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Feb
2017
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Subscription Box International Shipping 101

If you run a subscription box business there’s a good chance you’ve been approached by those die-hard international consumers that would give anything to subscribe to your service! I’m willing to bet you’ve even thought about offering your subscription internationally, but just kept pushing it off. Delay no longer! Because I’m here to tell you that with the right planning, shipping internationally is very approachable and can unlock a world (literally) of new potential for your business.

For many fairly established subscription box businesses, simply adding an international shipping option and announcing it to your email list is likely to increase your total subscriber base by 5-10%. Other benefits of offering your subscription internationally include the ability to target other countries besides just the United States in your paid advertising efforts. Personally, I’ve had success creating Facebook lookalike audiences using the profiles of my domestic customers to quickly target ideal customers in other countries.

Before we dive into all the details though, let’s address the elephant in the room! Yes, international shipping will cost more than your domestic shipping, but that’s not a reason to look away. Adding international shipping and integrating it into your existing packing and shipping operation is actually quite easy. But don’t jump the gun just yet – I’m going to lay out all the important things to consider before launching your new international shipping offering.

What does it cost and what should you charge?

For the purposes of this guide we’re going to be discussing USPS’s international postage options. I’ve personally always stuck with USPS First Class Package International (more details below) for a variety of reasons, but most importantly because it’s far less expensive than carriers like FedEx or UPS, and I’m able to process both my domestic and international labels in the same batch, and have them picked up in the same time without sorting anything. The last thing I want to do is spend extra time separating all my international addresses each month and processing labels through a different carrier – inefficiency can be a killer for subscription box businesses.

When shipping internationally with USPS, there are four different international shipping services to consider:

  • First Class Package International: The cheapest way to ship packages that weigh 4lbs or less. Although it’s a little slow at 2-3 weeks depending on the destination country, this is my recommended service for most subscriptions.
  • Priority Mail International: If your package weighs over 4lbs or you just want it to arrive quicker within 6-10 days, this is a great option.
  • Priority Mail Express International: 3-5 day delivery, but now it’s getting really expensive!
  • Global Express Guaranteed: The fastest service USPS offers, with 1-3 day delivery… but the most expensive!

While many American subscription box businesses enjoy the flexibility of dimensional rated USPS Priority Mail Cubic, where the rates stay the same all the way up to 20lbs, your international shipments will be rated depending on the exact weight and destination. If you can keep your box under 4 lbs, USPS First Class Package International is going to be the most cost effective solution (not to be confused with domestic-only First Class Package, which only goes up to 15.9 ounces).

When you’re shipping with First Class Package International, if your box is between ½ to 2 lbs, shipping will cost $14.73 to Canada, $19.71 to Mexico, and $21 to $22 to the rest of the world, for a worldwide average of around $20.35. These rates I’m mentioning are the absolute best rates USPS offers (Commercial Plus Pricing) and are up to $3 cheaper than what you’d pay at a Post Office. While you would normally have to pay monthly fees or markup to receive these rates, the subscription shipping platform Pirate Ship offers Commercial Plus Pricing with no markups or any fees, it’s totally free, so it’s an easy way to start saving on international shipping!

Now that you know what costs will look like, you can make a much more informed decision about how to price shipping for your international customers. I’ve always offered free shipping to my domestic customers and initially priced my box to include about $6.00 for shipping costs built into my price. For international customers, you’ll want to collect an additional flat rate shipping cost. My suggestion is to take your worldwide average (in my case $20.35), subtract the amount of shipping you already have built into your margin for domestic customers (for me, $6.00), then round up or down to a nice clean number. So at Yogi Surprise, we charge an additional flat rate of $15 for all international subscribers. This more than covers our costs for shipping to some countries, like Canada who are actually the majority of our international subscribers, so we even end up coming out slightly ahead for international customers.

Establishing policies and setting expectations

There are inherent and unavoidable risks when shipping a package thousands of miles across the 7 seas! Not to mention, there are a lot of inconsistencies due to each country having it’s own separate postal systems; not every country is blessed with as great of a postal service as the USA! My point is, there’s a larger margin of error that both you and your international customers will need to be aware of.

It’s going to be important that you establish clear policies for how you deal with returns, refunds and replacements for international customers. Because of the high cost of international shipping and the increased likelihood of a missing or damaged box, I always recommend adding insurance – this is especially important if you’re using USPS First Class Package International as it doesn’t include any insurance by default (Priority Mail International includes up to $200 in coverage, but is also a significantly more expensive service). Pirate Ship offers the option to add insurance to First Class Package International shipments at a rate of $1.35 per $100 of insurance.

You’ll also want to be very clear with international customers about delivery time expectations and potential inconsistencies in tracking. First Class Package International takes an average of 7-21 days to arrive depending on the country it’s going to, and USPS does not guarantee delivery dates or times. It’s also important to note that while you do get a tracking number for your First Class Package International shipment, end to end tracking is not always available. It’s common to see tracking updates completely stop after the package has left the United States. This is completely normal, but a customer that notices this is likely to think that something has gone wrong. Make sure your customer service team is aware of what’s considered normal for an international shipment.

Insider’s tip: Although USPS may not include end-to-end tracking, sometimes you can put the tracking number into the receiving country’s postal service’s website to get more information!

Another thing to be aware of are customs. Every country has different laws regarding importing merchandise, and every country reserves the right to inspect packages that are crossing its border to see if the recipient will owe any taxes. This is an unavoidable part of international ecommerce, and it can delay your package while the customs agents try to reach your customer and get them to pay anything they owe. Because there are so many different countries and so many different laws, it’s not worth your time to plan for this or try to take on the tax liability on your customer’s behalf… so it’s important to be very clear about the possibility of delays and import taxes in your checkout or FAQ.

One myth is that you can get your package around border agents without delay or taxes due by filling out the customs form with inaccurate data, like calling it a “Gift” instead of “Merchandise,” or entering the financial value as far less than the customer paid. Unfortunately this is not true, as most countries tax both “gifts” and “merchandise,” and your customer may be required to show a receipt to prove the value of the items. I always recommend just being honest, and leaving it up to your international customers to deal with their own country’s laws.

Pirate Ship makes international shipping easy

Yes, you got me, this is a plug (I’m a co-founder), but one of the reasons we built Pirate Ship is our belief that international shipping shouldn’t be any harder than domestic shipping. That’s why you can buy both types of shipping labels with Pirate Ship in the same batch, and setting up your shipping presets and filling out the customs form only takes a minute.

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