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How Ecommerce Merchants Can Start Shipping Internationally

You may be hesitant to expand your online store's reach and cater to international customers

By Henrik ValstaadPublished 2 years ago 4 min read
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You may be hesitant to expand your online store's reach and cater to international customers. Are high shipping costs and long order wait times worth the potential benefits of reaching new customers? The answer to this question will depend on your goals and your business's nature, but you can rest assured knowing that international shipping is feasible and profitable for hundreds of other businesses. Here are some ways to get started.

1. Explore Your Options

There are many shipping companies that will ship your products internationally. The best choice for you depends on where you'll send your products, how much shipping costs, and when you need your products to arrive. USPS Priority Mail International will be your best choice if you are shipping small or delicate items. Flat-rate boxes from USPS Priority Mail International are often the best way to ship items less than 20 pounds across the Atlantic. Leveraging regional fulfillment centers in your destination locations can be cheaper than shipping your goods to different countries.

2. Calculate your Average Costs

You can calculate shipping costs to ensure that you do not over- or under-price shipping options. While international customers expect to pay more for shipping, this doesn't mean that they are willing to settle with any price. Add your domestic AOV (Average Org Value) to a shipping cost calculator to calculate your average shipping cost. You can run the numbers for every country you intend to sell, and test different areas in that country if necessary.

After you have calculated your average costs, locate the largest and smallest domestic orders and run the numbers again with this range. The averages can help you determine the shipping cost base, and the extremes can highlight potential cost anomalies that could impact your margins.

If your smallest order ever costs $2.35 to ship internationally, and your largest order ever costs $128.30 to ship, but your average order only $13.29 you might consider a pricing structure that can support a wide range of shipping costs (we'll discuss this in #4). If the difference between your lowest order and your highest order is very narrow, a flat-rate may be the best choice.

3. Find out who is paying import fees

Shipping costs are not the only cost. Import taxes and fees will also be added to your shipment. You, the seller have the choice of paying these fees yourself or having them paid by the buyer. These fees are not uncommon for international buyers. However, paying them yourself could increase your conversions. You might consider testing both to determine which option offers the highest return on your investment.

4. Choose your pricing structure

The structure of international shipping prices will likely mirror the domestic shipping pricing structure. This is based on the way you have priced domestic orders. You can price your shipping in one of three ways:

No Shipping Charge: International shipments are generally more expensive than domestic. This is why it is often a bad idea to offer free shipping. You might be able offer free shipping if you are selling small, lightweight items (such as jewelry) to encourage sales.

Flat rate: If your international shipping rates are fairly consistent (most packages are the same size/weight and prices vary between countries relatively little), flat rate can be a cost-effective option for you and your customer. Flat rate international shipping ensures that you know exactly how much you will charge and that your customer knows what to expect. This helps to reduce abandoned carts due to unexpected costs at checkout.

Calculated rate: If you have products that are different in size or weight, it might be a good idea for your customers to calculate their shipping rates when they checkout. Set up live shipping rates to allow your customers to calculate their shipping costs as they shop. This will make customer service a win.

5. Never stop testing

Testing is key to international shipping success, as with everything ecommerce. You should test your rates and determine if they are not working. Also, be aware of macro events such as COVID that could impact your strategy. This will help you to plan. You can increase your conversion rate by testing promotions and price changes.

Last Thoughts

When selling internationally, you must consider the fulfillment costs and benefits. It is important to price your shipping costs accurately in order to maximize sales and minimize returns, abandoned carts, or your own costs. The end result is worth it. Increased revenue and the opportunity to make customers happy around the globe.

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