Disadvantages of International Trade

1. Disadvantages of International Shipping Customs and Duties

International shipping companies make it easy to ship packages almost anywhere in the world. 

However, one of the disadvantages of international trade is that most of these destination
countries' customs agencies charge extra fees on items shipped to them.

While each government determines the duties and taxes differently, it is typically calculated on
the value of the products sent (item, insurance plus shipping). The item description may also
affect these fees based on what it is made of or used for.

In addition to the cost of their product, a company needs to understand what the end
consumer will be charged by the international shipping company. This is sometimes referred to
as the “landed cost." 

2. Language Barriers 
Despite the availability of online translators, language is still one of the major disadvantages
of international trade. While translation tools can be used to formulate instructions and
communications in another language, they are far from foolproof. 

The marketplace is filled with examples of poorly translated products with names that got
misconstrued in another language. To solve this, consider using a marketing agency in the
targeted country or region to review all the company's materials before rolling out the product
or service.

3. Cultural Differences
One of the major disadvantages of international trade is that, many times, cultural differences
are never documented. There are unwritten rules of commerce in the country that are hard to
uncover and can be even more difficult to solve. 

For example, the word "yes," in Western cultures typically means agreement. In some Eastern
cultures however, it can mean that the person understands what you are saying, but does not
necessarily agree. 

When I traveled to India, I found that people would turn their head side to side to mean "yes"
and up and down to mean "no"—the opposite of what those gestures mean in Western
cultures.

4. Servicing Customers
After international customers make a purchase, how will they be serviced when they are so far
away? Again, language and cultural differences need to be considered to overcome one of the
major disadvantages of international trade. 
Your company needs to be prepared up front to communicate with these customers in different
time zones, preferably in their language. If you're not able to staff 24/7, expectations for when
a reply will be received need to be set up front.

5. Returning Products
Since not all international customers will be satisfied with a company's products, a process
must be in place to return them and process a refund.