Being an Amazon FBA merchant entails a lot of logistics that are not immediately obvious to aspiring Amazon sellers. There’s more to selling on Amazon than just posting items for sale, especially if you want to earn a high profit. The key is identifying your market, providing solutions to their needs through your products, and finding reliable partners to help you in the rest of the processes. As eCommerce partners go, freight forwarders and customs brokers go unnoticed most of the time due in part to the behind-the-scenes nature of their work.
Freight forwarders and customs brokers are essential to Amazon FBA sellers using online arbitrage who source their goods overseas. International shipping can be a source of pain for eCommerce merchants who don’t have a logistics team or department to handle the supply chain operations.
A freight forwarder is an entity that facilitates the safe and smooth transport of cargo internationally. Shipping goods and products requires proper documentation, permits, and clearances to move from one country to another.
Exporters often hire freight forwarders to ship their goods from the manufacturing country. But depending on the contract or terms of sale, the importer or the buyer may be the one who arranges for a freight forwarder and customs broker to ship the products to the intended destination.
For Amazon FBA, freight forwarders are third-party service providers that deliver international products from the manufacturer in one country to an Amazon warehouse. Freight forwarding companies help Amazon sellers by handling all legal and logistical requirements in cargo transportation. Small to medium eCommerce businesses may not have the knowledge and expertise in export and import regulations and customs procedures, so hiring a freight forwarder and customs broker will be extremely useful.
Many freight forwarders also offer customs brokerage services. Because international cargo transport involves customs clearance, it’s reasonable that big forwarding firms also handle customs. However, customs brokers can also be a separate entity. Customs brokers have a more specific responsibility. They act as the liaison between an importer and a country’s customs department; they handle the required paperwork, duties, taxes, and other fees to help importers clear their products through customs.
In the US, brokers need to pass an exam and apply for a license to transact with Customs and partners as a customs broker. Customs brokers, by definition, can be individuals, partnerships, associations, or corporations as long as they’re duly licensed to act as agents for importers and exporters.
Given these definitions, freight forwarders can act as customs brokers or have access to such services, but customs brokers don’t necessarily assist in transporting cargo.
Freight forwarders use one or more modes of transportation to move cargo via land, air, and sea.
As Amazon FBA merchants, you can consider using a freight forwarding service if you import products from overseas. Regular parcel delivery services, such as UPS, can cost much more, especially for large, heavy, or bulky items.
A good rule of thumb is that anything less than 200 kilograms (150 kilograms if you want to be conservative) can be handled by standard courier services and is still cost-effective. For heavier cargo, engage the services of freight forwarders, as they’ll have better prices for more oversized parcels. This is true whether you plan on shipping by air or by sea. However, freight forwarders will always be your best bet if you ship by sea.
Using freight forwarders offers a lot of benefits for Amazon FBA sellers. Aside from the freight company handling all logistical preparations for shipping the cargo properly, you also won’t need to deal directly with customs officials for clearance. Another bonus is that many freight forwarders offer insurance to protect your goods in case of untoward incidents.
Many factors go into freight forwarding. Calculating the shipping cost depends on variables such as the agreed-upon Incoterms, product type, weight, volume, and distance, not to mention the corresponding duties and other customs fees that may also differ by product category.
Here are some commonly used shipping terms you should familiarize yourself with. Some of these are Incoterms, or International Commercial Terms, which refer to the terms of sale between sellers and buyers.
There are several steps involved in shipping goods internationally via freight forwarders. It’s good to be familiar with the shipping process to have a better idea when choosing the best forwarder to import your products for your Amazon business. There are also additional requirements when shipping to Amazon fulfillment centers, so ask freight forwarders if they have experience shipping for Amazon FBA merchants.
The first step is to get the products from the manufacturer’s factory or other point of origin to the freight forwarder’s warehouse. From there, the freight company prepares the products for shipment, undergoing export customs clearance. This also includes an item checkpoint, where the company inspects the products to ensure everything is in order and that the products to be shipped are not restricted by the destination country.
Once customs in the country of origin have cleared the shipment, the freight forwarder will load them onto the proper shipping vessels. Depending on the contract, this can be via land, air, or sea. The type of products to be shipped may also dictate the type of carrier to be used. For instance, food and pharmaceutical products may need temperature-controlled transportation.
