Code Red for Ecommerce: Using Universal Product Codes for International Shipping
E-commerce hits on a dynamic set of options when considered a global entity. US-based sellers enjoy a large market due to its simple population figures, but what happens when you want to expand your horizons and sales, and ship internationally?
There are factors at play, and each should be explored. Besides shipping costs and difficulties in communications at times, a major element relates to trade customs and duties. Thankfully, there is a universal code assignment system to ease the pain of having to formulate your own procedure.
Classifying products goes to the heart of custom and duty requirements, or taxes paid to governments in the course of trade. Tracking the type of goods being imported and exported is a primary function of all governments, and not every category is equal. If you endeavor to spread your sales territory across borders, get up to speed on the concept of clarifying the type of sale you’re making, and stay within the compliance expectations of various purchasers to maintain good relations. Even though the importer (seller) is technically responsible for paying customs and duty fees, purposely mischaracterizing the goods category can land you and/or your buyer in hot water. At best, it may cost your buyer more in customs and duty fees.
Your next move
We wouldn’t tell you what to do without guiding you to a resource on how to do it. The World Customs Organization (WCO) manages a universal database for these codes, updating and creating new entries as needed. The database of HS (Harmonized System) codes is available here, and should be considered a veritable bible for e-commerce sellers and shippers.
HS codes, and their variants, are purposefully tricky. This allows for more accurate levying of duties if certain aspects of a product are considered more or less pertinent to a country’s economy. It’s critical to be as exact as possible.
For this reason, some experts recommend leaving the HS codes off of an actual invoice. There are subtle differences in product sub-codes between countries, and if a customer requests a code for her or his purposes in a foreign country, you may be supplying the wrong code if you use a system in place for the US. This is an optional consideration and subject to further study. Read up on this topic here.
For more expanded definitions, explanations, and technical information on HS codes for international shipping, consult this article from sendcloud.com.