The world is getting more global, and Shopify users are poised to get the most out of new markets opening up around the world - in fact, global ecommerce will total $4 trillion by 2020, with much of the growth coming from emerging markets, such as Poland and Kazakhstan. However, just because it’s possible doesn’t mean it will be easy. Because we’re (quite selfishly) motivated to ensure that as many Shopify store owners do well as possible, we’ve decided to condense all of the complicated, conflicting information that’s floating around on the internet about internationalization into one three-part series.
Make sure to catch the first article of this trilogy, Why Localizing Your Shopify Content Matters, And How To Do It, where we talked about how to make sure you’re using the right language and content to win over your customers, no matter where they are. Interested in being a pro at handling international currency? Check out the second article, How To Handle Money Globally: Payment, Conversions & Pricing for Shopify, where we cover everything you need to know to get the most financial value out of each international purchase.
It’s easier than ever to sell across borders and continents, especially when you use Shopify to manage your e-commerce store. But if you’re shipping products that your company manufactures, a customer purchase is only part of the story.
What You Need To Know About Tax & VAT
Before you begin selling in another country, you’ll need to understand their tax laws, including value-added tax (VAT) and goods & services tax (GST), if they apply. Keep an eye out for other taxes that may be specific to the region as well!
You can easily get a rundown of everything you need to know on a regional basis from Export.Gov, which is a free service that provides market intelligence and country commercial guides. These reports will include market conditions, regulations, customs, and even opportunities, so make sure to take advantage of this resource before you enter a new market. You can also find trade events lists, intelligence and leads for your industry in your chosen location.
If, even after you’ve reviewed the data, this all still seems overwhelming to do manually, you’re not alone - and yes, there’s an app for that. There are a few companies that can help you stay tax compliant, and prevent surprise charges or fees from international governments. Our personal favorite is Avalara, which is a tax automation software that can be customized to your business. This solution also seamlessly integrates with Quickbooks, Netsuite, Magento, as well as other common solutions. Shopify Plus merchants will be excited to know that Avalara is included as part of your subscription and easy very easy to configure.
Get The Product There
Once you’ve decided on how you’re going to manage your taxes, you’ll need to figure out how you’re going to get your products from where they’re made to the people that buy them. Fulfillment, or the process that includes physically producing, assembly and shipping products, is one of the biggest challenges any seller faces, but most especially manufacturers that sell overseas.
For most companies, a 3PL, or third party logistics company, is the best solution. These vendors provide outsourced services that help you move and deliver your product without your company needing to manage the entire process. You have three that are automatically shown on your Shipping settings page by default: Fulfillment by Amazon, Shipwire and Rakuten. You can, however, choose another service if you’d prefer to.
However, if you already handle fulfillment internally, then a warehouse and shipping management tool will make the difference in your fulfillment capabilities. Our favorite option in this category that integrates perfectly with Shopify is Whiplash, which offers affordable, customizable warehouse and shipping services, and a fully integrated plug-in for your Shopify dashboard. We love their super responsive customer service!
Alternatively, if your company operates through dropshipping, you’ll need help coordinating orders with your vendors. We recommend DuoPlane, which completely automates your fulfillment cycle so you can get back to gaining more customers and scaling your business.
Another great option that we love for being multi-functional and uniquely focused on both shipping and international tax compliance is Shopify app Yakit. This app makes duties and taxes visible along with shipping cost in the customer’s shopping cart, which keeps your buyers informed and your company’s bank account happy.
Regardless of what type of company you’re looking to partner with for your fulfillment needs, it’s important to ensure that they understand - and, ideally, specialize in - international shipping. This isn’t the place to cut corners or go with the lowest bidder even if they don’t have a stellar reputation, unless you want to risk products showing up damaged, late, or not at all.
Managing Your Inventory Properly
Now that you’ve worked out the kinks in how you’ll manage your taxes and fees, and you know your fulfillment process, it’s time for the final necessity: inventory management. Because one of the worst things you can do is tell a customer you have a thing, and then be out of stock and ask them to wait. This leads to several things that exactly zero percent of entrepreneurs want: upset customers, unpredictable production costs, and an excessive overstock of goods that aren’t selling.
Our recommendation is StitchLabs, an inventory management software solution that is specifically designed for high-growth (and therefore rapidly changing) brands. The team at Stitch focuses on retail, and their platform has everything that a Shopify seller is going to need, from that very first sale to the founder retiring into the lap of luxury.
The platform includes more than just inventory management - they also assist with order processing, future planning, and order optimization (great for more complicated purchases or a customer that completes several different purchases in a short period of time). You’ll also be able to see availability of products across all of your sales channels and warehouses, which means no blind spots. Lastly, they allow you to track exactly what’s working and what isn’t with your offering, which means you’ll have objective data on how to make your store better and more profitable.
Make Reliability The Core Of Your Fulfillment Strategy
Managing a Shopify store is an incredibly fulfilling - and quite lucrative - business, but to achieve true global success, it’s important to make sure your customers have a great experience. That means making sure that even after the purchase, their expectations are met or exceeded. A big part of the customer loyalty puzzle is ensuring that their purchase goes smoothly, and they receive their products quickly, so don’t skimp on fulfillment!
That’s all for this series! If you missed them, make sure to catch our first two articles:
If you have any questions about this series, please don’t hesitate to contact our team.