Postal rates to Australia from the UK: e-commerce guide

Is it worth entering the Australian market?

As an e-commerce seller in the UK, a good way to increase your revenue and customer base is to sell internationally. Selling to the foreign market opens up new markets and opportunities for your e-commerce business. One of such international markets that you can tap into is the Asian-Pacific market, specifically Australia.

Australia has a vast economy as well as a strong infrastructure that makes it attractive for e-commerce sellers. Also the Australian population is experiencing an increased use of the internet and e-buying, which makes them an ideal e-commerce market.

In 2019, the Australian e-commerce profit was forecasted to reach US$27,248m in 2020. This means that there are plenty of opportunities for UK sellers to enter the Australian market. In recent years, online shopping in Australia has been experiencing incredible growth, and today about 70% of all Australians participate in some form of e-commerce or buy items online.¹

This article will show what you need to keep in mind when selling and shipping your goods to Australia. You need to be aware of any restrictions on goods that can be imported into Australia or any other legal restrictions. In addition, we also look at how you can save money when sending or receiving international payments from Australia with Wise.

What to Keep in Mind?

When selling to the Australian market from the UK, the following information can be proven vital to your e-commerce efforts.

● The use of mobile devices continues to grow in Australia every year. In 2015, mobile was at 84.5% and was predicted to reach 88.6% by the end of 2019. However, over 70% of the population still use laptop and desktop computers to access the internet. Therefore, you want to optimize your e-commerce store to handle both mobile and desktop browsing seamlessly.²

● Popular online purchases by Australians include electronics, fashion, furniture, technology, books, and computer equipment.

● Popular Australian online marketplaces are eBay, Amazon, Trade Me, ASOS, and GraysOnline.

Another thing you need to consider when exporting to Australia is that they have very strict regulations on products that can contaminate the natural ecosystem, or affect the country's agricultural environment. You can check out the full list of all the restricted and prohibited products from being imported to Australia.

When selling to the Australian market, you must make sure that the products are safe and meet the relevant safety standards. Your product should have clear instructions for proper use and include all the relevant warnings against possible misuse. This is especially important if you are the one manufacturing the product and not just supplying it.

The type and value of the products that you export to Australia can also incorporate costs such as customs duty, clearance fees, and goods & services tax. For more information on clearance payment and permits, you can check the Australian Border Force website.

The UK and Australia have signed a double taxation agreement that is meant to prevent any double tax liability from both the UK and Australian authorities over the same income. So, if your e-commerce business makes a profit from exports that are already taxed in Australia, it shouldn't be taxed in the UK any longer. You can apply zero-rated VAT to the sale of goods that were exported to Australia, once you provide evidence that the goods were exported.

If you are not knowledgeable about the international shipping procedures, it might be advisable to use a freight forwarder to move your goods. Freight forwarders usually have extensive knowledge of the documentation requirements, transportation cost regulations, and banking practices that are obtained in Australia. Luckily, most standard couriers will take care of this for you when shipping your goods to Australia. You can find a list of some of the top five couriers for shipping your goods from the UK to Australia below.

What Couriers can I use?

Here are some of the courier services that you can use to ship your products to Australia.³

Courier	Price Range	Time for Delivery	Track Shipment
Landmark	Drop off at Landmark Drop-shop - £89.27 Collection anytime during working hours - £89.52	3 - 6 working days (VAT Not charged)	Available
UPS	UPS Express - £80.87 UPS Express Saver - £78.94	1 -2 working days (VAT Not charged)	Available
Collect+ International	Dropped of their pickup point - £90.33	8 -13 working days (VAT Not charged)	Available
Parcel Force	Collected any time during working hours - £83.03 Collected before 11 am - £92.20	3 - 6 working days (VAT Not charged)	Available
DPD	Dropped at a drop point - £91.75 Collected by DPD - £93.62	3 - 6 working days (VAT Not charged)	Available

All prices are calculated with a parcel of 35cm X 35cm X 35cm and a weight of 5kg with Australia as the destination.

Sources: https://www.parcel2go.com/quotes?col=219&dest=1&mdd=0&p=1~5|35|35|35"etype=Default

How to save money on international payments?

When you transfer money abroad or receive international payments, most payment platforms charge a fee. However, what you do not know is that most of them also have a hidden markup on the exchange rate - that can sometimes rise to as high as 6%. This means that when paying or receiving money internationally, you can end up paying 6% more than you should when converting money from one currency to another.

The good news is that Wise can help you avoid receiving fees and hidden exchange rate mark-up. Wise does not add a currency exchange margin. This makes international payments on Wise much cheaper than most platforms.

Wise only charges a small, transparent fee that is shown upfront so that what you see is exactly what you get. What’s more, the borderless accounts means that you can open virtual accounts and hold money in over 28 different currencies. This is extremely convenient because you can receive payments from your customers in Australian Dollars, hold the money in your virtual bank account, and then transfer to your account in the U.K. only when you need to. And all that for a small, transparent fee, mid-market exchange rate and up to 19x cheaper than PayPal.

Start saving today with Wise

Sources:

1. Statista article - e-commerce Australia
2. Parcel2Go blog post
3. Parcel2Go price quotes