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A Thai SME guide to international shipping: All you need to know

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A Thai SME guide to international shipping: All you need to know

Thailand has a huge e-commerce market with an annual growth rate expectancy of 11.31% between 2023-2027, as Statista reports. Seeing the gradual rise of e-commerce globally, small and medium-sized enterprises (SMEs) in Thailand have great potential to compete in their respective industry and even expand their business. All they need is the right information and tools to get started. 

If you’re an SME business owner in Thailand trying to get your foot in the door with e-commerce, we’re here to give you all you need to know about shipping overseas, from why you should consider it and what you need to consider when starting.

1. The importance of shipping internationally for Thai SMEs

Expanding your business beyond Thailand's borders offers small and medium-sized businesses many advantages. Here are some key reasons why shipping in the international market is essential for Thai SMEs:

a. Access to new markets

By venturing into international markets, you can tap into a larger customer base and target niche segments with a higher demand for your products or services. Exploring new markets can increase sales and revenue growth, providing a sustainable competitive advantage.

b. Diversification and risk management

Shipping overseas allows Thai SMEs to reduce dependence on a single market. Diversifying your customer base across different countries can help mitigate risks associated with economic downturns or fluctuations in the local market.

c. Innovation and learning opportunities

Shipping internationally exposes you to diverse cultures, trends, and customer preferences. By interacting with international markets, you gain insights into new ideas, innovative approaches, and emerging trends. This exposure fosters learning opportunities for you to adapt your products or services to meet the evolving demands of a global customer base. Embracing innovation and staying ahead of the curve can contribute to the long-term success and sustainability of your business.

d. Increased brand visibility

Venturing into the global market provides an excellent opportunity to showcase your brand to a wider audience. By delivering your products to customers in different countries, you can raise brand awareness, gain credibility, and establish yourself as a reputable global player.

 e. Growth and scalability

International expansion opens doors to exponential growth and scalability. As your business progresses by meeting the demands of the overseas market, you have the potential to gain access to new resources, talent, and partnerships that will help take your business to the next level. Collaborating with international suppliers, distributors, or strategic partners can contribute to the scalability of your business and provide unique opportunities for it to adapt and thrive in diverse markets.

2. Essential factors Thai SMEs should consider when shipping overseas

While shipping your goods to the international market offers immense benefits, you must consider several factors to ensure smooth and successful operations. 

a. Different customs regulations

When shipping overseas, you must be familiar and up to date with Thailand’s export regulations and the import regulations of your target country. You must be aware of all the documents required by your courier and customs, tariffs or taxes, and goods that are prohibited and restricted for export in Thailand and import in your target country.

Supporting documents 

Before giving your products to your international shipping partner for export, you need to have the supporting documents to get your package moving through the network and to its destination. These supporting documents include transport labels, customs invoices, and permits from relevant issuing authorities if you plan to export restricted goods.

The transport label contains all the information your shipping partner will need to seamlessly deliver your package to your recipient overseas. The details required in your transport label include your business address and receiver’s address and contact information, a full description of the shipment contents, the number of packages or pieces in the shipment, and the total weight and dimensions of the package. 

On the other hand, customs invoices are used to declare essential information to customs authorities for clearance purposes. There are two types of customs invoices — commercial invoice, which is used when the items for export are part of a transaction, and proforma invoice, which is for items that are gifts or return shipments. The information you provide in your customs invoice helps authorities determine the applicable duties and tasks, perform risk assessment, and other relevant procedures. Some information includes but is not limited to your business address, the address of the recipient, breakdown of transaction cost, and reason for export. 

Documents required for the import process will depend on the target country. For example, if you are shipping to China, they require additional specialised documents, including an import quota certificate, import licence, inspection certificate and other safety or quality licences.

Tariffs and taxes

Once the item reaches the target country’s customs, the goods are subject to customs duty, which is a tariff or tax imposed on goods when transported across international borders. The tariff rate of goods is determined by the commodity code labelled on the shipping documents, commercial invoices, and packaging lists. 

