Quickstart guide: international shipping for your Shopify business

Rudi Eihenbaums

Dec 27, 2023

So you’re looking to expand internationally? Don’t let it eat into your margins and cost you unnecessary time. Here’s what to consider.

I spoke to OpenStore’s fulfillment, marketing, and business development experts to bring you the best advice on international shipping.

OpenStore’s Michael Brod, Fernando Cortez, and Juan Carlos Villalonga De Roda look after all operations for around 50 Shopify businesses in the U.S.

We discussed:

• when to expand your Shopify store internationally,

• how to ship internationally (a comprehensive checklist),

• the carriers to use and the shipping speeds to offer, and

• how to price international shipping (and whether or not to offer it for free).

Should you offer international shipping?

Consider this more than anything else before you dive in.

Is there a demand for your product(s) in other countries?

You might be seeing organic or direct traffic to your website from abroad in GA4, but that might not be enough of an indicator. Before you invest a lot of time and money in international shipping, follow these two steps to see if there’s traction:

1. Set up two shipping options for the target country: economy and expedited.

2. Choose carriers based on price and the highest quality service (check the T&Cs).

Hold off on offering a free shipping option initially (more on that later).

Test product-market fit

If you want to sell your product in a new market and haven’t noticed clear interest yet, consider running ads to gauge international demand. Fernando Cortez, a top performance marketing expert at OpenStore, shared his north star:

Before joining OpenStore, Fernando ran his own Shopify business for many years. Here are other upper-funnel metrics he suggests tracking for judging the viability of international expansion:

• Cost per click (CPC)

• Click-through rate (CTR)

• Add-to-card (ATC) rate

14-step checklist to set up international shipping

Now that you’re sure that international expansion is right for your business, this checklist can help you cover more bases for doing business internationally. (None of this should be taken as legal or financial advice.)

Customer experience

1. Compare international carrier costs, services, and delivery timelines. For example, USPS’ international rates are often better than those offered by UPS or FedEx.

2. Consider using Shopify’s own shipping service. Buy labels through Shopify Shopping and benefit from their partnerships with carriers for discounted rates. For example, Shopify offers reduced rates with USPS, UPS, DHL Express, and Canada Post in the US and Canada.

3. Clearly communicate shipping costs, including potential customs and import duties, to customers. 

4. Provide tracking options for customers to monitor their shipments.

5. Choose durable, but lightweight packaging to minimize shipping costs while ensuring product safety. Don’t compromise on quality. Seek out carriers that can provide you with free packaging materials. Check with USPS in your area.

6. Offer insurance, especially for high-value items, to protect against loss or damage during international transit.

7. Check legal restrictions for your products in your new target market.

Be sure to keep up with changes in shipping rates, carrier policies, and international regulations.

Import duties

Note that if you opt for Shopify Shipping, Shopify will automatically generate the necessary customs forms, reducing human error.

8. Complete all necessary customs declarations to avoid delays (more on this later).

9. Each country has its own set of rules and tariffs on imported goods. Familiarize yourself with these rules to avoid unexpected costs for you and your customers.

10. For customs purposes, ensure the declared value of goods being sent to your customers is accurate. To this end, classify your products correctly with an HS code. You can add it directly to each product page.

11. Use Shopify’s tools or third-party apps to automatically calculate and apply the correct duties (and sales tax, but more on this later). OpenStore’s team uses Zonos for Canada and beyond. If you’re shipping to the European Union, another popular Shopify app you can use is Eurora.

Stay updated on the customs processes of the countries you are shipping to.

Sales tax

Sales tax can vary based on the destination. Understand these differences to accurately calculate taxes.

12. Figure out where you have a sales tax nexus and your corresponding tax obligations.

13. Use apps (like Zonos) to accurately calculate and collect sales tax for international orders.

14. Keep detailed records of international transactions for your tax records.

Keep up-to-date with changes in sales tax laws in the countries you ship to.

What shipping speeds to offer?

Logistics and customer experience experts suggest offering three to four shipping speeds for domestic orders. Choose carriers wisely, Michael adds:

Try to give customers the same options for international shipping as well, for example, if shipping to Canada:

• Express, 1-2 days

• Expedited, 2-3 days

• Standard, 3-6 days

• Economy, 6-8 days

There’s a chance some customers will be happy to pay a premium for fast shipping. Others may be buying from you because it’s cheaper than it is in their home country, so always offer an economy option.

OpenStore’s business strategy expert, Juan Carlos, who has tested shipping options across almost 50 Shopify businesses in the U.S., told me:

How to price international shipping

Should you offer flat rate international shipping, or base it on package weight or size?

Michael recommends making sure that the unit economics work well if you want to ship to Canada. 

Should you offer free international shipping?

It depends. Shipping internationally will typically cost you more than shipping domestically.

You can view free international shipping as an investment into customer acquisition, or it can end up hurting your Shopify business' margins. Align free shipping with your international expansion strategy.

Potential benefits:

• Offering free shipping could decrease cart abandonment, and increase conversion rates.

• It could increase average order value (AOV), especially if it only kicks in after a certain amount and you promote that well on your site and product pages.

• It could also help you match or beat competitors. Check if it’s the norm or if it’s a value proposition that your competitors aren’t offering.

Drawbacks:

• Free shipping could, however, eat into your margins if you offer free shipping for cart sizes under $100 USD, experts suggest. This depends on your revenue and costs.

• It could decrease conversions if you ‘work it in’ to your prices and increase them by more than ~10%. Make sure to A/B test.

If you run a luxury brand, your customers may not expect to pay for shipping. Only offer free express shipping if necessary, as it can significantly eat into your margins.

But if you’re selling heavy products that need special handling, you should assess the trade-off between customer experience and unit economics when it comes to international customers.

In Shopify’s admin panel:

• Create a shipping zone for the countries you want to target,

• or just select them for automatic or rule-based free shipping.

Invest your time

What is the cheapest way for you to ship internationally? Use a mix of carriers and optimize your packaging.

An effective international shipping strategy involves understanding your customers and detailed knowledge of tools, regulations, taxes, duties, and carriers.

If you're tired of managing your business and want to reclaim your time:

• OpenStore Drive is an e-commerce management solution for Shopify stores that pays you passive income for 12 months.

OpenStore’s team of experts runs your business, handling everything including shipping strategy, logistics, marketing, advertising, and all other operations.