How To Scale Your DTC Business Globally — Alex Yancher | What Blocks Brands From Going Global, What VAT-ready Pricing Looks Like, Tariffs, Taxes & Localization, Why $1 Orders Trigger Duties, Why Duties Transparency Matters (#426)

In this episode, we dive into the challenges and opportunities of selling products globally. 

Alex Yancher, co-founder and CEO of Passport, explains how brands can navigate tariffs, taxes, and shipping rules while reaching customers worldwide. 

He shares strategies for going international fast, using local pricing and VAT, and avoiding surprises with duties and compliance, helping brands grow smarter and capture more sales from day one.

Topics discussed in this episode:  

• Why a $1 order can trigger US duties.
• How removing the $800 de-minimis forces DDP or surprise fees.
• What stalls brands going global: duties, compliance, returns.
• How Passport automates taxes, HS codes and compliance.
• Why brands are global day one — how to monetise it.
• What localized pricing and baked-in VAT look like.
• How software plus local warehouses prevent customs surprises.
• Why duties transparency is now a core brand strategy.
• How fast brands can go live — sometimes in a week.
• What upside to expect — ~20% lifts from expansion.

Links & Resources 

Website: https://passportglobal.com/
LinkedIn: https://www.linkedin.com/in/alexyancher/
X/Twitter: https://x.com/AlexYancher

Get access to more free resources by visiting the show notes at
https://tinyurl.com/3mhsw3as

Transcript

Speaker 1 (00:00.17)
Even for a one dollar item that gets shipped, that product is subject to duties into the U.S. This is the reason that brands are stimmied from going global. It's just one big headache. You're an online business day one and online is accessible anywhere. It's tariff. It's not going anywhere. A brand just needs to decide how they're going to handle it.

Hello and welcome to another episode of the Ecommerce Coffee Break podcast. Going global is important for DGC brands, but it's also more complex than ever. So in this episode, we explore how tariffs, and localization shape global growth and what brands need to know to stay ahead. Joining me is Alex Yancher. He's the co-founder and CEO of Passport, a top global e-commerce platform that helps brands scale international shipping. With a background at Facebook and Morgan Stanley, Alex knows what it takes to grow startups and simplify global trade.

And since starting Passport in 2017, yes, helped over a thousand brands. So we have a lot to cover. Let's get started. Hi Alex, how are you today?

I'm good Klaus, thank you for having me.

Let's dive right into it. First question, what makes it so difficult for brands and what kind of mistakes do they make when they handle global shipping by themselves?

Speaker 1 (01:17.528)
Yeah. So, you know, before passport, I actually had another startup called links, which is a personal shopping service that helps people abroad by products from the U S and, we had a physical warehouse. were located in Delaware and it was my job. I was on the operations side of the, of the house. It was my job to figure out how to ship all those products that we got.

all over the world and we weren't in control of what people want to buy. So sometimes people want to buy expensive things like jewelry and sometimes cheap and bulky things. Sometimes small things, sometimes big things. So we weren't really in control and we had been using, you know, traditional shipping companies, the DHL, the FedExes of the world. And we

had to use a different company to calculate duties and taxes on the shopping cart. We had to work with an agency, know, many agencies actually, because every country has a different set of rules and regulations around what you're able to ship into the country, how to market and declare it. And so we're working with many regulatory agencies.

And the list goes on and on of all of these things that we had to do in order to ship these products all over the world. just being in the trenches of that business operationally, it became immediately clear to me that this is the reason that brands are stimmy from going global. There's just so many things that a

company needs to do in order to have a successful international program. You gotta, it's not just the shipping, you gotta do the duty and taxes, the regulatory compliance, sometimes payments, you gotta figure that out. Don't get me started on returns. And you put all those things together and it's just one big headache. So that was really the impetus for Passport.

