When you have to order in the products you’re going to sell on Amazon, there are a lot of things to consider. Just one of those is how you’re going to get the product shipped to you.
Many Amazon sellers (and Forecastly clients) sell products which they import from overseas, allowing them access to a range of options and competitive pricing. Finding the right product and supplier is a big deal, but now you’ve got to ship it and hope that you avoid any of the many things that can go wrong during the shipping process.
It’s a bit of a balancing act figuring out whether you will go with air or sea freight, as there are pros and cons for each. Here we’re looking at some of the considerations to weigh up when making your decision:
Check that you can import the product
Drop everything. Before you even consider shipping, you’ve got to do a bit of homework on the product itself first. The first question you need an answer to is, can I actually import this product?
The import process is a complex one with various rules and regulations attached. In fact, a number of imports are refused by FDA or other agencies – in January 2018 alone, the FDA made 97 refusals. Refusals may be for any of a number of reasons such as:
- The product itself is banned.
- The product is deemed to be counterfeit.
- The product is deemed to be unsafe.
- The product contains elements that are prohibited (be careful with cosmetics or supplements).
- There is a trade embargo with the country of origin.
FDA, Customs, USDA or other agencies also get involved, depending on what the import is and can refuse entry. While an importer always has a right to appeal and present evidence as to why they feel the product should be allowed, if you lose the appeal, the product has to be exported away from the US or destroyed within 90 days. Ouch!
The Small Business Administration provides some great resources to help you figure out what the deal is with importing your chosen product. You’ll also want to be careful to look into things like tariffs and other fees involved. Some products attract such hefty tariffs that you’ll find they’re not worth importing.
It can be challenging to find the most up-to-date information, as tariffs and fees are often changed. Import companies often don’t want to give specifics in case those are wrong, but I have had some success through having contacts within the relevant government agencies. As long as you’re not hammering them with questions on the daily, they don’t seem to mind providing this information. Of course, you can search for yourself online, however, it’s not always clear from the information on government websites.
The word “margin” is often on an Amazon seller’s mind, so cost is an important consideration at play. When it comes to shipping, cost is a juggling act between the weight and the size of the shipment.
If you’re going for air freight, typically an airline will charge using a chargeable weight formula, which is based on the weight and size of the shipment. This means that even if your shipment is relatively lightweight, if it takes up significant volume you can still be faced with a significant charge. Of course, you will also pay more for things that are small, but heavy.
With sea freight, you’re looking at either a partial container load (LCL), where your goods are consolidated into a container with other shipments, or a full container load (FCL) where you pay by the size of your container. The two standard formats for FCL are 20-foot or 40-foot containers, although there may be others available if you ask.
If you have an LCL shipment, you usually pay based on the volume of your shipment in cubic meters. This means that you could have quite a heavy load, but if it was a small volume, you’ll pay much less than air freight.
Another consideration is warehousing charges at the port of destination. When your shipment comes in, whether by air or sea, it will be offloaded and stored until it is approved by inspectors. This can take several days, even a week or two, particularly if there is something there which requires additional approval. While your shipment sits, it accumulates storage charges. These charges vary according to the port, so it’s worth finding out – sometimes a warehouse at an airport might be cheaper than a shipping port.
Following clearance of your shipment, it needs to be picked up and transferred to wherever you need it. For most people, this means using a trucking company to transport the shipment. The cost of this from each port should be a consideration too. At times they face higher charges to access and pick up the shipment at some ports than others, which are passed onto you. Then there are their charges for cartage to the destination.
To sum all of this up, a larger, heavier shipment will definitely be cheaper via sea freight, but as the volume and weight of your shipment gets smaller, the difference between the two can be negligible – sometimes air freight even works out cheaper. The best thing to do is to get detailed quotes for both options, taking into account those storage and transportation charges from the port as well.
Speed and reliability
You’re probably aware that air freight is much faster than sea freight. Standard air freight will get your products to you in 8 – 10 days, while the more expensive express air can deliver in less than a week.
Sea freight tends to take 4 – 6 weeks to reach you, meaning that you have to be much more organized in terms of your inventory management. If you’re in a hurry and don’t want to pay air freight prices, check with your freight forwarder as to whether they offer expedited freight. Only some offer this service, which is a streamlined process for getting your goods to faster ocean and trucking services. You will of course, pay more than regular shipping.
In terms of reliability, air freight is the most consistent in terms of getting your goods to you within an acceptable window. When a plane is held up due to weather, it can usually leave within a day or two. In the case of ships however, you might be trying to catch one that is only available once per week, or even per fortnight. If something happened and your shipment didn’t get loaded on time, you can experience significant delays.
Another issue that is surprisingly common with ships (to the tune of thousands of containers per year), is containers going overboard and being lost at sea. You’re unlikely to have a similar issue with an airline!
Type of goods being shipped
Some types of goods are prohibited from being transported by air freight, so this is definitely a consideration. The list of banned items is quite long and varies between countries and airline regulations. Freightos provides a list of items that are generally prohibited:
- Gases (e.g. lamp bulbs)
- All things flammable (e.g. perfume)
- Toxic or corrosive items (e.g. batteries)
- Magnetic substances (e.g. speakers)
- Public health risks (e.g. untanned hides)
- Oxidizers and biochemical products (e.g. chemical medicines)
- Anything with a danger sign on the packaging.
If your products answer to any of these descriptions, you will have no other option but to go with sea freight.
This final consideration is something that has become a more prominent issue over the last few years – our impact on the environment. Transporting goods over a distance always produces some sort of carbon footprint, so depending on your personal stance, this may be a consideration.
According to studies, shipping by sea will always have a lower carbon footprint than shipping by air over the same distance:
“A Defra study concludes that 2 tonnes of freight carried for 5,000km by a small container ship creates 150kg of CO2e (a measure of relative global warming potential) compared to 6,605kg of CO2e if the freight is carried by plane for the same distance.”
This may change with advances in technology, but for now, shipping by sea wins the smaller footprint.
Choosing your shipping method is really a balancing act between the factors discussed. Do you want fast and expensive? Slower and cheaper? Or, the slowest and cheapest?
You’ve also got to weigh up whether you can afford any delays, whether the product can, in fact, be shipped and imported, and any other potential factors that are important to you.
We usually find there’s a point where there is little difference between the two, depending on the size and weight of your shipment. For this reason, it’s worth doing some homework – get multiple quotes based on different load sizes and see how they compare.
What will be your final choice?