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September 10, 2021

Exporting overseas: selling clothes to Australia & New Zealand

By: Peter Gregory

Selling your clothes to consumers in Australia and New Zealand can make a lot of sense … even if you’re running a very small startup! But where do you start? What challenges do you need to think about when shipping goods halfway around the world?

In this guide we’ll explain why the Antipodes are worth considering, even if you’re still running a very small business! We’ll talk you through the pros and cons of selling to our friends down under.

The Pros and Cons of selling Down Under

Australia is 9,500 miles away from the UK. New Zealand is even further than that (11,500 miles)! For many British businesses, just the thought of posting something that far is intimidating.

There are certainly challenges that you need to be aware of when selling to customers half-way round the world, but there are some benefits, too. 

Good For Seasonal Wear Businesses

Down under, Winter is Summer and Summer is Winter! When you’re selling a product like ski or surf wear, the peaks and troughs in trade over a 12-month period can be quite stressful.

The great thing about selling to consumers in New Zealand and Australia is that their seasons are reversed. Buyers on the other side of the world are looking for exactly what you’re selling just as the market is going quiet here at home. This means that you can effectively get two selling seasons (two summers or two winters) out of the one year.

Everyone Speaks English 

Europe is a great market for British clothing businesses, but there are a lot of languages to consider, and translation apps can only take you so far. Australia and New Zealand are commonwealth nations where everyone already speaks English — you don’t need to rewrite your website just to make a sale. This is great if you’re a small team or a solopreneur and you don’t speak a lot of languages yourself.

Day is Night and Night is Day

One problem you’ll face when talking to customers in Australia or New Zealand is the time difference. Customer service emails might arrive at 2AM or 3AM in the morning our time, which is the middle of their day.

If customers are hopping mad and in need of a same-day response, the time difference can make things very stressful very quickly. There are a few solutions to this problem: you can either manage your customer’s expectations (for instance by promising a 24-48 hour email response time), or you can hire a virtual assistant service somewhere locally who can field calls for you. 

Customs Can Be Tricky

Brexit has reset the customs rulebook. You might have been able to sell your product VAT-free and customs duty-free back in 2019, but that doesn’t mean you can still do it today. Everything needs to be double-checked first.

You can technically look up all of the tariffs, codes and trade agreements yourself, but in our view it’s better to be cautious and ask an expert — especially if this is a brand new market for you. Customs compliance is a very technical area. If you make an incorrect or incomplete customs declaration, you could find that parcels could get stuck at the customs border, or — in the very worst case — you could end up facing serious civil penalties (including fines costing thousands of pounds, and/or a criminal conviction). 

Our advice to all of our customers is that if you want to ship a high volume of goods to New Zealand or Australia, talk to a customs broker first. A customs broker is an expert in customs rules and regulations. They know how to classify what it is that you are selling (all goods need a customs code called an HS Code). They will also be able to figure out what the origin of your goods are (most likely your customs origin is the UK, but it all depends on where your raw materials come from and how much manufacturing you actually do here in Britain). A broker can also check for any import quotas, tariff exemptions and other factors that could apply to your shipment. 

Customs brokers are experts who charge a fee for their time (just like an accountant or a solicitor). In our view it’s usually worth the money. The Gov.uk website has a full list of customs agents here.

Container Costs Are Outrageous

The costs of moving a shipping container from one side of the world to the other have skyrocketed over the past 18 months. A sea container voyage might have cost you £1,200 in 2019 — nowadays you could be quoted £20,000 or more.  

We knew that global shipping container availability would be a big problem for our industry in 2021, but we didn’t expect the problem to last this long (see our predictions for 2021). We’re into September at time of writing, and this problem is still affecting almost every medium & large business in the country.

Solutions to the Container Crisis:

We asked our customers about how they’re getting around the shipping container problem, and there are a few workarounds:

  • If you’re screen printing t-shirts, sweaters and so on, then you can work with a local screen printer in either Australia or New Zealand. For a fee, these companies can print your design onto blank garments in their own warehouse, then ship it out in your packaging on your behalf. It takes work to set this kind of deal up (and there’s a lot of trust involved), but it’s an arrangement that is working for some of our merchandising customers.
  • If you have already outsourced your manufacturing to southeast Asia (a mere 3,000 miles away from Australia!) then you may be able to save on shipping fees by sending goods direct from your factory. Your manufacturer may charge extra for this, and you will need to hire the services of a  local distributor or third-party reseller, but it’s much better for the planet (fewer tonnes of CO2 pumped into the atmosphere), and it’s much better for your customer (goods arrive faster).
  • If you’re sending goods individually, then the container cost issue won’t really affect you. Parcels sent via Royal Mail will travel by air to their destination in as little as 5 to 7 working days. Postage costs to cover a 9,500+ mile distance are obviously much higher than they would be if you were posting something within the UK, but it’s not as high as you might think. Just bear in mind that the cost of postage and insurance is included in your customs valuation calculations. The Royal Mail website has some great advice on their website — see Sending to Australia and Sending to New Zealand.

I hope this article gives you some food for thought! Australia and New Zealand are two friendly, English speaking markets with similar tastes to our own. What’s more, British-made goods are respected all over the world (just see our guide), so if you have an opportunity to make your business global, our advice is to go for it! 

Thanks for reading!

Pete

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