Selling goods abroad: ways to organize logistics

Sales from Ukraine abroad are becoming more active every day. More and more Ukrainian entrepreneurs want to enter international markets, expand their brand's audience to foreigners, and earn higher profits.

However, in order to sell for export, you should analyze the specifics of your business and the available options for delivering your products abroad.

What are the ways of delivering goods to Europe, what are the terms of transportation, and how beneficial are they for your business?

Rules for the transportation of goods abroad

Before scaling up your sales, familiarize yourself with the information on exporting products abroad. 

Payment of duty

Customs duties may be charged on all categories of goods in accordance with the customs legislation of the recipient country. The suspension of tariffs, in accordance with the updated EU-Ukraine Association Agreement, is effective from 1 January 2023 for agricultural and industrial products (fruits and vegetables).

All international express shipments are subject to duty payment by the recipient, with the exception of parcels up to 45 EUR sent as "personal items" or as a "gift". For more information on the calculation of customs duties for commercial parcels, please visit the Nova Poshta website.

What goods cannot be transported abroad?

In addition to customs duties, you need to clearly define your target market in Europe. Determine whether your goods fall into prohibited categories and whether they require special import permits.

This will help you understand the quality standards that can be set in EU countries.

Prohibited items for international shipments include:

• alcohol and drugs,

• food products,

• medicines and vitamins,

• tobacco,

• money,

• antiques and art objects,

• goods of animal origin,

• postage stamps,

• military and dual-use goods,

• seeds.

It should be noted that each postal operator has its own requirements for international transportation, so it is better to check them in advance.

Items prohibited for shipment via Ukrposhta.

List of dangerous and prohibited goods for international parcels via Nova Poshta. 

For international trade, you may need to draw up documents: an invoice, a declaration of shipment, certificates of compliance with EU standards, etc.

In addition to the above, you should pay attention to the packaging and labeling of parcels — they must be properly and securely packaged and labeled in accordance with international standards. It is recommended to insure international parcels with expensive or fragile items.

Choosing the method of delivery of goods to the consumer

Direct delivery from Ukraine through postal services

Direct or targeted delivery of goods means sending a parcel directly to the consumer, without intermediaries. If you are delivering goods to a foreign customer, the postal operator cooperates with local carriers who deliver the parcel directly.

In Ukraine, targeted international shipments are carried out by three carriers — Nova Poshta, Ukrposhta, and Meest. To implement this method of logistics, you need to set up an appropriate order form on the website and correctly draw up invoices for further transfer to the transport services.

Ukrainian entrepreneurs note that the main advantage of this method is that the entire logistics process takes place without the seller's participation, except for the actual processing of the parcel through the postal operator. 

In addition, the quality and speed of such deliveries are constantly being improved, which helps to improve service and minimize business risks.

However, direct delivery from Ukraine has its own nuances. Namely, the need to pay customs duties when sending large consignments of goods or expensive products, as well as the services of a broker for customs clearance.

Also, the cost of delivery to countries where postal operators are not yet present is rising. This also applies to transportation times. For example, the delivery time and cost of parcels from Nova Poshta to distant countries is several times higher than to neighboring European countries where the carrier is present. 

Fulfillment

Fulfillment is the process of processing and fulfilling orders, which covers the entire cycle of logistics operations: from the moment an order is placed to the delivery of goods to the consumer.

This service is quite popular abroad. It is provided by third-party companies at the request of a logistics service, such as Nova Poshta. In this case, the store owner does not need to rent a warehouse and pay employees abroad. All work with orders, storage of goods, and their delivery is handled by intermediaries.

What is the advantage of this method of international transportation?

1. You do not need to control the entire process of delivering goods to the end user.

2. Extensive coverage of logistics centers abroad — there are logistics centers in every country.

3. Fast delivery to the client.

4. Fulfillment centers can also process returns and exchanges, which makes this process more convenient for sellers.

But fulfillment also has its drawbacks:

• overpayment for intermediary services,

• There are quite a few cases of improper storage of products in the intermediary's warehouse,

• It is difficult and unprofitable to sell seasonal goods that require monthly storage fees. Leftover goods are more expensive to store than to return to the owner.

However, in an ideal situation, fulfillment centers in the countries where the target audience is present can greatly simplify logistics and reduce international shipping costs.

Lease of foreign warehouse

A more expensive way to organize overseas deliveries is to rent your own warehouse in the country where you plan to sell. This method makes sense for large companies that want to expand abroad and have high sales turnover. It is convenient because goods from a foreign warehouse will reach the consumer faster through local carriers if the warehouse stocks are replenished in time.

Renting a warehouse is also beneficial for sellers who produce or sell specific goods that buyers would like to see physically. For example, it can be rare glass, ceramics, porcelain, expensive ethnic or fashion clothing. Or it could be specific equipment that is produced only in Ukraine.

Usually, goods are delivered to foreign warehouses by postal operators that have freight transportation services. When choosing local carriers in Europe, you should focus on the preferences of local residents and be sure to add options for receiving an order by the consumer on your website. For example, in Poland, postal machines are quite popular. 

The pros of such a method:

• high delivery speed,

• greater customer confidence in local carriers,

• no problems with the delivery of parcels from Ukraine on the way to the recipient.

Among the disadvantages, entrepreneurs note:

• The need for personal control of the owner or trustee over the condition of the warehouse abroad.

• High costs for organizing the warehouse and renting it.

• You need to have an officially registered campaign to sell through a foreign warehouse.

Each of these methods has its advantages and disadvantages, so it is important to choose the one that best suits your needs and capabilities. When shipping goods to international markets, it is important to take into account the customs regulations, standards, and tax requirements of the recipient country.