What considerations do business owners need to consider in international trade?

By: Oron Ben Nun

The decision of whether to send goods between countries can be a surprisingly complex process. There are many factors that traders need to consider. This article discusses what traders need to take into account when contemplating international shipping.

Managing the shipping process can be a tremendous headache for traders. Balancing costs so that it remains profitable for customers while also being economically beneficial for your business can be a challenging task.

Business owners often find themselves questioning whether they want to carry out international shipments. As a business owner, you want to process and fulfill as many orders as possible, but logistically and economically, it may not be viable for your company.

To help you decide whether it is worthwhile to ship goods and expose yourself to the international trade scene, or not, and what information you need if you intend to carry out international shipping, we have compiled a list of considerations that business owners need to know about international shipping.

What is Your Product?

If you have a compact, easily packaged, and stable product, international shipping may be straightforward. However, most products are not so simple. The simple fact is that your product may not be suitable for international shipping due to various reasons such as financial costs, size, perishability, and more, making international shipping impractical.

Is There Demand?

Opening your shipment to a larger audience with several countries might seem like an excellent idea. The idea of a new market, additional sales, and the potential for business growth can be enticing. But before you jump on board, do you really know if your product is in demand?

This is where it’s time to do some market research. Firstly, check if you have received inquiries from international customers about your products and see where they are coming from. If there is a significant quantity, you may have a market for your product, and you can continue to explore this market.

Don’t Try to Conquer the World

International shipping is more complicated than wrapping a package and sending it by mail. Each country is different and has its own regulations inclined to governmental and business interests. For example, importing bananas to Israel is prohibited since Israel is considered one of the largest banana exporters in the world.

This is just one example of various business or security scenarios that may be obstacles for importing goods into different countries. It is recommended to focus initially on a few countries where you have researched and believe there is interest in your products. Gradually, you can expand your business reach to other countries instead of jumping into everything at once.

Deal with International Laws and Regulations

Every country has different rules regarding what can be imported and exported, as well as regulations and restrictions on how and which products can be shipped. These potential restrictions and rules may significantly impact whether you can ship your product to certain countries, the price at which they are shipped, and the various challenges you might need to overcome just to get the products you ordered for your customers.

Taxes and customs duties will also vary between countries and products and can add a significant amount to your shipping bill and introduce factors you need to consider.

How Will You Ship?

Choosing the way you will ship your products, as well as who will do it, is also a critical aspect of international shipping. There are several different routes and paths you can choose from, each offering different advantages and disadvantages.

Larger companies typically use third-party logistics. They often deal with specific regions and are excellent for high volumes of shipments. They are also flexible in terms of pricing and can build relationships with you to help you understand some of the hassles of shipping.

However, most smaller businesses may choose to integrate with services like UPS, FedEx, DHL, etc. This route is cost-effective for small business owners as you get the confidence and experience of working with these larger companies, allowing you to learn more and feel more secure. However, bargaining on price may be difficult since many of these large shipping companies have set rates and may offer only so much in terms of reductions and discounts. Nevertheless, explore and you may be surprised by the different rates each one gives you.

International shipping can be the right step for your business or your e-commerce store, opening it up to a new market and increasing your sales. However, don’t just skim the surface. Instead, research and analyze so that you don’t lose instead of gain.

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