A Seller’s Journey: How to Begin Selling Product Internationally

For some companies, operating globally is a real challenge, and a chance they don’t want to take. Less than 1% of the United States’ 30 million businesses export. But thanks to the internet, fast shipping and global product demand, it’s actually easier today for companies to expand internationally, and the chances for success are higher. A study found that American companies that export their products are 8.5% less likely to fail.

Like with any new business venture, though, you need a plan of action, and it helps even more to have tips from those who have already been successful in a similar business venture. From a seller’s point of view, here are four things you need to know to start selling a product internationally.

1. Understand International Laws

Each country has both legal and industry requirements regarding consumer product sales. It’s your responsibility as a seller to understand the local consumer and customs laws and make sure you comply to every foreign government regulation. Be sure to do your research and find out the laws you need to abide by, i.e. taxes, customs, labels, environmental safety and product compliance.

One good piece of news is that the U.S. has free-trade agreements with 20 countries. Using these agreements could mean more recording and filing on your part, but the extra time and effort will produce monetary savings that make it worth it.

It can be challenging to learn all you need to about the international trade laws for the country you want to operate in if you go at it alone. That’s why Dustin Tate, executive vice president of sales at Del Sol, an apparel and accessories company that has stores in nearly 30 countries, recommends using business contacts in the countries you’re looking into.

“Network and reach out to other businesses in the business community and try to offer assistance in areas where you might be of value to them down the road,” Tate said. “You’ll find, as we have, that other businesses are willing to provide very helpful assistance.”

2. Get Accustomed to Overseas Leasing Agents and Customs Brokers

If you’re looking to not just export your product from the U.S. to another country but actually open a store location there, it’s smart to get an overseas leasing agent. These agents know the country and local area you’re interested in. That means they can more easily find the right location for a store location and better negotiate price. Leasing agents also come in handy if you need to find an apartment or rental home for employees.

Customs brokers are either individuals or corporations that are licensed, authorized and supervised by the U.S. Customs and Border Protection. It’s a customs broker’s responsibility to know a country’s rules and regulations and ensure your business follows them. They deal with customs officials and can be your translators.

Tate said that if Del Sol doesn’t already have contacts in a certain country they’re wanting to sell in, they turn to a good customs broker.

“We found that customs brokers are motivated to help companies bring their goods in and look at the relationship as a potential long-term business opportunity,” he said. “Our experience has shown that they’re eager to help new businesses network with some of their clients and introduce the business to other resources, such as business attorneys or attorneys well-versed in local labor laws.”

3. Logistics for International Trade

Logistics are a common problem with international selling. You can opt to handle your international business logistics on your own or outsource this work.

Some companies use a third-party logistics company to transport their products from one country to another, while others hire freight forwarders. These people oversee international product movement, as well as handle packing, documentation and customs clearance, for global importers and exporters. If you choose to go at logistics alone, you need to understand how to correctly do four things-packing, labeling, documenting and getting insurance-when shipping a product overseas.

4. Don’t Be Taken by Surprise by Potentially Prohibitive Hidden Costs

Duties, taxes and tariffs can add up quickly and eat up any profit you’ve estimated for the venture if you aren’t prepared ahead of time. In addition to customs and duties, other hidden costs include different types of local taxes. Depending on where you’re importing to, your products may be subject to value-added taxes or local taxes. These taxes might impact which port you ship to. There can also be additional requirements to have importing permits in order to bring in certain product categories, and if you don’t have the correct permits, you’ll end up paying for it. You also should consider the additional freight and storage costs once the product has arrived if you choose to distribute somewhere that’s far from where you decide to import.

With a little digging, this information is typically easy to find. You can find helpful resources on your own with some online research. But according to Tate, businesses should rely on outside support so you’re not blindsided by an issue.

“Do more than researching online. Again, this is where reaching out and contacting a customs broker is a better way to go. They will be eager to earn your business and will not want to provide you with incorrect or insufficient information,” he said. “A good customs broker will also be able to provide you with a very accurate estimate of what the different local costs will be.”

Selling your products internationally is a challenging endeavor, but it’s one worth taking. It allows you to advertise your company and products to new countries and customers. And with these tips, you can more successfully begin selling internationally.