An important detail to consider before selling in Japan is shipping. Two main options exist when it comes to how you plan to fulfill orders.
The first option is cross-border shipping. Products take a much less direct route to customers this way and will take significantly longer to arrive. Orders received in this manner must be sent out through an international courier service.
They would then beprocessed by an international courier service agency and sent through Japan Customs. Once Japan Customs grants an import permit on the shipment, it would be passed off to a Japanese courier for last-mile delivery.
When an item is shipped this way, a customs broker may handle things like putting the shipment through customs and paying any required customs duty on behalf of the company; the company is then required to pay this broker anything owed.
However, this is all typically handled by a logistics company, of which would have been set up previously. If you choose an international courier service, you will not need to worry about a customs broker.
The other option is in-country warehousing. In this example, products are stored at a warehouse in Japan as you wait for orders to come in. This can be the better of the two options because Japanese consumers are used to extremely fast shipping because of how relatively small the island is.
Sameday and next-day shipping are often the standard and having products already in Japan can help ensure same fast shipping times as your potential competitors.
Two warehousing choices exist: an independent warehousing solution that meets your needs or warehousing and shipping services that are offered by the various online marketplaces in Japan.
One key benefit of choosing in-country warehousing is that things like tax and duty may be more manageable this way, however you would have to pay these costs instead of your customers.
Although some businesses find warehousing favorable, most consider it to be cost effective to choose cross-border shipping when first getting started.
Factors to consider when choosing a warehousing solution
What types of products are you shipping? Are they easily warehoused? Are you both willing and able to handle fulfillment on your own? Does your sales volume make cross-border shipping excessively costly, inefficient, or otherwise unmanageable? Does your sales volume make cross-border shipping more cost-effective? What are the storage costs going to amount to? How do the storage costs compare to your estimated taxes on individual imports? How quickly do similar products deliver? How will the shipping time impact your product? Does the size/weight of your products make cross-border shipping excessively costly, inefficient, or otherwise unmanageable?
Shipping products across the border would allows a business to choose if you or the customer are subject to the customs fees, you don’t have to register your products in Japan, and you will not be required to translate labels; however, this takes much longer and may not prove to be as cost-effective when you consider the long term. It is the most cost-effective solution for anyone who wants to start selling in Japan, though.
Without data to support a product’s sales volume, warehousing poses a larger risk for anyone who is just starting to sell online in Japan. Warehousing products will result in faster shipping and could potentially help you lower costs, but requires the need to work with a marketplace that has the appropriate framework in place or find your own importer.
This is definitely a more long-term solution that is best-suited for experienced sellers.
There are advantages and disadvantages to each option and the right one for your business is going to heavily depend on your answers to the questions above.