Photo by Nathan Lemon on Unsplash
So you’re ready to start shipping your product, fantastic! Here’s a few tips to consider to make sure your customer gets their order delivered in perfect condition.
Packing the product
Make sure the parcel you’re sending your product in is going to be able to survive the postal system; the average parcel will have 50 touch points between leaving you and arriving at the customer. It’s a great idea to use new, double-walled boxes for strength as it may have many other boxes stacked on top of it but make sure too to pick an appropriately sized box; overpacked boxes run the risk of splitting open. Filling in any gaps inside the box with bubble wrap or styrofoam will help your product survive any shocks from accidental drops – a great idea is to drop a completed parcel from shoulder height to test whether the product inside gets damaged. If you want to recycle packing boxes that’s OK but be sure to remove any old labels or addresses (especially any barcodes) as these may well confuse the delivery company if they are scanned by mistake.
Labelling the parcel
It’s important to make sure the shipping label is affixed properly on the parcel; avoid putting it across any seams in case the parcel is opened for security or customs checks and make sure to have enough ink and labels in stock at all times (if you will be printing a lot of labels it may make sense to invest in a thermal label printer). Labels can take a surprising amount of time to produce manually so once orders start to build in volume consider setting yourself up with a shipstation account (it’s a software solution that can integrate between an order management system – like shopify – and print out the labels automatically for you thus saving time)..
Invoices
Whilst no paperwork is required for internal shipments within the EU (beyond perhaps a courtesy order form and invoice inside the box for the customer), for other international shipments paperwork is definitely needed. Using a reputable shipment company such as UPS, DHL or FedEx makes it easier because as you go through the process online of booking the parcel for collection their systems automatically identify what paperwork is needed and provide online forms for you to fill; the data is then sent automatically to them so you don’t have to worry.
If you’re using an alternative courier, make sure you have 3 copies of the invoice attached to the outside of the box (one of the courier, one for departure country customs, one for arrival country customs). If you’ve already sold the product then it’ll be an invoice, if they’re yet to pay (for example if they’re on credit) it’ll be a pro-forma invoice. The commercial invoice needs to have a unique invoice number and provide information on the seller (you) and the buyer of the goods (your customer, but not necessarily the person that you are shipping to). It’s a good habit to provide a commodity code for the contents on the invoice and the country of origin, to allow customs to easily and correctly identify the contents and to also provide your VAT registration number and or company number.
Whichever approach you use, the value of the goods on the invoice should be the price you are selling them at to your customer, not the price you paid to make or buy. Don’t understate the value nor state that it’s a gift; both are methods used to avoid paying some or all of the resulting import taxes and are viewed as fraudulent behaviour by government authorities. Even if you have a customer purchasing your product and asking you to send it to someone else as a gift, it still should not be declared as a gift by you because you are selling the product to your customer who is gifting it on to the recipient you’re shipping to.
Certificate of origin
A certificate of origin is a document that verifies a product’s country of origin and states where the product was produced, manufactured or processed – not where you’re shipping it from. It’s required by some destination country’s customs authority as part of their clearance process when importing and you need to provide one with every shipment. The good news is that many countries allow you to request a certificate of origin online and if you have one, a global forwarder can request one on your behalf.
Biosecurity paperwork
If your product is organic (for example it’s food, has fur or uses wood or bamboo and so on), some countries have biosecurity regulations, particularly Australia and New Zealand which treat this topic very seriously. Again, the major couriers make it clear when you book with them but you may need to also provide a certificate of fumigation
Understand import taxes
Incoterms are a whole topic of their own once you get to moving pallets around, but for parcels, it comes down to whether you are going to ship it DDU or DDP.
DDU means Delivery Duty Unpaid. A courier will collect your parcel, ship it to the destination country and pay the resulting import fees but they will then hold the parcel and contact your customer to ask them to pay the courier for the import fees before they will deliver it. The customer needs to be pretty fast; most parcels are not held for more than a few days before they will get returned back to you. If you want to make the customer liable for import fees (which is a common approach for many small sellers), make it clear to them when they buy your product that they’ll have to pay any import fees.
DDP is the opposite of the above, it means Delivery Duty Paid. In this scenario the courier will collect your parcel, ship it to the destination country, pay the resulting import fees but they will then either hold the parcel and contact you to pay them for the import fees or if you have an account with the courier they will deliver it and charge the import fees to your account. Again, you do not have many days to pay the courier the import fees. Taking this approach creates much less hassle for your customer but leaves you exposed to import taxes which can be very complex. Don’t take this approach unless you have a clear understanding of all taxes and fees you’d have to pay. As an example, VAT in France for most products is 20% but food, books and works of art are 5.5% and medicines are 2.1% while in Germany VAT is 19% for most products but some food, some timber and books are 7%.
Make sure to make a note of the order number you’re shipping and it’s tracking number
Your courier will provide a tracking number (usually when you print out the label) and it’s a very good habit to track that against the relevant order. Parcels unfortunately do get lost, delayed, or damaged, and if a customer calls up with a query or complaint against their parcel you want to be able to identify that parcel and look up the information on the courier’s website. If the courier permanently loses your parcel, you’ll also need their tracking number to make a claim against the courier to be compensated.
Prepare for Christmas well in advance
For many small businesses, Christmas can be a very busy time. If you expect to ship a lot of parcels during that time, make sure you have sufficient packaging material ordered (and delivered) well in advance of your expected peak. If you’re importing products for sale from Asia, you will need to have it on a boat sailing to you by early October at the latest. Amazon’s cut off for accepting product is usually around December 4th but it’s a good idea to try to have your product arriving at Amazon a week or two before this date. Check also the final cut-off dates for guaranteed shipping with your couriers and if you have a website update it with this information – it’s a good idea to back this up by also sending your customers an email with this information.
Don’t miss our other article on shipping.
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