International Fulfillment: Ultimate Guide to Finding the Best Method

In-house international fulfillment has the lowest barrier to entry and allows your shipping strategy to be modified at any time. It usually costs more in the long run than outsourcing to a third-party provider, but in-house cross-border shipping is best for those developing their own in-house fulfillment operation or just testing the waters with international sales.

If you decide to go this route, start by learning about the best international shipping carriers and methods that serve the countries you’re selling to.

Consider these factors when choosing your carrier(s):

• Shipping speed
• Affordability
• Quality of service
• Insurance options
• Tracking capabilities
• Returns management

Some best practices to keep in mind when doing in-house cross-border shipping:

• Make sure to check country- or territory-specific regulations that may affect your international shipments. These restrictions largely affect hazardous or dangerous goods, but some locales restrict broader categories as well. For example, used clothing cannot be shipped to Saudi Arabia from outside countries.

• International shipments may require different packaging than domestic orders, mainly due to parcels going through many additional facilities and spending more time in transit. If your goods are susceptible to damage, include more dunnage or use sturdier boxes/mailers for international orders. To accommodate the cost of this, consider adding a handling fee to global orders.

For the most part, your usual order processing, picking, and packing method can stay the same when performing international shipping in-house—but your shipping label procedure will change, since you need to create customs forms. (Customs, which we will cover in more detail later, is an agency responsible for collecting fees and controlling the flow of goods into and out of a country.)

The simplicity of this task depends on the shipping software you use. Some programs print international customs forms and auto-populate customs fields for you, as shown in ShippingEasy’s Customs Information screen below.

If your shipping software supports customs forms, you can print the necessary documents from your usual system. If not—or if your shipping strategy doesn’t include the use of shipping software—you can use your carriers’ websites to get the job done, but adding this extra step breaks up the usual shipping workflow and requires more time to complete the task.

With cross-border fulfillment, your inventory is stored in your country, and a third-party logistics (3PL) provider handles the ins and outs of international shipping.

Similarly to the in-house method, each international order crosses borders and goes through customs, which entails applicable delivery duties and taxes. For most small-scale sellers shipping a small, consistent percentage of sales abroad, third-party cross-border fulfillment is the easiest and most cost-effective way to handle international fulfillment.

Most US-based fulfillment providers offer international shipping, but be sure to confirm this service and clarify the details before partnering with a 3PL.

Here are some of the top options for US-based fulfillment companies that offer robust international shipping services:

• ShipBob: Our top recommendation for small business fulfillment with more than 20 US warehouse locations that can ship internationally. As global business scales, retailers can opt to store portions of their inventory in any of ShipBob’s seven international warehouse locations.
• Red Stag Fulfillment: Best at handling large, oversized, heavy, or fragile products—and optimizing these tricky shipping scenarios to be as safe and cost-effective as possible. The company’s two US warehouses can accommodate international orders.
• FedEx Fulfillment: The logistics company’s well-entrenched global transportation network makes FedEx Fulfillment a qualified choice for maximizing shipping potential. The company’s warehousing and distribution services are effective and reasonably priced for small businesses processing 400+ orders per month.

Combine Multiple Fulfillment Companies

Some fulfillment partners have international shipping built into their offerings, while others exclusively ship to the country in which they’re based.

If your existing fulfillment partner doesn’t offer international shipping, you can choose an additional 3PL to handle the international portion of your sales without needing to break your contract and migrate all of your inventory to a new provider.

You can manage this type of fulfillment in two ways:

• Route international orders from your primary partner to your cross-border partner, which then handles customs and ships the goods to the customer.
  • Pro: This is the most hands-off way to manage this combination of fulfillment companies as this can be easily automated through the companies’ fulfillment platforms.
  • Cons: It will likely add a couple of extra days to the order’s delivery date. And, you’ll be paying double fulfillment costs for each international shipment.
• Partner with a 3PL capable of shipping internationally and store a portion of your inventory in its warehouse.
  • Pro: This option speeds up the process because all international orders are routed directly to this secondary company, which fulfills them from the stock already available.
  • Con: You’ll still face increased fulfillment costs.

Some US-based fulfillment providers boast an international warehouse network in addition to stateside locations. This allows clients to strategically distribute inventory throughout the globe—keeping shipping costs, time in transit, and duties low.

Using a global warehouse network is the best choice for most small businesses as it provides the convenience and cost-effectiveness of standard outsourced logistics and allows for maximally efficient, seamless international shipping.

Outsourcing fulfillment and shipping to a global 3PL also gives you the flexibility to redistribute inventory as demand increases in certain areas.

Here are some of the options that small business owners have for outsourcing global fulfillment:

Using a region-specific fulfillment partner is best for retailers nurturing strong customer bases in targeted locations. If you are a retailer with consistent sales in specific regions or countries, you can choose to partner with a fulfillment company based in those locations.

A portion of your inventory is stored on-location, and orders are shipped to your international customers without crossing borders. The rest of your stock is kept in your country for domestic sales. This method can be combined with US-based third-party fulfillment or in-house shipping for domestic orders.

For additional international orders coming from locations outside of these targeted regions, shipping can be approached in multiple ways:

• Cross-border ship certain parcels, depending on the distance between origin and destination countries
• Fulfill other international orders in-house
• Have them shipped by your domestic third-party fulfillment provider

To find a region-specific fulfillment service, try searching for fulfillment companies in the countries you frequently serve and reach out for an individualized quote.

When you ship goods to another country, you (or the customer) may be asked to pay duties and taxes before the shipment is delivered.

The purpose of these charges is for local governments to protect domestic companies from foreign competitors, control the flow of certain products, and raise additional revenue.

Here’s an overview of the fees you may encounter when selling internationally:

Duties are a type of tax charged on goods moving into or out of a country. These fees are separate from sales taxes and vary depending on your shipment’s country of origin and destination. They can include:

• Import duties, which are charged by the government of the destination country. This fee is assessed as a percentage of the shipment’s value, freight costs, insurance, and any additional costs.
• Export duties, which are charged by the government of the country in which the cross-border shipment originates. Many countries, including the US, do not charge export taxes.
• Tariffs, which are charged by the destination country to restrict the import of certain categories of goods that can be produced domestically.
• Anti-dumping duties, which are charged by the destination country. These fees are imposed on imports priced below the fair market value of similar goods in the domestic market.

Taxes are government fees charged on purchased goods. They are assessed as a percentage of the goods’ value and vary by country.

You may need to register for tax identification depending on where your international sales take place (along with your sales turnover). Check with the country’s government site for detailed information.

Some governments apply different tax rates to different categories of goods. The types of sales taxes you may encounter include:

• VAT, or Value Added Tax, is applied at every step of the supply chain. It accounts for an added percentage of the goods’ intrinsic value.
• GST, or Goods and Services Tax, is a flat-rate percentage of a transaction’s value.