Section 1: Getting Started

Identifying your market and products

Here’s where you’re going to have to perform your own research. Nobody is an expert in everything and hopefully, you’re looking to apply your experience and expertise into a market sector and product that you truly understand. If you don’t yet know what you’re going to sell or make, then stop reading right now and go and sort that out first! My advice is to “stick to what you know”. Leverage your experience and your knowledge rather than try to enter a completely new market without any. This will give you an immediate advantage.

Once you think you’ve got your product ready and sorted, then consider who your customer will be. Where are they located and how are you going to reach them? You can study your competitors, find out where they operate and what their market share is like. Study their strengths and weaknesses and try to find gaps you can fill. Government websites have a wealth of statistics and it’s worth utilising this data to understand potential in various regions. You should also ensure you understand your potential customers and how they’re likely to buy. Will they buy in person, through a retailer, direct from your website or will they need a consultation, perhaps over the phone or via an AI agent trained to make an assessment?

All of these points need to be covered off if you’re to understand what your business will look like. (links to www.ons.gov.uk, www.uktradeinfo.com, www.great.gov.uk, www.wto.org)

Understanding customs classifications and tariffs

As mentioned before, exporting your product will expand your reach and potential profits, but it can seem daunting and difficult to understand if you’re just starting out. You will have to make a cup of tea and pay attention to this next part though, as if you don’t, your profit can easily be eroded by… yes, the Tax Man. When you’re importing or exporting outside of the UK, you don’t charge VAT on the export, nor should your suppliers charge you their local equivalent of VAT to supply you with raw materials or finished products. The tax is worked out as the goods pass through customs control, and this is where customs classification (known as HS codes or Tariff Codes) comes into play.

The World Trade Organisation started a global club many years ago with the aim to get as many countries as possible to work off one set of universal codes. Each of these codes essentially classifies, in an extremely granular fashion, a single type of product or raw material. They then attach to this classification the rules that apply, from how much tax and duty to charge, to restrictions, quotas and caveats. This means that choosing a code for your product to be exported or imported under can have significant tax implications. In the rare instance you can’t classify your product (you’ve invented a new type of chemical, for example), you should seek out a binding tariff agreement with HMRC. This would then guarantee your products wouldn’t be reassessed under any other classification and you’d be able to budget for the taxes and duties due.

ParcelBroker has created a very handy tariff classification tool using AI, which you can access during the booking process. You’ve got to remember that when sourcing from overseas, your suppliers should not be charging you any of their local taxes (equivalent to VAT), and when selling and exporting overseas, you should not be applying any VAT to the exports in general. Once you’ve classified your product using the ParcelBroker tool, you can head over to the trade tariff (link to https://www.gov.uk/trade-tariff) and find out what duty and VAT will be due on your imports. Exports are a little more difficult to work out, but this should really be the responsibility of the buyer. If the buyer is a consumer or private individual, then there are a few other options available to mitigate this requirement, like IOSS (link to https://help.parcelbroker.co.uk/hc/en-gb/articles/4403259801105-What-is-the-IOSS-Import-One-Stop-Shop-EU-VAT-Scheme-and-who-needs-to-use-it), or sending DDP (you pay the tax and duty and collect this up front from the buyer).

Sourcing reliable suppliers and partners overseas

Sourcing reliable suppliers is a tough one. With the advent of Alibaba and fraud on the rise, ensuring you don’t send thousands of your hard-earned pounds into the ether, never to be seen again, is pretty darn important. My first recommendation, if you can afford to, is to attend trade shows, visit manufacturers in person, see and test their products, and reassure yourself that they ARE the manufacturer and not just a middleman or broker (many of these exist, and make you feel like you’re dealing with a factory, when in fact they are just putting a margin on to a product you could have sourced cheaper).

