Throughout 2021 we’ve seen a rise in new customers specifically creating their own ecommerce businesses in Australia – because of the pandemic restrictions, some people saw an opportunity to invest time into their passion, some people decided to use their time to build a business – ecommerce is the intersection of these. As a direct response to this, we’ve seen an increase in mistakes being made when shipping from a supplier in China to Amazon’s FBA in Australia.
Not knowing landed costs before manufacturing goods
One of the most commonly overlooked costs for new ecommerce businesses is not accounting for shipping before ordering their product with suppliers. As a freight forwarder, Personalised Freight Solutions guides businesses at all stages to help avoid situations like this where a company’s margins and cash flow are eaten up prior to their products arriving at Amazon’s warehouses in Australia.
Some of these costs included (but limited to):
Duties, customs, taxes and shipping costs entering Australia
When hosting products on Amazon’s marketplace, Amazon see’s this process as “companies expanding their business” therefore the import/ export requirements and responsibilities being placed on the seller (company wanting or currently selling items on Amazon). For any international goods entering Australia (and for the majority of countries around the world), there are duties, taxes, shipping and customs costs associated with the international cargo shipment (this varies depending on the weight, height, density and category the product being transferred falls within).
Failure to comply with these additional costs will result in Amazon refusing to accept the products shipped to them. Amazon clearly states this on their website, within their import and export inventory under Australia, highlighting that, “it is your responsibility to comply with all import and export laws and to ensure that the imported goods comply with applicable laws and regulations… Amazon will not be responsible for or collect any duties, taxes or shipping costs associated with FBA inventory. All shipments are required to use Delivered Duty Paid (DDP) delivery terms. Any shipment arriving at an Amazon fulfilment centre with collect charges, including any duties, taxes, or shipping costs, will be refused without further concession”.
Shipping to multiple Amazon warehouses
As Amazon randomly assigns FBA warehouses when shipping plans are created – this means potentially the shipment can be divided into multiple locations, which can potentially increase the overall shipping costs.
Goods in transit insurance
To ensure your cargo is covered throughout its international journey we strongly recommend taking up cargo insurance. Due to cover and circumstances differing, we recommend speaking directly to your provider or calling us today on 07 3207 9537 and speak directly to our industry specialised team on what type of cover meets your needs – from there we will either be able to assist you directly or point you in the right direction.
Alternatively, you’re able to receive an online international freight insurance quote on our website.
Leaving shipments to suppliers
A supplier’s and manufacturers primary source of business, is in the creation of goods – not international imports and exports. It’s important to highlight a supplier’s primary focus, as international shipping (especially with Amazon specific requirements) means keeping up to date with ever changing Amazon FBA preparation, customs clearance and the country laws of importing goods of the intended destination.
By working with freight forwarders (who specialise in international shipping), not only are they immersed with requirements and legalities – they also have extensive networks, who they work with regularly. Meaning, if there is a problem that arises they’ll have the time and resources to solve it. In comparison, to a manufacturer who potentially has a single method of working; not monitoring shipments in transit, not being able to dedicate time or have access to resources to stay up-to-date with changing legislation/ legal requirements for importing destinations and not having the networks when issues arise.
Shipping plans (or lack thereof)
Shipping plans are created as it enables the person/ company or in this case Amazon, to be able to identify what the inbound goods are and who they belong to. We recommend trying to make your shipping plan early, to ensure that your product you’re intending to ship doesn’t have restrictions in place.
If you have any questions about creating a shipping plan or would like to work directly with Personalised Freight Solutions to see how you’re able to improve the current plan you have in place – call our industry specialised team today on 07 3207 9537.
Not evaluating direct vs indirect international shipping to Amazon fulfilment centres
There are two options when evaluating shipping your products from your supplier in China to Amazon’s FBA warehouses:
- Directly ship from China to Amazon’s FBA warehouses.
- Shipping to yourself (or a 3rd party) to then ship the goods onto Amazon’s FBA warehouses.
1: Directly ship from China Suppliers to Amazon’s FBA warehouses.
As it sounds, directly shipping from your supplier/ manufacturer in China to Amazon’s warehouses is exactly that, shipping directly – you are also able to choose your own freight forwarding provider (outside of Amazon and your supplier). Shipping directly, is typically the best option when a consistent and long term relationship has been established.
