Making the Transition from Domestic to International E-Commerce

Think about the amount of work that goes into your domestic e-commerce. You have to know all of the state regulations and how they change state to state, know tax regulations, and know restrictions on merchandise. Now imagine doubling, tripling—on and on—for switching to international e-commerce. Every country will have its own set of regulations and restrictions, so there’s a lot of homework to do before expanding to international e-commerce.

Knowing Taxes, Fees, and Duties

All of those sales taxes that you’re used to knowing based on state-to-state regulations? Every other country will have its own unique sales taxes. In order to fully understand what you’ll be responsible for as a company shipping outside of your tax jurisdiction, consult an attorney who specializes in international tax regulations.

Unless you’re selling exclusively in duty-free countries (if your product is primarily made in the US), any country to which you ship will mean you’re responsible for paying the duty and customs fees associated with importation. These vary from country to country, as well.

Pricing Structure

If you’re distributing outside of the Euro zone, then various foreign currencies are also an issue to consider. There are so many different currencies, from the British Pound Sterling to the Chinese Yuan, and each currency is worth a different amount in American Dollars. But it doesn’t end there. Based on the economy, the amount that those currencies are worth in dollars fluctuates constantly. Keeping an eye on exchange rates is a must to ensure that you’re never overcharging—or undercharging—for your product, with an update coming at least weekly.

Fulfilling Orders

Of course, the major component of international e-commerce is actually getting the item to your international customer. International shipping rates tend to be expensive. The better option is to have a warehouse in or near the country to which you plan on doing a significant amount of shipping. That allows you to drop the product, probably the top sellers, at the warehouse, and fulfill orders from there. Or, if you just intend to ship from the US, you’ll need to provide three documents along with every packing slip: a commercial invoice, Certificate of Origin, and a Bill of Lading. These documents help ensure that your package will reach its intended destination, and that everyone importing and exporting the document will receive payment for their work.

Keep in mind that some countries will have restrictions on what can be sold there—weapons, banned books. . . it can vary wildly. Don’t get yourself in trouble by trying to complete orders for items that aren’t allowed in the country.

There will still be plenty of other elements to consider as you make the move from domestic to international e-commerce, but these are the primary elements and will play a role in the decisions you make.