This commodity code is based on the Harmonised System Code (HS) or ASEAN Harmonised Tariff Nomenclature (AHTN). The HS is a six-digit commodity code for goods authored by the World Customs Organization (WCO), which classifies products based on their usage, function, and measurement. This code is used if you’re exporting your goods to non-ASEAN countries. If you’re exporting goods to a country that is an ASEAN member, then you must use AHTN, which uses an eight-digit code instead of six. 

When labelling, it’s critical to be mindful of using the right HS or AHTN code. Should there be an overlap in the classification of codes because your product can be applied to two, then choose one that is the closest possible match. Keep in mind that using the wrong commodity code for your goods can result in the miscalculation of customs duties or even rejection of entry into the target country. 

Typically, customs duties and taxes are paid by the receiver or customer since they are levied by customs in the destination country. As such, your business must also take this into account when developing a pricing strategy for your goods.

Prohibited and restricted items

Each country has its own list of prohibited items that cannot be shipped and restricted items, which may require a thorough assessment by different issuing authorities. Therefore, you should be aware of the items that are restricted and prohibited from being exported from Thailand and imported to your target country before shipping them. 

Particularly, Thailand restricts the export of plants and their parts, food, medicine, and cosmetics, among others. You will need the proper documents from its issuing authorities to have your goods shipped overseas if they fall under the restricted goods category. For example, if you export food, medicine, and cosmetics, you need a permit from Thailand Food and Drug Administration, or for plants and their parts, you must get one from the Department of Agriculture. Additionally, the items that you are prohibited from exporting include narcotics, obscene materials, counterfeit trademark goods, and reserved animals or CITES-listed wildlife. 

In most countries, there’s an import restriction on antiques and works of art, alcoholic beverages, watches and jewellery, as well as commemorative coins and medals. On the other hand, the most common prohibited items for import include currency, animals, counterfeit goods, hazardous materials, and explicit materials.

b. Best practices for packaging different types of products for shipping

Packaging plays a crucial role in the safe and secure shipping of your products. Different types of items require specific packaging considerations to protect them from damage during transit. Fragile items and electronics, for example, need adequate cushioning and protection to avoid breakage. As such, you will need bubble wrap, foam inserts, or packing peanuts to create a protective layer around the item before placing it in a sturdy box. You must also label the package as “Fragile” to alert handlers and ensure its safety when transferred. 

If you’re exporting snacks or dried foods, make sure that it’s packed in food-grade plastic bags or other packaging materials that can withstand the rigours of transportation. You will also need to use the appropriate cushioning materials, like bubble wrap or crumpled paper, when packing them in a sturdy box.

When shipping clothing internationally, have them packed neatly in plastic bags or clear polythene wrap to protect them from dirt, dust, and moisture. Place the items in corrugated boxes or mailers, ensuring they are well-sealed and adequately labelled. 

c. Shipping tools

Time is of the essence for small and medium-sized businesses. That’s why you need to partner with a courier that uses the latest shipping tools and solutions that can help you save time and even streamline your process. They should be able to provide you with a user-friendly platform where you can manage your shipments, track your packages, and get your shipping insights right away. And most importantly, they must give you the best possible option to ensure safe and efficient deliveries to your customers in other countries. By partnering with an international shipping company that can provide you with these tools and solutions, you can optimise shipping operations, focus on other core projects in your business, and promote better customer satisfaction in the long run. 

Grow your small business by shipping overseas with DHL Express

Choosing the right logistics partner is vital for successful international shipping. Therefore, if you plan to expand your small or medium-sized business globally, then you should choose a trusted delivery service provider like DHL Express. With our extensive network and advanced shipping capabilities, we guarantee efficient and reliable services, delivering your goods to your customers overseas. Our expertise in international shipping gives your business access to tools and solutions unlike any other, allowing you to streamline your international logistics operations and enhance customer satisfaction. We cover over 220 countries globally and offer desirable rates that would definitely be a game-changer for your SME in Thailand.

Open a DHL business account today, and start growing your business by venturing into the international market.