- What Is An Export?
- Key Players Involved In International Shipping
- What Products Can You Export?
- What Products Are Banned and Restricted In International Shipping?
- What Is De Minimis?
- Is a License Required to Export Products?
- Documents Required For International Shipping
- Different Stages For Shipping Products Internationally
- Top Country to Ship Your Products
- Benefits of Export
- Challenges in Exporting
- How to Choose the Best International Shipping Partner
Oh, let us get this straight. You are trying to sell your products internationally but are confused about how to go about it. Don’t worry, you’ve come to the right place!
In this blog, we’ll be discussing different aspects of international shipping – which products you should export, how to go about export documentation, and benefits and challenges you might face amongst other things.
So, put on your seatbelts as we start the information rollercoaster of international shipping.
What Is An Export?
The term “exports” refers to products made in one country and sold in another country. The seller of the product is known as an exporter and the buyer is known as an importer.
They are profitable for all businesses, big or small because the sales grow faster, more jobs are created, and employees make more than what they do in non-exporting firms.
For example, India’s total merchandise exports for 2021-22 were US$ 335.4 billion. Yes, big numbers! But have you ever considered who are the key players in International shipping, dealing with export or import? Not really?
Our next section discusses key international shipping players that enable seamless exporting. Are you ready for it?
Key Players Involved In International Shipping
Being an exporter of goods and services is an amazing thing to find yourself doing.
However, you would want to find out about others who are also key players in the international trade market. So, let’s look at them one by one.
- Shipper: Those who deal with shipments at the supplier end.
- Consignee: Those who deal with shipments at the receiving end.
- Freight Forwarder: Those who provide transport logistics for road, ship, or air transportation.
- Shipping Line: Those companies that carry product-related cargo.
Even if you aren’t exporting products manufactured by your country, there are a lot of gains to be made if you are into the operations of one of these professions.
What Products Can You Export?
There are a lot of things you need to keep in mind when you’re planning to prepare exports. Out of this, keeping a check of beneficial products to export is the most important one. In India, the most beneficial products to export include:
- Leather and associated products
- Petroleum products
- Jewelry and gems
- Automobile and its parts
- Pharmaceutical products
- Electronic products
- Dairy and meat products
- Handloom and cotton yarns
- Textiles and apparels
- Ayurveda and Homeopathy Medicines
- Organic Chemicals
- Iron and steel
Many businesses are successfully exporting these products and we hope you are or end up being one of those. Along with knowing the best goods to export, it’s also necessary to look out for banned or restricted products.
What Products Are Banned and Restricted In International Shipping?
For seamless exports, you need to know which products are banned or restricted in international shipping.
- What are Banned Products?
Banned products include products that will not be shipped under any circumstances. hey might be considered offensive, hazardous, or too dangerous to ship.
This includes products like live animals, hunting animal trophies, human remains of any form, drugs, and narcotics like marijuana, etc.
- What are Restricted Products?
Restricted goods are the ones that are allowed to be shipped, but only if they follow certain regulations. It falls upon the shipper to ensure that the regulations for restricted products are followed.
This includes products like alcohol, ammunition, radioactive materials, perishables, tobacco, etc.
If buyers and sellers for these sorts of products exist in the market, likely, the means of transaction between buyers and sellers isn’t legal.
So refrain from exporting any of these products, and if there are regulations to be followed for successful delivery, please adhere to them.
What Is De Minimis?
De minimis, derived from (you guessed it right!) Latin, refers to something that is of little significance.
According to the WTO definition, the de minimis rule refers to the minimal amounts of domestic support that are allowed even though they distort (impact) trade.
It is capped at 5% of the value of production for developed countries and 10% for developing countries.
Like other trade regulations, the de minimis level also differs from country to country.
When you are deciding on prices for your products, make sure to look at shipping costs, clearance costs, and other costs.
Is a License Required to Export Products?
Yes! Don’t forget this step at all. If you are exporting any products, you will require the Importer-Exporter Code (IEC).
With this license, you will be able to expand your business and reach out to a larger market on a global scale. Furthermore, the validity of the IEC lasts until the entity exists, so you won’t have to renew it.
Documents Required For International Shipping
Mentioned below are the documents you will require when preparing to export to another country:
- Aadhar Card: All exporters, importers, and customs brokers must undertake the authentication of Aadhar on the customs common portal.
- Pan Card: PAN is an identification number that is assigned to all taxpayers in India by the Income Tax Department. It is a required document for other mandatory registrations such as GST, IEC, etc.
- GST certificate: Every exporter needs to get registration under GST law to obtain a GST registration certificate. This number is required to be mentioned on all import/export documents.
- Importer-Exporter Code: IEC is a required 10-digit unique code required for the export or import of goods and services.
- Letter of Undertaking (LUT): LUT is a document that exporters file to export products without having to pay taxes i.e., the IGST. You can reclaim the IGST paid via a refund later on.
- Authorized Dealer Code (AD code): A 14-digit numerical code is essential to obtain from the bank your account is opened. A bank must be an authorized dealer of foreign currency to issue an AD code. It’s essential for customs clearance and enables you to get export benefits in the account.
Different Stages For Shipping Products Internationally
Oh, you didn’t think your products are safe to go as soon as you manufacture or acquire them right?