Upon arrival at the destination port, authorities validate the cargo and check it against the documentation provided by the shipper. Customs officials will ensure that the goods meet the legal requirements for entry into the country and that any controlled commodities have the proper permits and paperwork. They may also charge duties depending on the product, which the freight forwarder or their customs broker will pay on your behalf at this point.
For shipment to Amazon’s fulfillment centers, products must be properly packed, labeled, and palletized according to Amazon regulations. Your goods need to have your shipment ID label, so Amazon knows how many products are in your shipment and that they belong to your account. Some freight forwarders have experience with shipments that will be sent to Amazon fulfillment centers; hiring them has clear advantages for a smoother delivery process.
Depending on your terms with the freight forwarder, you may need to arrange a separate 3PL service for transporting your goods from the port to an Amazon warehouse. Amazon Freight offers transport service for specific commodities that can be transported via dry van. For other product types that Amazon Freight doesn’t cover, you can enlist other 3PL couriers.
You can ask your freight forwarder if they offer options for service boundaries. The most common terms include:
These are just some of the best freight forwarders and customs brokers that can handle international shipments. Check them out for services you need or to request quotes.
Aside from Unicargo’s freight forwarding solutions, they have a dedicated team for FBA clients, having been part of Amazon’s solution provider network. Their experience with Amazon has led them to develop a special Amazon Prep service, making your supply chain process efficient and compliant with Amazon’s labeling and packaging guidelines.
Flexport offers logistics management and transportation services, including customs brokerage and trucking, air, and ocean freight. They also have fulfillment services for eCommerce businesses and trade management services, including cargo insurance.
M.E. Dey began as a customs brokerage firm but has since expanded to offer complete transportation and brokerage services globally. They provide services for export, logistics and freight forwarding, and domestic and courier services.
DHL is a well-known name in the logistics industry. Their freight forwarding division offers air, ocean, and domestic freight services, as well as customs brokerage.
We’ve given you four options for the best freight forwarders and customs brokers for your eCommerce business. There are many more freight companies that can serve your shipping needs. If you need help finding a good freight forwarder that will cater to your requirements, you can use Freightos, a digital platform that lets you easily compare prices and book shipments online with your selected freight forwarder. Choose the company that offers the best value for your money and can deliver according to these factors.
International shipping is an enormous undertaking, so you should look for a freight forwarding company with excellent industry experience. These companies will usually be highly regarded in the industry for their work.
A vast network is crucial for an international freight forwarder. You want a company with an extensive global network so that no matter where you source your Amazon products, you can rely on the company for your shipping and import needs.
As we explained earlier, customer brokers are different from freight forwarders. Look for freight forwarders who offer customs brokerage services or have partnerships with external customs brokers to make the clearance process quicker and smoother.
Protect yourself by insuring your goods. A lot can happen in transport, so insurance protects your cargo against loss or damage. Ask about insurance options from your freight forwarder.
Like any other business, freight forwarders need excellent customer service. Assess the quality of their communication from your first inquiry. Clear and timely responses from the company mean that they value their customers well, and you likely won’t have difficulty doing business with them. Communication is particularly crucial for tracking your shipments or for requesting special services.
Communication plus technology equals good tracking services. Advanced technology for real-time monitoring and tracking of your shipment can offer you more peace of mind.
Because of the many factors in pricing, you’ll get different estimates with every shipment. Review the quotes you get from your freight forwarder; check if they are upfront with fees, duties, and taxes and if everything is explained clearly.
There are a lot of legalities in the shipping industry. Ensure that your freight forwarder is knowledgeable on import and export laws in the countries in which they operate, as well as customs regulations for those that offer customs brokerage services.
Aside from customs brokerage, freight forwarders sometimes offer special services, such as shipments specifically for Amazon sellers and handling cargo with special transport requirements.
Amazon’s competitive marketplace constantly pushes sellers to look for profitable products. These products may be manufactured anywhere in the world, so a freight forwarder and customs broker will be one of your essential partners in leveling up your Amazon store. Aside from shipping partners, you can streamline your efforts at product research, pricing, and inventory with tools from developers like Threecolts, Jungle Scout, and Helium10. As an eCommerce entrepreneur, don’t waste your time with tasks that can easily be automated or done with advanced AI tools built for Amazon sellers. In particular, check out Threecolts’ Tactical Arbitrage for product sourcing and SmartRepricer for profit maximization.