While there are a number of similarities between domestic and international trade, there are also several significant differences. These differences often have to do with how the goods are moved between the buyer and seller, the imposition of tariffs and other charges, the type of insurance that must be secured as part of the business deal, and even how the buyer goes about paying for the goods and shipping. Knowing these differences can allow buyers and sellers to participate in the global trade of goods and services, a situation that provides additional opportunities for both parties.
One of the more apparent differences between domestic and international trade is the fact that domestic purchases and sales are not affected by the location of the buyer and seller to the degree that is true with international transactions. When the buyer and seller are located in the same nation, only trade regulations related to that one country will apply. By contrast, an international transaction would have to be conducted in a manner that is in compliance with the trade regulations that are in place for both countries involved. This requires that both the buyer and the seller be aware of those regulations and make sure the goods, the mode of shipping, and the documentation prepared is in line with those regulations. Failure to do so can lead to delays in delivery, and possibly lead to refusal by the receiving port to allow the goods to be unloaded.
Another key difference between international and domestic trade is that the type of fees and charges associated with the shipping process will also be different. Various tariffs and other fees are typically applied to shipments between countries, regardless of whether the mode of shipping is by travel over land, by sea, or by air. In contrast, the process of transporting a shipment between two points in the same country is much simpler in terms of the type of taxes, fees, and charges that are levied as part of the shipping process. Identifying and properly calculating all relevant taxes and charges is one of the more important aspects of understanding how domestic and international trade arrangements will differ.
Other differences between domestic and international trade are also common. Problems with the rate of exchange between the two currencies involved may require some planning to arrange, while the matter of currency is not a problem with domestic transactions. In like manner, language and cultural differences may also be of concern with an international transaction, but are much less likely to be a factor in a domestic one. While the processes used for international trading may be somewhat more complex than conducting a domestic transaction, professional shippers and agents can help buyers and sellers understand what needs to be done in order to successfully execute the transaction and arrange for shipment and delivery, while avoiding some of the pitfalls that could otherwise occur.
