After your manufacturing partner has finished making your label’s products, you’ll have to get them from the factory floor to your flagship stores, distribution center, or wholesale partners. However, before you ship internationally, there are a few key things you should know that might not be so obvious.
Read on to learn the most important things to pay attention to when shipping your label’s products internationally.
Do You Need an HS Code?
The short answer – yes.
You may have noticed 6 digit or more codes on your invoices or shipping labels These are known as HS Codes. An HS Code, otherwise known as a Harmonized System Code, is the internationally accepted labeling system to classify products for tariffs and import logistics. Regardless of where you send a shipment of products to or from, your products will have to use a predefined HS Code that carries the same definition of goods in any country.
HS Codes are generally nine digits in which the first two digits identify the chapter that the product falls under; the next two numbers define the heading, ie. where under the specified chapter the product falls. The remaining numbers break down the product into far more scrupulous definitions dependent on the specific conditions and changes that the product has gone through. However, the first four digits play the most important role in defining which category the products fall under.
These first four digits determine the tariff schedule that your products will have to follow when exiting or entering a country. Because of this, some companies choose to change the conditions of their products or leave them unchanged in order to reap the benefits of one tariff schedule over another. Likewise, when doing international trade, some companies may choose to conduct the next step of the product’s process in a different country in order to classify that product as that country’s product and reap the benefits of relevant free trade agreements.
Some of the top most used HS Codes for fashion products or supplies include:
Free Trade Agreements That Impact the Fashion Shipping
As mentioned before, sometimes you may need to ship from one country to another in order to most cost-effectively conduct the next steps in a production process or reroute shipments through different countries to reap benefits of free trade. This may seem counterintuitive and more expensive, but sometimes the tariff costs will make this the least expensive course of action.
To get through this, you should be mindful of what country your products ship from and to, as well as what free trade agreements apply to each. You can then have those products hop the globe to reap as many free shipping benefits as possible until they get to their final destination.
Some Notable Free Trade Agreements Around the World:
- AFTA | Association of Southeast Asian Nations Free Trade Agreement : Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand, Myanmar, Cambodia, Laos, Vietnam, China
- EU | European Union : Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden
- NAFTA | North American Free Trade Agreement : Canada, Mexico, USA
- APEC | Asian Pacific Economic Cooperation : Australia, Brunei Darussalam, Canada, Chile, China, Hong Kong, Indonesia, Japan, Republic of Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, Philippines, Russia, Singapore, Taipei, Thailand, USA, Viet Nam
- RCEP | Regional Comprehensive Economic Partnership : Australia, Brunei, Cambodia, China, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, South Korea, Thailand, and Vietnam
Regional Rules and Regulations That Affect Fashion Products
The last thing to keep in mind when shipping internationally are the rules and regulations of each country with which you interact. Some have strict policies on the types of products that can enter into the country or sell to the public. These policies can be in place for a variety of reasons like public safety, protection for the domestic economy, defense against foreign influence, and much more. It would be terrible to have your products ship thousands of miles overseas, just to stop at the border ahead of their final sales.
To get ahead of this issue, research foreign trade policies that could impact your sales targets, suppliers, and production partners prior to investing your capital. You should also be cognizant of any news or recent updates in policy and foreign interaction that might cause you to have to reroute your label’s shipments.
Shipping your products internationally should not scare you. It should be an exciting thing to spread your products to a larger audience and utilize a global network of skilled artisans and people. HS Codes, free trade agreements, and regional regulations are tools that sound intimidating, but when researched, can actually help you make the best use of your investment on fashion materials, production, and marketing. At the end of the day, the more time and effort you put into researching the shipping rules where you plan to ship from, through, or to,, the better you’ll be able to take advantage of the opportunities that using each wisely affords you.
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