6 Real Tips for New Importers Entering eCommerce
Whether you’re a crowd-funding startup, or a first time seller on one of Amazon’s multi-national programs, it is easy to see that ecommerce is changing the way we purchase – and fast.
Rapidly expanding markets with “limitless” opportunities; who wouldn’t want to take the plunge? But beware the dangers that lurk beneath the surface – they often determine if new sellers will sink or swim.
Shapiro’s top 6 tips for new importers navigating the skies and seas of international shipping:
1. Shining a Spotlight on HTS Duty Classification
Don’t let tariffs and duties stop you cold – ask your broker for help! We find that sellers seeking help with product classification begin research too late in the shipping (let alone business) process. Online duty calculators may seem quick and easy, but they won’t always tell you that your product could be subject to a Partner Government Agency (PGA) ruling (think, FDA); or even worse, be subject to anti-dumping or countervailing duties (AD/CVD), which can cause serious fines and penalties if you don’t do your homework.
Even if you find your own classification or your manufacturer supplies it, it’s a bit like trusting your marketing manager with tax code filings. The U.S. Harmonized Tariff Schedule (HTS) is no secret and can easily be accessed online, but it’s the rules governing its interpretation that matter. The HTS weighs over 10 pounds, contains over three thousand pages, and is updated several times throughout the year. It’s always best to find a trusted, licensed Customs Broker to confirm your rate before shipping your goods.
2. Signs that you Need a Customs Broker
Did you know that not every U.S. import shipment needs a Customs Broker, we shockingly confess! Importers are sometimes surprised that Shapiro’s eCommerce team is happy to recommend the use of a courier if it is the most cost-effective option for our clients.
For example, shipments commercially valued at less than $2,500 USD and not regulated by a Partner Government Agency (PGA) such as FDA, FCC, APHIS, etc. can use an informal entry for Customs clearance. With an informal entry, a small parcel courier could handle the transportation and the clearance without you having to worry about duty or other clearance fees. However, if your shipment is over $2,500 or regulated by a PGA, you will need to file a formal entry through a licensed Customs broker.
As ecommerce marketplaces expand, we adamantly discourage attempts to “skirt” CBP import regulations. CBP has taken great notice and interest in these businesses and at the end of 2016 even announced the establishment of the E-commerce and Small Business Branch within the agency to “ensuring the safe and legitimate flow of trade, while at the same time identifying and preventing inferior and unsafe merchandise from entering into the global commerce.”
3. Keeping a Weathered Eye on Your Timeline
Running your ecommerce business can be a delicate balancing act when realizing an international supply chain operation. Multi-cultural operations can result in (often) unavoidable delays that every shipper should understand and plan for when establishing their sourcing plans.
For example, communicating with a supplier across 6 time zones with the added benefit of language barriers, uncontrollable weather delays (yes, even volcanic eruptions), production issues, and even last minute marketplace restrictions are all very real events Shapiro’s team is often explaining – and of course, the list goes on. It’s important to look at your supply chain as a whole and buffer in the necessary additional time and even costs that come with running a successful online seller business.
While we hope you don’t have to experience these unpleasant scenarios, it always helps to have a freight forwarding partner like Shapiro to provide guidance and assist in triaging whenever possible. After all, it’s better to be the prepared ant instead of the hungry grasshopper.
4. Park the Truck, It’s Time for the Delivery!
Whether you are shipping to Amazon, another fulfillment warehouse, or directly to your business location, we can’t stress how important it is to know the delivery guidelines required for the freight destination. Too often, we see customers who have had product turned away because it arrived on the wrong pallet size, was incorrectly labeled, or just didn’t have a delivery appointment. It’s easy to fall into the habit of putting the responsibility on your supplier, but without an established business relationship, and the multitude of marketplaces and delivery requirements, the supplier will only do so much. Early in your planning or booking process, let your forwarder know what the final destination is going to need for a successful delivery.
5. Start with the Right Crew! How to Choose a Freight Forwarder
You will quickly learn that one of the most frustrating parts of importing is the communication between you, your manufacturer, your customs broker, and your freight forwarder. It’s a classic case of ‘too many cooks in the kitchen’ with information potentially getting lost in the shuffle. If you can find a Customs broker that also handles freight forwarding, then you’ve already eliminated one headache!
Sometimes you can get really lucky and find a forwarding/broker with a booking management system or is able to work directly with your manufacturer to coordinate and plan your shipment. This is will save you the headache of language barriers, time zone differences, and tracked communications. It is easy to see that communication is key, especially when YOU have a question or a problem! Talking to a real person over the phone or via email is always preferred to a computer generated response that won’t exactly inspire you feel comfortable when dealing with the trails of shipping.
6. Watch out Ahead! The Dangers of Letting Your Supplier Handling the Shipping
Some suppliers will offer to handle the shipping to the U.S. for you under the guise of removing the hassle of getting a freight forwarder. If that sounds too good to be true, it most likely is!
Besides the fact that you won’t control regarding how your cargo is routed, how fast it gets to you, there may also be hidden fees and profit built in for your supplier that you don’t know about. We often see importers that aren’t able to identify anything about where their cargo is and who is handling it – all while being 100% culpable under the Customs Modernization Act to exercise reasonable care.
We highly encourage understanding the Incoterms, also known as the terms of sale, you are agreeing to with your supplier. Not sure what this mean? Don’t worry, Shapiro has created a handy and downloadable resource to spell out responsibilities for each party under Incoterms 2010.
Not sure where to start?
Shapiro is your one-stop-shop for freight forwarding and Customs brokerage, with partners all around the world to help your shipping process run smoothly. Shapiro has been a leader in international logistics for over a century (about 101 years to be exact), and we are a listed preferred logistics partner for the Fulfillment by Amazon (FBA) program.
-- Nicola Phillips Malaney
Ecomm Business Development Manager
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