Benefits of Directly Shipping from China to Amazon’s FBA warehouses in Australia
- Faster end-to-end times: by not having to make multiple shipments/ stops prior to reaching the final intended destination, the goods inevitably reach Amazon faster.
- Money saved: on potential 3rd party costs of storing your goods + additional shipping costs.
Challenges of Directly Shipping from China to Amazon’s FBA warehouses in Australia
- Complex shipping plans required: when shipping directly to Amazon’s warehouses, there isn’t one centralised location. Instead there are multiple warehouses – which require specific labelling and requirements (packaging and shipping standards set by Amazon).
- Not being able to inspect goods prior: because the product being shipping, came directly from the supplier you’re unable to review the quality.
2: Shipping to yourself (or a 3rd party) to then ship the goods onto Amazon’s FBA warehouses
When trialing a new supplier, making your first few shipments or having just started your business – typically, the cargo is sent to the business or a 3rd party to ensure that the quality of the goods and Amazon’s processes are followed.
Benefits of Shipping to yourself (or a 3rd party) from China – prior to Amazon’s FBA warehouses in Australia
- Goods are able to be inspected: ensuring that the quality is to standard prior to selling.
- Less likely to be rejected from Amazon’s FBA.
- Potential money saved: by initially importing a larger quality of goods and storing on premise of your business (the potential money saved here, is by ordering in larger quantities).
Challenges of Shipping to yourself (or a 3rd party) from China – prior to Amazon’s FBA warehouses in Australia
- Complex shipping plans required: with more moving parts, typically businesses will want the assistance of a freight forwarding company to assist them.
- It takes longer: to reach Amazon’s warehouses.
Not obtaining freight forwarding quotes
We get it, when running a business time is tight. When presented with an option which comes across as potentially requiring less steps (i.e. working directly with your manufacturing to ship your products), it can be tempting to want to say yes and “just get it sorted”. By not reaching out to specialists who worked directly in international shipments (freight forwarders), the potential can be damaging for businesses.
Think of freight forwarders as your external shipping department, they’re able to assist in end-to-end shipping management, including customs clearance, cargo transit insurance and keeping up to date with changes made for imports and exporting requirements for any of your intended destinations around the world. Initially, it may seem like time is what you’ll save when working with a freight forwarding company but their specialised skill set also includes their vast networks that they have around the world (which are unable to be made, unless you’re working day in and out within this industry). These relationships enable not only better pricing, but also more options available to them and clearer communication.
Under Amazon’s Seller Central within an article specifically for Australian sellers, Amazon highlights the value of working with freight forwarding companies, “although you may want to handle some or all of these import/export steps yourself, it can be easier to hire a logistics provider such as a customs broker or a freight forwarder to handle the process for you. These providers may have the expertise and the time to make sure that your inventory moves from one place to another in a timely and secure manner”.
If you haven’t to date or have been questioning if working with a freight forwarder will be worth the cost. Ask yourself, how much time, money and resources are you willing to invest for potential errors and mistakes made.
Not using a customs broker
Customs brokers help businesses to adhere to Governments laws and regulations when importing and exporting goods between the cargo’s country of origin and destination. In Australia, goods which enter the country are required to have a declaration submitted, the Customs Act 1901 (Customs Act) provides that only the owner of the goods or a licensed customs broker are able to submit this declaration.
By utilising customs brokers, companies are able to avoid delays, fines and complications when navigating the Australian Border Force and Quarantine regulations – primarily to mitigate risk by leveraging specialists knowledge in this field.
There are a number of holidays throughout the year in China, which have the potential to impact shipping timelines and costs of shipping. While this might seem obvious at first, throughout the year it’s easy to get caught up in the day-to-day operations of running a business.
We recommended copying the holidays below and adding them to your calendar, so that you’re able to plan accordingly with your international shipments throughout the year for 2022:
- Chinese New Year Holiday 1st-6th February 2022
- Mid Autumn Festival 10th-12th September 2022
- Golden Week Holiday 1st-7th October 2022
If you have any questions about creating a shipping plan or would like to work directly with Personalised Freight Solutions to see how you’re able to improve the current plan you have in place – call our industry specialised team today on 8618374923251 or WhatsApp us at WA.ME/8618374923251.