Shopify International Shipping and Payments

Growing your business will inevitably bring you at some stage to take your online store internationally. This is an important step as it will impact the business in logistics, costs, and administration (Duties filing). If your business model currently covers the United States with promotions of free shipping, taking this model to international markets will incur higher prices than what the exchange rates would translate to. Payment methods will be different at different rates, and the final mile of delivery will in most cases be higher. Here we will cover the key areas to factor into your international strategy, and what it means to take your Shopify Store global.

Current stats in 2022

Today, one in four people is an online shopper, the eCommerce market is still growing by trillions of dollars year-over-year, with a significant push seen over the Covid-19 pandemic. The average order value is 17% higher than the average domestic sale. This usually is due to ensuring that the order leverages the cost of shipping since the desire for the items is at a higher level. Retailers that have their online stores in the international markets tend to grow 60% more than domestic Shopify stores. Social media which have no international boundaries today have helped audiences to expect businesses to offer their products at the international level. This means that the larger audience has expectations in geographically relevant stores, has linguistic transitions, friendly currencies through payment gateways catering to their payment methods, and lastly - decent Shipping costs. The internationalization of your Shopify store will take strategy and careful evaluation of your business model.

International Shipping Strategy

A lot has to be considered as previously mentioned, however, the recommendation is to dip your toes in first with nearby markets that show interest in your products. If you are in the USA, try looking into Canada. The moment you go internationally, ensuring that the products get delivered at a reasonable cost requires that the supply chain from your store outbound has the least mode of transportation changes possible. If ground shipping is by trucks and vans between depots to the home of your customers, that makes it more reliable and cost-effective than Air, Sea, Truck, and delivery van. Additionally, reviewing the shipper's network is useful when it comes to checking their rates to your first country of interest vs. competing networks. Mature shippers have lower costs and faster deliveries. When shipping to neighboring countries, you get the more established logistics businesses at the best costs, so you can focus more on the online store's structure of payments, language, and exchange rates.

Linguistic considerations

When considering your first country to expand into, it is an important step to figure out the linguistic customer experience. As an example of going from the USA to Canada, there is English and Canadian-French to factor in. To account for the Shopify International strategy, a new domain and a new store with the currencies being communicated in Canadian Dollars is part of the linguistic experience. The Payment gateway has to be able to transact the Canadian Dollars at exchange rates that make sense for your business. Language outside of the experience in purchasing such as Customer Support, Blogs, and FAQs is also important for your marketing and confidence building for users that want to buy your products. In most cases, you would be looking at a new Shopify store with a domain such as ca.mydomain.com pointing to it.

Country rules and regulations

Every country has these where taxes and duties are imposed on certain goods. Research on your products and the impact they may have entering that country must be factored in. The customer is used to paying one price for the item and a shipping cost for it to arrive at their home. The last thing you want is a customer having to pay an extra fee via the carrier to receive their product as the tax and duties aren't small impacts on the overall price. For example, in the United Kingdom, there is Value Added Tax (VAT) and Import Duties that are imposed by HMRC. This can add up to 20% VAT + the Import Duties for the classification of the item and all of the increased cost is based on the base cost of the product. Shippers such as FedEx, and DHL have to ensure that these requirements are met via your paperwork, otherwise, they will contact the destination client and request payment before the final delivery.

Dangerous Goods

A product that can cause harm during transit needs to be identified. Canada and the UK are good examples where their Government websites show what are dangerous goods, and how they classify products. Additionally, these websites also will give you the tax and duties associated with your goods.

Shopify Shipping and Shopify Labels

Shopify has its own Shopify Shipping, the carriers are USPS, UPS, DHL Express, Canada Post, and Sendle - together they form a global network and have preferred shipping rates (discounted rates) into Canada, Australia, and the USA. When you use Shopify Shipping internationally, the Shopify Labels automatically generate the customs forms and documentation associated with the destination country and can be printed with your in-house printer. When shipping through DHL Express from the USA, the documentation is sent to customs electronically, therefore there is no additional paperwork necessary to be sent. From the pick-up perspective, all the above-mentioned carriers have either free or discounted rates to gather up your goods except for Canada Post.

Payment Gateways and local methods

Not every country does business via credit cards, and payment gateways have different ways of making online payments with different ways for clients to pay for their goods. This requires your evaluation of the appropriate payment gateway provider for the country you are going to sell. Usually, you might find 2-3 options, considering the type of goods you are going to be selling, that might reduce further if they are dangerous goods, or the items might be more prone to fraud, regulatory issues, or chargebacks. Selecting the right payment gateway is a key ingredient in your international strategy. Lastly, where the fees might be reasonable, check the exchange rates from the provider to your bank, since it can impact again to your bottom line.

Conclusion

When taking your Shopify Store International your planning has to be thorough to be successful in taking this step. Making the first step simple, testing it with a few products, and doing your market research on competition and demand are all part of the study. Shopify Shipping is a great option to start with, especially if you are expanding from the USA. If you were in the EU, the UK is a good place to explore. Your business model is best to be considered a stand-alone store, that is geographically specific, and has the right linguistic considerations, currency, payment methods, and cost structure. Free shipping will most likely not be a consideration unless it is cost-effective to do so. Lastly, it is good for SEO with HrefLang to do it this way, and with enough stores, you will find that Shopify Plus might be the best plan for you. If you have any questions feel free to reach out at wish@thegenielab.com