End to End Shipping – Things to Think About

Shipping
Alex
Alex
Shipping: If you’ve got product ready to sell and it’s all boxed/crated up, next you need to figure out how to ship it from your factory to the customer or market place and sell it.

Photo by Guillaume Bolduc on Unsplash

Shipping bulk quantities of your product to e-commerce providers

The first step is to figure out where the destination address is.  If a customer has already bought the product then this is already decided for you but if you’re moving your product into a marketplace/country to be sold then you will need to decide where it’s going to be stored.

There are plenty of e-commerce platforms out there who once you’re set up will happily allow you to list your products on their website (usually for free) and will then accept orders directly through their website or you can have your own online shop and pass the e-commerce provider the orders you receive for them to send out.  Many of the e-commerce providers also have warehouses (often highly automated with a lot of robots) that can take in your product, store it (for a fee) and they will then pick and ship it when you send them received sales orders (also for a fee). 

The most famous example of an e-commerce platform is of course Amazon but others (all with revenue over $250m USD) that you may not have heard of include:

  • Allegro.pl
  • Americanas.com.br
  • Flipkart.com
  • Hepsiburada.com
  • JD.com
  • Market.yandex.ru
  • Mercadolibre.com.br
  • lx.pl
  • Mercari.com
  • Otto.com
  • Pinduoduo.com
  • Rakuten.com
  • Shopee.com.id
  • Shopping.naver.com
  • Taobao.com
  • Tmall.com
  • Tokopedia.com
  • Wayfair.com
  • Wildberries.ru
  • Wish.com
  • Zalando.com (specializes in fashion)
  • Zappos.com

Once you have set up an account with the e-commerce provider you can request to send stock to them by creating an advanced shipment notification (ASN) on their system and they will then tell you the destination address.

Shipping bulk quantities of your product to your own storage place or to a 3PL e-commerce fulfilment provider

Just because you sell your products on an e-commerce provider’s platform such as Amazon doesn’t mean you have to store your products in their warehouse and that might well be a good thing for you; if sales for a particular product on a particular e-commerce platform are slow the last thing you want to do is send them products that slowly gathers dust.

 

To get around this problem you can sell your products on e-commerce platforms such as the ones listed above but centrally store the products somewhere else.  For example, you could initially store your products at your home or a local lockup and do the posting of parcels yourself – it won’t matter whether the customer orders through your online shop, Amazon, JP, or Wildberries for instance, their order would still ship out of the same location. 

 

Such an approach is great in your very early days but as sales start to grow you’ll find that picking, packing, and shipping is taking too much of your time.  At that point, it’s time to hire someone to do it or you could sign up with an e-commerce fulfillment 3PL company who will store your product in their warehouse and all you need to do is pass on the sales orders you get for them to pick, pack and ship on your behalf.  If you do go with the 3PL company, they operate much the same as the eCommerce platforms do; you log into their site, create an advanced shipping notification (ASN) and they will tell you where the destination address is.

Organising transport to a warehouse or your own storage location (shipments that are domestic or within the EU)

Once you know the departure and destination point, it’s time to organize transport.  If you’re shipping domestically within your own country (or within the EU), the process is quite straight forward; find a trucking company and contact at least three to get comparison quotes. 

 

Any reputable trucking company will want to know the quantity of cartons (sometimes known as cases or boxes), the quantity of pallets (if applicable), the length, width, height, and weight of the cartons, the length, width, height, and weight of the pallets and whether the shipment has temperature-sensitive requirements (for example if it’s food or pharmaceuticals) and whether the shipment is dangerous (for example if it contains certain types of chemicals or involves lithium batteries.  If the shipment is dangerous, they will also need a safety data sheet from you; contact the provider of the chemicals or lithium batteries if you don’t have one.

In the early stages of your company, you’re likely to be shipping less than a full truckload of products (transport companies call this a Less Than Load shipment or LTL for short).  If you’re in a hurry to ship the goods then express services will be available but you’ll pay a premium because yours will be the only shipment on the truck and you’ll pay the same price whether it’s a full truck or not.  If you’re not in a particular hurry and would like to save costs, then groupage services exist.  Larger trucking companies will run regularly scheduled services every day (or maybe only once a week, it depends on the route and level of demand) where a full-sized trailer will travel from one location to another regardless of how much it does (or does not) have on it.  The advantage to these services is that they are cheaper than paying for a full dedicated truck, the disadvantage is that the service is run on a timetable and your shipment may have to wait a few days before departing and may incur more delays en route if it has to swap trailers and wait for a connection; check with your transport company when the pickup date and delivery date are likely to be.

Organizing transport to a warehouse or your own storage location (international shipments, not including those within the EU).

If your shipment is going to cross international borders and also won’t be staying with the EU, the situation becomes more complicated.  You’ll need to ensure the shipment has a commercial invoice with it (if it has a value) or a Pro-forma invoice (if it does not hold any commercial value).  The invoice needs to have some key pieces of information on it for customs purposes – these include:

  • Shipper’s company name and address
  • Recipient’s company name and address
  • Date of the invoice
  • Invoice number
  • The correct HS Code tariff (this can be found on my government websites including https://www.gov.uk/trade-tariff)
  • The INCO term that the shipment is traveling under (this defines who is responsible for the shipment and any taxes at each stage of its voyage; for more information on INCO terms see the next section)
  • A description of each product, country of origin, the quantity of the product, the value per unit, the total value for each product, the total value of the shipment overall
  • A declaration that the information on the invoice is correct (this must be signed by the person filling in the form).

For customs purposes, it’s best if 3 copies of the invoice are attached to the outside of the package/pallet in such a way that they cannot be easily separated (for example by using document pouches).  If you leave the invoices inside a sealed box, it’s possible customs in the arrival country will break open the shipment to look for the paperwork if it wasn’t sent electronically.

INCO terms stand for INternational COmmercial terms of shipping and for the uninitiated can be complicated; it’s easy to be caught out and find yourself liable for unexpected tax bills and shipping costs.  The rules on them changed in 2020; the US Department of Commerce also has an 8-minute video providing a clear explanation on this page (https://www.trade.gov/know-your-incoterms).  Unless you are very comfortable with handling shipping paperwork (which can include certificates of origin, dangerous goods documentation, packing lists, fumigation certificates, and safety data sheets) and dealing with customs authorities it’s a very good idea to use a freight forwarder.   Freight forwarders are able to organize collection from the departure point, transfer to a ship or plane, have it transported to the destination country, and transfer it to the final destination point.  Some freight forwarders will also offer additional services such as customs brokerage to clear customs and handle import fees, labeling, packing, and even provide e-commerce fulfillment services in your destination country.

Don’t miss our other article on parcel packing and shipping.

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