Commerce and trade industry is very much interconnected with regulations and hence there are a lot of checks that you might have to go through in the process of transportation and export documentation.
Let’s take a look at them.
1. Export Documentation
The first stage of shipping products internationally is getting your export documentation in order.
This can include export licenses, customs declaration forms, and other relevant paperwork.
It’s important to have all the necessary documentation to avoid any hiccups along the way.
2. Packing and Labeling
Once your paperwork is sorted, it’s time to pack and label your products for the journey ahead. Proper packaging is essential to ensure that your products arrive at their destination in one piece.
3. Freight Forwarding
Next up, it’s time to find a freight forwarder who will take care of the logistics of shipping your products.
Think of it like hiring a travel agent, but instead of booking a vacation, you’re booking a one-way trip for your products.
A good freight forwarder will be your guide through the sometimes choppy waters of international shipping.
4. Customs Clearance
After your products arrive in the destination country, they’ll need to go through customs clearance.
Think of it like going through security at the airport, but instead of taking off your shoes and belt, you’re submitting paperwork and paying taxes.
Finally, your products are ready for delivery to their final destination. Depending on the destination country and shipping method used, delivery times can vary greatly.
Make sure to manage delivery expectations and provide accurate delivery estimates to your customers.
And don’t forget to wave goodbye as your products embark on their grand adventure!
Phew, so many stages, so big rewards. In conclusion, shipping products internationally can be a wild ride, yet it can also be a thrilling opportunity to expand your business and reach new customers around the world.
The following section will brief you on which documents you’ll need for India exports.
Top Country to Ship Your Products
The inventor of the jeans and the country that dominates global currency is the one you should ship your products to. Wondering which country it is? You get 3 seconds.
The USA is one of the thriving and promising marketplaces you shouldn’t skip when planning your exports.
As long as you comply with norms and regulations, doing business isn’t problematic. USA’s Ease of Doing Business world rank is 6 out of 190 economies.
The country has 14 Free Trade Agreements with good bilateral relations with a lot of countries.
So, prepare your documents and fly your products to the USA for maximum trade surplus for your economy!
Benefits of Export
What can be better than exposing yourself to international competition and then thriving while making the best sales for the same?
With international trade, you’ll get access to new markets, expand sales, gain foreign exchange, and experience growth in the economy.
Being an international exporter has the following benefits:
- Global Customer Base
Whether it is a raw material or a finished product, export markets lead to a large global customer base. With the right marketing strategy, you’ll be able to cater to a vast audience and make good returns on your investments.
- Marketing Strategy
Your company’s marketing strategy will automatically improve when you realize your target audience and your audience expands worldwide. In this manner, you’ll get the advantage of broadening your campaigns and skill set.
With a global business, you’ll be able to expand your partnerships globally. Your partners will offer you different pricing and you’ll be able to succeed with good investments, conversion rates, and loyalty of your partners.
- Prevent Product Alienation
Now that you have found success with your local customers, you’ll have a chance to grow globally and offer international shipping of your products.
If you limit your product to one country, you’ll be underutilizing the capacity of your business and your products. Don’t miss out on good opportunities.
However, you cannot always look at international shipping with rose-tinted glasses. You’ll likely face certain challenges in shipping internationally. Let’s take a look at those challenges!
Challenges in Exporting
Logistic companies are trying their best to enable the seamless exporting of your products to another country. But the road is not free of certain potholes along the way:
- Early Cut-Off Times
Manufacturers need to send samples to retailers within the shortest time to get the retailer’s approval. However, early cut-off times put a constraint on the pre-production process, increasing the risk of errors.
- Non-Guaranteed Transit Time
Transit time varies depending on where the products are being shipped from and to. However, apart from the time difference, other challenges are port delays, customs clearance delays, human errors, etc.
- Poor Customer Service
Your operations are highly dependent on customer service. Your professionalism, attitude, responsiveness, and empathy, all matter a lot.
So now you know, exports aren’t a piece of cake, but they are worth the struggles you might go through along the way to make it possible!
How to Choose the Best International Shipping Partner
Before you export your products, you’ll need to choose a shipping partner for your exports. The following are the key considerations when choosing a shipping partner:
- Shipping Cost
Unless you don’t want to lose all your profits, you’ll have to look for options based on prices, express delivery, and other services. Couriers can be cheaper and slower, or faster but expensive.
- Delivery Options
Some customers want immediate delivery while others are willing to wait. You’ll need to offer multiple shipping options to your customers, based on their requirements. This will give them a choice between shipping speed and prices, decreasing your cart abandonment rate.
- Order tracking and Insurance
Live order tracking along with insurance is something that you need to have when you are exporting a product. It’s essential in case of any misplacement of your products during transit.
By keeping a tab on these factors, you’ll be able to choose the most suitable delivery partner for your exporting business. Isn’t that marvelous?
Now you know that the whole operation of exporting products is lengthy but so worth it.
All you need to do is get your documents ready, look at the customs regulations of the country you are shipping to, and partner yourself with a shipping company, like yours truly.
Once you have found yourself the correct shipping partner, aka us, they’ll ensure a seamless exporting process of your goods. So what are you waiting for?