If a visit in person isn’t feasible, then you can look at trade fair and exhibitor lists on websites. Most of these will display the attendees. You can get a feel for the size of the company by the size of the stand they take too. If you already have contacts in the sourcing country, then utilise them and have them help you qualify manufacturers. Finally, if you must, perform your due diligence using paper trails and audits. Check if they have any quality or industry certifications, try and find independent reviews, or request customer references or testimonials from other buyers in your country.

Start small: order samples, parcel, then increase to a pallet, then containers. It may be slightly more uneconomical, but it’s going to be safer to pay a little more in shipping to start, knowing you can ship more economically later, rather than losing a huge payment for product that won’t arrive.

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Section 2: Regulatory Considerations

Necessary documentation (e.g., commercial invoices, packing lists, certificates of origin)

So now you’ve found a factory and your products are ready to import (oh, and make sure you’ve registered for an EORI here: www.gov.uk/eori — more about EORI numbers here).

In preparation for their transport, you’re going to need a commercial invoice, which contains information about the product you’re purchasing, the price paid, and the seller and buyer details.

A packing list is not mandatory for all shipping methods, but if you’re planning to go for a slow and cheap sea freight service (more on this later as it’s not always the cheapest!), then a packing list is normally expected. This provides line-by-line information on the product’s individual size, net and gross weights, and how many units are in how many parcels. It should always give a total net and gross weight and a total volumetric or cubic meterage (essentially size). This ensures the correct space is booked for your transport of choice.

A Certificate of Origin (COO) is an official document that certifies the country in which your goods were manufactured or produced. It’s usually issued by a chamber of commerce in the exporting country and is used in the destination country to determine whether the goods are eligible for preferential duty rates under a free trade agreement, or to assess import restrictions.

Overview of Incoterms and their importance

Incoterms tell everyone involved in your shipment who’s responsible for what, and when.

The most common Incoterms for importing are:

• EXW (Ex Works)
• FOB (Free On Board) – for sea freight
• FCA (Free Carrier) – for air freight

EXW means you’re responsible for arranging transport from the factory, including export customs clearance. This is common with express courier shipping, ideal for samples or small quantities. Ironically, small sea freight shipments can be more expensive than air express due to the way sea freight charges minimums and handles processing.

FOB/FCA both mean the supplier gets the goods to a port or airport agent and handles export customs. You then pay for shipping, clearance, duty, and delivery. It’s known as “port to door” shipping.

The benefit here is that your factory likely has local logistics solutions — agents, brokers, maybe even their own vehicles — which can make their part of the job cheaper or more efficient.

Always check your invoice. If it says EXW, you’re responsible for most of the journey. If it says FOB/FCA, their responsibility ends at port. This affects shipping costs and your profit margins.

💡 TIP: If they’ve quoted you FOB/FCA but you're shipping small and using air express instead, negotiate — you’re reducing their work!

Section 3: Transport and Logistics

Choosing the right mode of transport (air, sea, road, rail)

Choosing the right mode of transport (air, sea, road, rail) Generally speaking, for bulky orders from overseas (unless sourcing from Europe), you’ll want to use sea freight to get the best pricing. This works well for multiple cartons or anything around 1cbm (a pallet roughly 100x100x100cm) and upwards. Anything smaller than this, and it’s worth looking at air express (courier) or air freight. You can read more on the differences between the two here.

The reason is that there are minimum fixed processing fees for sea freight, and sending just a few small cartons can cost the same as sending a pallet!

If you’re sourcing from Europe, road transport is another good option. Bear in mind that products that can’t be stacked will always be more expensive to ship, so make sure your suppliers meet the criteria for stackable freight. You can read more here.

Rail is another option — there’s even a railway line run by DHL that goes all the way from China to Europe. Bear in mind, rail pricing usually sits somewhere between sea and air freight. The key is to quickly figure out your stock depletion levels, factory lead times, and transport times so you don’t run out of stock and end up paying premiums for faster transport. Running out of stock for a product in demand is definitely something to avoid.

