The first international purchase order is a good day right up until someone asks which Incoterm you are shipping under, whether you have an ECCN, and who is the exporter of record. An export shipment is a paperwork transaction that happens to involve a box, and the paperwork decides whether the box clears customs, who pays the duty, and whether you get paid.
Agree the Incoterm before you quote the price
Incoterms define where the seller's responsibility ends and the buyer's begins — carriage, freight, risk in transit, and clearance. They are not payment terms, and they must be paired with a named place, as in "FCA Chicago." Four cover most first shipments:
| Term | Seller does | Best when |
|---|---|---|
| EXW | Makes goods available at your dock; nothing else | Never, for a first export |
| FCA | Clears for export, hands to the buyer's carrier | The sensible default |
| CPT / CIP | Pays carriage (and insurance for CIP) to a destination | Buyer wants a landed number |
| DAP / DDP | Delivers to the door; DDP also pays import duty and taxes | DAP; avoid DDP |
EXW sounds simple and is a trap — you remain responsible for export filing while the buyer controls the shipment. DDP puts you on the hook for import duties and VAT in a country whose rules you have not read, and a foreign seller often cannot recover the VAT. The inbound equivalent is in FOB vs EXW vs CIF for importers.
The documents in every shipment
- Commercial invoice. Seller and buyer details, invoice number and date, a plain description of the goods (customs officers do not know your product names), quantity, unit and total value with currency, the Incoterm and named place, country of origin, and HS code. Vagueness and undervaluation get shipments held.
- Packing list. Carton count, dimensions, weights, and contents, so customs inspects selectively.
- Bill of lading or air waybill. The transport contract, and for ocean freight a document of title — whoever holds the original can claim the goods.
- Certificate of origin, where the destination or a trade claim requires one.
- Product-specific paperwork: safety data sheets, a dangerous goods declaration for batteries, import permits.
Classification: HS codes and Schedule B
Every product crossing a border needs a tariff classification. The Harmonized System is international to six digits; for US exports you use a 10-digit Schedule B number, searchable free through the Census Bureau. It decides the duty your customer pays, whether a trade preference applies, and whether the goods need a license. A customs broker will classify an ambiguous product cheaply — do not let a forwarder guess.
EIN, AES, and the filing threshold
You need an EIN from the IRS to appear as the US Principal Party in Interest on an export filing. Electronic Export Information must be filed through the Automated Export System inside CBP's ACE portal when the value of any single Schedule B commodity exceeds $2,500, or whenever the item requires a license. Filing returns an Internal Transaction Number for the shipping documents; without it the carrier will not load. File yourself in AESDirect, which is free, or authorize your forwarder as agent — you remain legally responsible for the data either way.
Export controls: EAR, ECCN, and screening
Most consumer and industrial products are EAR99 — subject to the Export Administration Regulations but not on the Commerce Control List — and ship to most destinations without a license. That is a conclusion you must reach, not assume. Is the item controlled by another agency? Defense articles fall under ITAR and the State Department, a far heavier regime, and the boundary matters for anything with military lineage, as in when your design becomes dual-use. Does it have an ECCN? Encryption above certain thresholds, high-performance sensors, thermal imaging, and navigation equipment are the usual surprises. Check the destination against the Country Chart, screen the buyer and end user against the Consolidated Screening List, and document it.
Origin and trade agreement claims
Country of origin is where the goods were produced or last substantially transformed, not where you shipped from. Where a free trade agreement exists, a qualifying claim cuts your customer's duty; USMCA claims use a certification of origin with specified data elements and no prescribed form. Keep the supporting bill of materials — verification requests come years later. See also regulatory markings.
Freight forwarders, NVOCCs, and insurance
Hire a freight forwarder. Booking carriage yourself on a first shipment saves a few hundred dollars and costs weeks. A forwarder books space, prepares documents, files AES if authorized, arranges insurance, and knows the destination's quirks. An NVOCC issues its own bills of lading and consolidates less-than-container-load cargo; both are licensed by the Federal Maritime Commission.
Vet a forwarder like a supplier: experience with your product type and destination, their own FMC license, whether they can act as customs broker at destination, and how they charge — a clean quote separates freight, surcharges, documentation, and handling. The air-versus-ocean tradeoff mirrors the import side in ocean freight vs air freight. Buy cargo insurance separately: carrier liability is capped by convention at trivial amounts per kilogram, while all-risk marine cover costs a fraction of a percent of value. If you ship lithium cells, the UN 38.3 test report and correct packing are non-negotiable.
Getting paid
The risk that keeps exporters up at night is the invoice, not the freight. Four structures, safest first:
- Cash in advance. Safest for you, hardest to sell — common for a deposit.
- Letter of credit. The buyer's institution promises payment against conforming documents, converting credit risk into document accuracy. Most first presentations are rejected over discrepancies as small as a misspelled name.
- Documentary collection. Cheaper; title documents are released against payment or acceptance. No guarantee, but the buyer cannot collect without settling.
- Open account. You ship, they pay in 30 to 90 days — what experienced buyers expect. Do it once you have a credit report and ideally export credit insurance.
Confirm the payment mechanism before the goods leave, and keep every export document for five years. Federal and state programs help with credit and buyers — see export assistance programs for US manufacturers. If you have not settled where to sell first, start with choosing your first international market and sales rep vs distributor.
Projects House helps product companies get a design ready for the markets they sell into — the markings, documentation, and battery test reports that surface at the border rather than in the lab. If an export order is on the table, describe your product through the contact form.