eMarket Integrations: Region-Specific Shipping Process

Shipping Rules in Different Regions

One of the most important things to consider for international shipping and fulfillment in eCommerce marketplace is that different regions have different rules and regulations for shipping across national borders or state lines. There may also be different rules inside a region or state, such as in different cities or counties.

We need to know how commerce in each place is supposed to be conducted, and what tax forms and regulations apply to each of the different product types. Different products can be taxed and regulated in different ways, and they might also have different customs and duties.

Generally speaking, it's going to be significantly location based, as in where is the item fulfilled from and where is the item delivered to. Then on a line-item level, we need to be able to delineate information about each line item, and each item that’s going to or being fulfilled from a different location, even if it’s within a single line item.

In other words, the same products with the same SKU might be fulfilled from a different location and delivered to a different location. These are all factors in documenting and dealing with the taxes and the customs duties and any other regulations there.

Product-Type Rules and Regulations for Product Fulfillment

There may be regulations that have to do with chemicals or dangerous chemicals, such as warning labels that have to be applied. There might be really heavy shipping that could be IP that the government doesn’t want made available to certain countries. These are all factors that may be legal requirements around documentation for certain medical devices or products, or other items.

These are all really important pieces of marketplace because the data associated with the marketplace, or the products that are sold, may not be coming directly from your company or organization. They might be fulfilled by external sellers or vendors that are engaging in this marketplace.

We need to be able to add scale, identify when there might be risks, and when there might be products that we need to address issues with for the customs, taxes, duties, and VAT. And we need to get the correct information for those.

Integrations for Shipping Process Data

Fundamentally, one of the things that we recommend for this is being able to pull the base data that the entire marketplace is going to use from a single source of truth. This can be a third-party SaaS integration with the vendor like Avalara, or TaxJar or some of the other vendors that are out there.

It might also make sense to pull the data from an ERP or CRM integration where that tax data lives in a central location for the entire marketplace. Then, if it's determined that the tax rates need to be updated, they can be updated in a single location and then propagated out through the entire system.

It's critical to report appropriately for the tax authorities to make tax payments, submit tax documents, and similarly for customs and duties. This can be cumbersome at best when operating at scale, especially if there are various vendors who are drop shipping, or if they are shipping their inventory to a distribution center.

There can be details that apply to the taxes with regards to these warehouses and shipping distribution centers. Ultimately, this logistical overhead that is part and parcel with scaling a marketplace is absolutely critical to properly adhering to the legalities of keeping the business gainfully moving ahead.

Customs, Duties, and Taxes Management for the Shipping Process

One of the things that we do whenever we complete a marketplace integration for customs, duties, and taxes, is that during the discovery phase we’ll ask these questions and we encourage you to think about what the ideal scenario would be for your organization, or if you don’t know, just go ahead and ask and make that a point in the discovery that we need to cover.

Typically, this is going to be part of our checklist or steps of items to complete during discovery. It’s going to depend on your internal infrastructure and where the liability for the customs and duties and taxes are going to live, and in some marketplaces that essentially gets offloaded to the vendors to the sellers.

Generally, though, that's something that the marketplace itself needs to be able to manage and operate as a centralized submission of the customs, duties, and taxes. They have specific forms and for customs and duties in particular.

These are logistical issues that if they don't get completed properly, the shipments can get held up, and if the taxes aren't completed properly there can be penalties and interest. Therefore, these are absolutely critical items and most clients that are already operating at some level of scale are already dealing with this. They probably already have an ERP system or some accounting system that's handling parts of this, if not all of it. 

Automated Integrations for Shipping Process Management

One of the biggest things that we will do and will recommend is incorporate automated integration to your ERP system or CRM system, or a third-party provider like Avalara or TaxJar.

In addition to these integrations, there are also situations where the shipping gets split out, and the region we’re dealing with has specific rules. It may be necessary to go through a really robust process for certain product types, for example, like really sensitive chemicals or certain IP that the government is protecting from export.

These are things we can also incorporate into our tax provider and our customs, duties, and shipping provider, where we’re incorporating additional checks to see if a country that we’re shipping to is on the banned country list. Then we need to see if we need to provide a message to the user for that particular item and let them know that an item is banned in the country indicated for shipping.

We may want to flag that IP so that if they save their shipping to another country then they'll just go and pick it up and take it over. Or they might have it forwarded or something of that nature. We need to make sure that we have a log of those things, to manage the customs, duties, and other legalities of certain product types.

Similarly, for prescriptions and other medical devices, these might be particularly challenging to regulate within the marketplace if we're not tying back to a central source of what are banned items and what are banned countries, and what medical products need a certain level of authorization from the government, medical system, or doctor to purchase a certain product.

Some medical products might be eligible for a significant discount from Medicare or Medicaid, so we need to know that as well to act accordingly.

These are aspects that we recommend, including integrations for customs, duties, and taxes, as well as additional business rules because they tend to be related to where the items are from and where they are going. This logic needs to tie into those physical components of each line item, and possibly the splitting of those line items to different locations.

Integrations for Customs Shipping

The other thing to consider is the overall process of dealing with customs, duties, and taxes. Ideally, it will be seamless with showing the user the information, pricing, and lead time impact. It should also be able to auto-generate the forms, and print the customs and duties labels and forms, as well as shipping information that's tied into that. It should also be able to get accurate quotes to tie into these things.

We need to be able to integrate with ERP or with a third-party provider, like Avalara or Texture, to make sure that we have up-to-date forms and data that we're sending out to the integrated ERP or the SaaS provider for taxes. Then they can prepare all the appropriate forms at month’s end or quarter’s end, depending on the reporting period for different required reports.

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• Considerations for RMAs in eCommerce Marketplace
• Building an International Marketplace Business Model
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• eMarket Integrations: Warehousing & Inventory Strategy