Implications of doing business overseas
August 4, 2009 by MindanaoBob
Filed under Feature, My New Journey
OK, as most of my readers would already know, I am an American, but I live in the Philippines. That’s not what this site is all about, but living in a different country can also have implications when selling things online, especially on eBay. And these things apply no matter where you are selling from, if you plan to sell to buyers in other countries.
As I pointed out in an early article, I plan to sell merchandise on eBay and other online auctions using a “two pronged approach.” Firstly, I am going to sell items from here in the Philippines on eBay.com, the US site, aiming at US buyers. The second prong is that I intend to purchase some goods from the USA (or other countries) and sell them on eBay.ph, aiming those products toward Philippine based buyers.
As an American living in the Philippines, I have an advantage doing this for two reasons:
- Having lived 38 years in the USA, I know what is available there, and what is not. I know what stuff costs there. Sometimes I see things for sale here which would be a huge bargain in the States, or are not even widely available in the States. So, I can buy things from the States that are needed here, and I can buy things from here that are expensive there.
- Having lived nearly 10 years in the Philippines, I know what things are available and not available here. I know of certain things that I wish I could get from the States. If it is something that I want to get a hold of, there must be others in this country of 90 Million people who also want to get it.
So, using these two advantages, I should be able to do nicely on eBay or other venues on the net.
There are implications, though.
Yes, there are things to keep in mind, if you plan to sell cross-border. Somebody asked me in an earlier comment about customs taxes and such. OK, let’s look at that.
I used to sell extensively on eBay from the Philippines, almost exclusively to American customers, so I have a lot of experience when it comes to customs.
There are basically two things you need to do if you are selling across borders:
- For every package you ship containing merchandise, if you are shipping it across borders, you will need to fill out a customs declaration form. Don’t be scared by this. It is actually very easy to do. For Philippine Customs, we just have a small green piece of paper to fill out. The only thing you have to do is list the contents of the package. Nothing complicated, just one or two words describing what is in the box. Be truthful, don’t try to hide something, it will only lead to trouble for you. If a buyer asks you to under-declare the value of the item, don’t do that.
- When you write up the item description for your listing on eBay (or wherever you are selling) explain that you are shipping from the Philippines (or whatever country you are shipping from), and that the buyer is responsible for all customs fees. Fact is that when you ship the items, you don’t have any idea how much customs will be (that is charged on the buyer’s end, not yours), or even if customs duties will even be charged. Truth is that I have shipped thousands of items to the USA from the Philippines, and I am only aware of two times when customs was charged on the deliveries. So, honestly, it is not a big concern.
If you are shipping big commercial quantities of items, that is when the customs people will start tagging on a percentage. If you are shipping small quantities for personal use, it is rare that any duties are charged at all.
Cross border selling can be rewarding, and also add a new dimension to your business. It is something that I recommend highly.
About the Author: Bob Martin is an Internet Entrepreneur living in Davao City, Philippines. Bob is an American, but has lived in the Philippines for about a decade now. Bob got started in the Online Auction business in the early days of the Internet, selling on eBay while it was still in it's infancy.
MindanaoBob
Hi Bob – This is soemthing I am VERY interested in doing. Specifically, this revolves around my undergraduate degree, so I am eager to test the waters. Not sure if I mentioned during my first trip to Davao, but I was also on my way to attend 2 trade shows in Hong Kong. The trade shows were extremely helpful, but I was overwhelmed with possible items for my business. So once I got back to the states, I had to re-focus my product sourcing. Now on my return to the Philippines, I need to research as you mentioned for products applicable to both U.S. and Philippine markets.
Hi Henry – I do remember you mentioning to me that you were attending some trade shows in Hong Kong. I believe that you can do well by searching out new products and new suppliers at such shows.
Interesting.
At the beginning of this year I listed some books on eBay and I did pretty good vis a vis sales. I am an antiquarian book dealer.
I had a notion of maybe moving to the Philippines and I thought to experiment with eBay. The logistics of shipping are a little formidable in my view; that is, the cost of sending a book via Fedex, UPS or DHL to the USA or Europe is expensive and it would also be very expensive for me to source inventory as I would have to have all my books shipped to the Philippines.
I am still in the investigative stages and I have not abandoned the idea of selling books from the Philippines.
Best
Jody
Hi Jody – Depending on the value of the books involved, you might consider some other alternative shipping methods. I have had very good luck with PhilPost (Philippine Post Office) Registered Mail Service.
Bob, Thank you for your kind reply.
It seems to me that speed and safety are the two critical elements necessary for shipping antiquarian books. In my opinion I would not be able to achieve either of these two factors using PhilPost after doing about two dozen test mailings from different parts of Luzon.
My only solution is to deal in truly expensive books where shipping is simply not a factor. Where there is a will, there is a way.
On the subject of auctions there is a wonderful auction being held in Ireland by Dell as they are shutting down a major production plant and moving to Poland. I have some friends from the Philippines here in NYC who are going to attend and I am mulling whether to go over myself. I guess this auction will end up with most lots going for a few cents on the dollar.
Best
Jody
Hi Jody – I certainly understand that. If you are dealing with books of higher value, you are certainly right to go for a higher priced courier service.
Hi Bob
I hope you don’t mind a little competition as I will be attempting to do the same very soon. Also on Jody’s question, in my ebay auctions I always have the buyer pay the shipping. It may cut down on sales for stuff coming from the Philippines but I believe that you will get such bargains that adding in the shipping will still get the item to the buyer for less than it would cost overseas. Believe me I have carried stuff home in suitcases and sold it on ebay.com and got 2-3 times the price I paid.
Hi Dan – Welcome! Of course, I am happy that you have decided to sell on eBay. It is such a big marketplace that we really won’t be competing!
Regarding Jody, yes, I agree that buyer should pay shipping. I think that, that what Jody was saying was that expensive shipping options for rare books might scare buyers away from buying. I do, though, think there are solutions for that.
I am an American living in the Philippines for some years and always looking for new business opportunities. I was wondering, Bob, if you have ever explored selling cigarettes by mail? As you know the cost of smokes is significantly less in the Phils than in the US, and it seems to me that there could be many eager customers. The hurdles would be to find enough steady, regular customers to make a good income on it, and to legally overcome the customs limitations somehow, maybe by sending one carton at a time in several separate packages?
Have you explored this at all?
Hi Van – In March 2010, President Obama signed a new law into place called the “PACT Act” which stands for Prevent All Cigarette Trafficking. The new law, which takes place on July 1 bans all cigarette shipments through the mail system. So, in just a few more days, it will be illegal to send cigarettes through the mail at all.
Before this act, you could legally send one carton of cigarettes at a time through the mail, but no longer.
Thanks for that information. I was not aware of that new law at all, how do you find out about these things?
It is, to me, a bit sad that with all the serious problems in the US right now, Obama is wasting his time on banning smokes from being sent in the mail, isn’t there some other problems a little more pressing?
By the way, I am a writer and I would be interested to write for one or more of your websites.
Hi Van – How do I know this stuff? It’s my job to know it!
Just kidding. Actually, I have been thinking of getting into the cigarette business for about 5 or 6 years now. I recently started researching it and found out about the law.
If you are interested in doing some writing on one of my sites, you would be welcome to do so. Any certain site have particular interest for you?
Can you email me directly?
Just sent you an e-mail, Van.