs and duties, and giving you automated updates, it results in a lower overhead overall. All the customs and duties forms get completed automatically and integrated into your business’s pick and pack or shipping process. It automates the documentation and record-keeping requirements as well.
However, there are some downsides to this too. One being that depending on the solution, there will be a fee for all the transactions. So, there will be an incremental cost per shipment, and it needs to be incorporated into the pricing model.
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Building The User interface
It is also crucial to determine how you will present information regarding the additional costs to the end-user and if there is any information required from them.
Naturally, if an item needs to be shipped from a different region to a particular country, the cost will be impacted by customs and duties. On the other hand, if there is a local manufacturing facility or a distribution center, these charges will not apply. So, you may want to offer your users the opportunity to wait until the item becomes available in the local inventory. Or, if it is already there, your international eCommerce platform should have a preference towards it as it would not incur any custom and duty charges. So, you need to carefully design the user interface, keeping the customs and duties of international shipments in mind.
Utilizing a Static Library
You can also utilize a static library to generate customs and duties forms and labels, as well as record all the information. There are many great DLL libraries that you can integrate into your international eCommerce platform. While you can update these libraries periodically, they are not like an API service. Their functionality is embedded within the application.
Again, similar to SaaS-based offerings, this turnkey solution provides customs and duties capabilities without a huge overhead. The advantage of this over SaaS-based solutions is that there is generally no additional fee per transaction. However, both the library and the software require manual updating. So, the overall software cost is incremental depending on when there are updates available.
Clarity International eCommerce Experts
Customs and duties capabilities are an extension of an existing robust international eCommerce system. It is one of the most detailed and complex requirements that require proper configuration, implementation, as well as record keeping.
It can be a daunting task to attempt to do it manually or build from scratch. Therefore, we strongly recommend businesses that are starting out, to leverage a SaaS-based service or a static library. These can be easily integrated into your international eCommerce platform. We, at Clarity, follow the same practice.
If you have any more questions, you can find more information about international eCommerce in the resources provided below. You may also get in touch with our knowledgeable and friendly experts for a complimentary analysis. We certainly look forward to answering your question and talking with you about your upcoming international eCommerce project.
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