Industryweek 13865 Export Minded

Export-Minded Small Businesses Should Think Inside the Box

Dec. 12, 2016
Logistics providers can help take the worry and complexity out of entering foreign markets.  

The journey of a thousand miles begins with a single step, as the Chinese proverb says. However, when it comes to exporting, some small businesses don’t know where--or how--to start.

The specter of excessive regulations and tariffs, the risk of fraud and the complexities of unfamiliar cultures, languages and laws are among the barriers that can discourage small businesses from dipping their toes in international waters.

“It really comes down to this idea of fear of the unknown,” says Bill Seward, president of U.S. International for UPS. “A lot of our small-business customers don’t have a passport, they have limited contacts and they’ve never crossed borders. It just seems very scary.”

Importantly, small businesses also might not be aware of the breadth of resources--just a phone call or mouse click away--that can help them navigate the intricacies of international trade.

“The No. 1 thing I would say is that small businesses don’t need to feel like they have to go it alone,” asserts Seward.

‘Ready, Willing and Able to Help’

The Export-Import Bank of the United States, the U.S. Small Business Administration, the U.S. Commercial Service and local chambers of commerce are among the entities that provide guidance and assistance to small businesses aspiring to break into international markets. What small businesses might not realize, however, is that international logistics providers such as UPS are “ready, willing and able to help” as well.

“With an integrated small-package provider such as UPS, you’re tapping into 220 countries and territories around the world. So the world immediately becomes your oyster,” Seward says. “Through brokerage, fully landed costs and access to our worldwide network, we simplify the shipping process for small businesses, making it less scary and burdensome.”

LemonDrop Stop, a Monticello, Minn.-based small business that produces photographic backdrops, learned this firsthand. When Floyd and Jessica Baker started selling to international customers, the husband-wife team struggled to stay on top of the taxes, bookkeeping and accounting that came with exporting. At one point, the Bakers found out that they owed $50,000 for underreported Canadian duties and taxes--even though the Bakers were expecting a $2,000 refund.

“I was spending 90% of my time working orders outside the U.S. that were only 10% of our business,” says Floyd Baker.

When the Bakers contacted UPS, the company recommended its iParcel service, which takes care of a number logistical concerns that can be a major headache for small businesses. UPS iParcel processes all duties, fees and taxes for the shipper, ensuring that international orders move through customs without a hitch.  

“We will become the merchant of record for a small business,” Seward says. “We take over the shipping process for them and own the risk of credit-card fraud.”

Seward describes UPS iParcel as “a one-stop shop for cross-border e-commerce shippers.” In addition to providing customs brokerage and collecting payment in more than 70 currencies from international shoppers, iParcel includes a content-management tool that enables small businesses to give their website a localized look and feel--regardless of the shopper’s country of origin.

When international shoppers visit a website powered by iParcel, they can view the fully landed costs of their orders (including all duties, taxes and brokerage fees), choose from a variety of local payment options and track their deliveries. UPS iParcel handles all customer questions and provides information about payment or order status, typically within one hour.

“We spent a lot of time learning how to export internationally,” Floyd Baker says. “Today, I let the experts do what they’re good at, and I do what I’m good at – branching out into related products we didn’t have time to touch before.”

Managing a Global Supply Chain

When Nicole Snow founded Darn Good Yarn in 2008, the U.S. Air Force veteran turned to FedEx to help get her home-based yarn distribution center off the ground. In one of the unlikeliest of places--northern Maine--Snow built a global supply chain, importing reclaimed fibers from India and exporting finished yarns to retailers, distributors and individual textile artists around the world.    

Snow, who in 2014 moved the business to Schenectady, N.Y.--where she added a retail storefront --has turned her home-based business into a global operation with the help of various FedEx international shipping services and her FedEx account representative.

“I can ship worldwide,” Snow says. “Not just ground, not just home delivery, but International Priority, International Economy services. [FedEx is] really like a part of the Darn Good Yarn family. I think they take an ownership in seeing me do well too.”

In addition to its logistical help, FedEx has provided something that any small business needs to keep growing: cash. In 2013, Darn Good Yarn received a $25,000 grant as part of the annual FedEx Small Business Grant Contest. Other grant winners have included In Blue Handmade, an Asheville, N.C.-based producer of customized leather goods; Paleo Treats a San Diego-based maker of paleo-lifestyle-friendly desserts; and Ginjan Bros., a Harlem, N.Y.-based startup that develops and brings to market traditional African beverages. All are FedEx customers.

The FedEx Small Business Center on the FedEx website provides a variety of resources for small firms that are just starting their export journey. The “Go International” section of the Small Business Center includes: an online assessment to help businesses gauge their readiness for exporting; a video highlighting best practices for international shipping; country-specific fact sheets to help with market research; a tutorial on customs compliance; and regulatory alerts and news that can affect international shipments. Small-business owners also can download the “FedEx Trade Road Map,” an interactive PDF guide that covers the fundamental concepts of exporting, including setting prices, collecting payment, clearing customs and managing returns.      

Delivering and Keeping Promises

Itty Bitty Toes, an online boutique that sells European-made luxury children’s clothing, promises worldwide delivery in two to five days. Egreis Gjergjani, who founded the business in 2015, partnered with DHL Express to ensure that she can make that claim and deliver on it. However, she has leaned on the logistics provider for more than just fast import and export delivery times. With limited knowledge of customs procedures and international regulations, Gjergjani realized that she needed help with invoicing, taxes and Harmonized Tariff Schedule (HTS) codes, and she needed to earn her customers’ trust as a new business.

DHL Express takes care of the invoicing, taxes and HTS codes for every shipment, which Gjergjani calls “a huge relief.” Also, she no longer needs to hire a customs agent to clear her shipments.

“All I have to do is provide a copy of the invoice for every package I ship and DHL Express does the rest,” Gjergjani explains.

According to Gjergjani, Kansas City-based Itty Bitty Toes processed more than 800 orders in its first few months, with over one-third of those orders coming from international customers. She says she hasn’t received any complaints of late or missing packages, which has helped her to grow the business and build its reputation as a reliable place to shop.

“Partnering with DHL Express has increased the sense of safety, security and trust our customers have when shopping with Itty Bitty Toes,” Gjergjani says. “We promise a two- to [five]-day delivery and are able to keep that promise – every single time.”

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