Freight forwarding and logistics partners

Generally in the UK, most freight forwarders stick to larger shipments by road, air, or sea. ParcelBroker is unique in that we offer instant pricing via our quoting engines for anything from a document up to 16cbm of sea freight. We also offer full container and road haulage by price on application, making us a true one-stop shop.

Ultimately, you want a partner who is knowledgeable and has the experience to resolve issues as they arise. Look for someone with a long, successful trading history and a strong reputation with verified online reviews.

Understanding insurance coverage

Insurance cover for your product is important, and there are several ways to insure your goods while in transit. For low-value items, you may not need full insurance. Most express courier brokers like ParcelBroker offer in-house liability cover up to a small amount (e.g. £1000 in our case). However, always check the limits and exclusions of this cover — some products (e.g. jewellery, glass, or fragile items) may not be included.

If your product is excluded, or if your shipment exceeds the liability limit, you can usually get a bespoke insurance quote. This can even include high-value or fragile goods. If your shipment is over £1000 or you prefer to take out full insurance, speak to your preferred supplier or freight partner.

Be sure to read through the documents and confirm that your goods are fully covered — ask questions if anything is unclear. Your freight partner will usually have direct contact with the insurer and can help get you the answers you need.

And if you’re thinking of skipping insurance, don’t expect a payout if something goes wrong. Even worse, if you’re shipping by sea, you really should get cover for "general average". This is a maritime law principle where all cargo owners share the losses from a major event. Yes, that’s right — if the ship sinks (or crashes into the Brooklyn Bridge), you could be liable for a share of the damages, even if your goods weren’t affected!

Section 4: Customs Clearance

How customs processes work

So, your shiny products are on their way, the delivery date approaches… then you get an email requesting clearance information or a request for payment.

Customs processes vary depending on the transportation type and carriers used. In express courier shipments, the clearance process actually begins before the goods are picked up. Considering FedEx can overnight a parcel from the UK to the USA in just one day, the customs clearance process has to be fast. When booking an express shipment through our platform, we must capture certain data about your product (value, commodity description, weight, reason for export, etc.), and this is sent as data as soon as your booking is made. This can help customs clear the goods even before the parcel has reached the destination country.

For freight shipments, generally speaking, the import clearance happens once the goods have arrived into the destination. It’s a much slower process and you’ll usually be emailed with requests for clearance information and how you’d like to pay the duty and VAT. Express couriers generally have an automated process whereby the importer just receives an email and a link to pay. That brings us onto the next section:

Dealing with duties, VAT, and taxes

We’ll discuss how freight shipments work, as express is covered above (email with online link to pay). With freight, you’ll get a chance to decide who you want to handle the payment of the duties and tax. If you’re a regular shipper you may want to defer your import taxes and can apply for a deferment account number and pass this to your freight partner, but otherwise, generally (if you’re VAT registered), you should do it through postponed VAT accounting. This is the quickest and easiest method. You need to subscribe to the customs declaration service in your HMRC account here: https://www.tax.service.gov.uk/customs-enrolment-services/cds/subscribe.

This means that your import taxes will be applied to your next VAT return. No physical money has to be paid out of your bank, helping cash flow. The other option is to have your freight partner pay both the import taxes and any duties on your import; they would then recover these before delivery. You should remember though that there will be some disbursements for them having to handle the money and transactions (usually around 5% of the value).

Last thoughts

Conclusion

There are many other challenges which are product-specific, but this should give a broad overview of the main points to be aware of. A good freight and logistics partner will be able to offer guidance and assistance, but do try and ensure you have the basics covered prior to booking to speed things along.

Good luck on your journey to success. We wish you all the best in your endeavours. You can reach our team here, or get an instant quotation to begin your importing journey.

You can also explore our Pallet Delivery Guide for more information.

More from ParcelBroker

For more help with shipping parcels internationally you can browse our frequently asked questions (FAQs) and helpful shipping guides here.

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