A guide to starting a shipping or export business
Going into the export business is a big decision.
Perhaps you’ve conquered the UK market and you see it as the next sensible place for you to grow your business. Maybe you’ve had solid enquiries which have led you to decide the potential is there to expand into new territories. Or maybe you’ve just identified a niche or untapped market you can step into.
Either way, you’ve got to be feeling positive about things, because you’re ready to take on the world!
But hold on. Selling and shipping within the UK can be difficult enough, but doing the same thing abroad can be a minefield. Not that you should be scared, just prepared for what you’re letting yourself in for.
This five-point plan has been devised to make sure you think of everything you need to before you ship your first overseas order.
Do your research
This should, of course, be true for any new business venture, but when you’re dealing with a different language, a different culture and different ways of doing things, there’s a lot more to get to grips with before you go leaping in.
For starters, is there actually a market for your product? Just because you think there is – or should be – don’t take another step until you can be as sure as you can be that there is. Just as importantly, is there a market at the price at which you’ll be selling? Once you’ve factored in things like your shipping costs, import duties and so on, the final price you charge may need to be higher than you’d hoped for.
Is there any competition to take into account, whether that means local businesses or others selling in from abroad? Does the country have a stable currency or are you going to be subject to fluctuations that could seriously damage your returns?
Are you likely to be affected by local health and safety regulations? In the UK, we have some of the strictest H&S rules in the world, so you may think you’re well prepared, but you do need to be sure.
Are you even allowed to sell your product in that country? You’d be surprised at some of the things that aren’t allowed in certain countries. Of course, you need to very careful about what you read on the internet. A little research suggests, for example, that in France it is illegal to sell a doll that doesn’t have a human face. Now that turns out to be untrue, but it is a good illustration of the sort of thing you might come across. Something may seem innocent to you, but could be offensive to someone from another culture.
You might be able to get advice specific to the territory you want to export to on the internet, as people are happy to share their experiences. Just put something like ‘exporting to China’ into your search engine of choice and see what you come up with. This one in The Guardian, for example, has some very useful advice on exporting to China.
Check legislation and restrictions for your product and packaging
Once you’ve checked out the legalities of selling in your chosen territory, you next need to check the legalities and costs of getting it there. Export duties at one end and import restrictions at the other have put paid to more than one export masterplan, so make sure you know exactly what you’re going to be faced with from the outset.
Every item being imported or exported needs to be classified, so that those collecting excise, duty, etc can collect the right amount. This official guide will help you work out how you need to classify your particular product.
You may also face restrictions on the type of packaging you can use. Untreated wood is subject to what are known as phytosanitary regulations in many countries, which are designed to prevent the spread of tree pests around the world. Using heat treated pallets and cardboard or plywood boxes, rather than wooden crates guarantees easy transit. If you’re not sure whether the wood in your packaging has been treated, look out for what is known as the ‘wheat stamp’, which looks a bit like this:
Find out what help is available
The internet is full of advice, as mentioned earlier, but if you want more practical advice and support tailored to your own situation, there are lots of options, and this is a good route to take if it’s literally feeling like it’s you against the world.
The best source of support, advice and even financial assistance is the government, which is understandably keen to encourage UK businesses to sell their products abroad, because all that foreign revenue helps make the economy look healthier. Click here and you can start to find out just what is available.
Other places to look for help are the British Chambers of Commerce and another government body, UK Trade and Investment, which you can find here.
Protect your investment
After you’ve spent so much time and effort getting everything ready, sending that first load abroad might feel a bit like your first child leaving home! It’s a big world out there, and an awful lot can happen to it when it’s outside of your control.
Getting insurance to protect yourself against potential losses, while not mandatory, is very highly recommended.
Pick a reliable courier
We’ve all heard plenty of horror stories about couriers operating just in the UK. Bear in mind that when it reaches other countries, it will in all probability get handled by couriers you’ve never heard of, so you’re understandably going to be a bit nervous about what’s going to happen to your delivery.
The first thing you can do is look for companies with a good record of making deliveries, whether they’re based in the UK or in the country you’re delivering to. The good thing about the ‘world wide’ web and the increasing popularity of review sites is that you should be able to target a reputable company operating just about anywhere in the world.
The other thing you need to do is use strong packaging designed for export, and all the extra bumps, knocks and so on that will inevitably entail.