Speaker 1 (03:35.448)
for me to kind of think, you know, there should be a better way. There should be one solution where all of those systems, speak to each other. the calculator in your shopping cart, what it's telling you to charge customers for duties matches what you end up getting in your invoice from your shipping company. It needs to match. Otherwise you're either overcharging or undercharging. So.

It's actually a pretty complicated problem to solve. So I thought there's so many interesting things to solve. this is, you know, I started passport about eight years ago. So there's been no, no lack of challenges. And this is eight years ago. This is before Brexit. This is before Trump tariffs. So, and the, the, world of global trade and complexity.

that comes with it, I would say has only grown over the last eight years.

Speaker 2 (04:40.622)
I totally agree to that. And I think what you said that a lot of brands shy away from going global because of that makes total sense. I want to touch a little bit more on the details that you mentioned, like localization, like compliance rules, like taxes. What's your approach if, I don't know, lot of you deal with 180 or almost 200 countries. So it's really, really complicated. How do you get all this data into your system so that you can provide it to the DDC brand?

Yeah, so that is a challenge. But at this point, at this point, it's a solved problem, at least by us. We connect into the World Trade Organization data set and all local places of record that that stores this information and is driven by government mandated.

rulemaking that gets updated as soon as a new tax changes. It gets updated in local registrars and we have a subscription to all of the global data sets. We aggregate it and then we do our magic on top of it to have the most accurate recent information in the cart.

And it shows how complex this is and that is probably for a DTC brand should not be on their to-do list to figure that all out. Now, again, there's a huge opportunity to go global. A lot of markets are growing massively when it comes to e-commerce right now. And as you mentioned before, don't as a seller, you don't want to have the surprise that you're overcharging or undercharging on the shipping fees and everything with Comset. So what's your take on somebody wants to get started?

Where do they start? What's the process? How do they pick the first country? What would you recommend?

Speaker 1 (06:37.856)
Yeah, yeah. Well, I always like to tell brands that they're already global day one, even if they don't accept orders from people abroad. Because some component of your business lives online. Either it's an Amazon profile or it's your dot com Shopify store. Whatever it happens to be, you're an online business day one.

And online is accessible anywhere. And most of the top of funnel marketing approaches that brands have are also global. Instagram is global. TikTok is global, of course. Influencers, most of an influencer's following is outside of the US. I would even say the vast majority of an influencer's following is outside of the US. Kim Kardashian, 80 % of her fan base

on, you know, measured by say subscriptions or followers on social media is outside of the US. So if you're talking about a brand that is out in the world marketing, you're already going to have traffic and interest spillover, positive, great spillover into for sure English speaking countries if you're an American brand.

and every brand that's not an American brand has an English version so that they can capture, the Anglo world, the Anglo speaking world, which is big. so you're already global. You're already global. The question is, what do you want to do with it? How, how much do you want to monetize it? how big of a business do you think it can be for you? And a lot of things go into that question. but it doesn't hurt to start small.

to just turn it on, crawl, turn it on, start accepting orders, see what you get off that, start to replicate some of the marketing efforts that you're doing in the US. The exact same ad, it's in English. Again, it's just in English. do it in Canada. Canada has over 30 million people, middle class, wealthy country, about the same size as California. So it's like, you know,

Speaker 1 (09:04.192)
another really big opportunity for brands that are finding success in US. And see what your return on ad spend is. Your ROAS is on Canada. And I'll tell you another thing for your audience. Not an obvious thing, but the cost per click is cheaper in Canada than it is in the US.

So what I'm suggesting here is enter a market that has over 30 million middle class English speakers using the same exact marketing materials that you have. Don't change a thing about your operations. Just accept the order on Shopify. It's easy. Boom, there's like four or 5 % right there for a brand. Why not? Why not monetize that 4 or 5 %? And then triple it to like 15 % if you

want to open it up and kind of also do some marketing in UK, Australia, you know, that's over another hundred million English speakers, you know, that have affinity for American brands, Western culture, you know, all of that kind of stuff. It's just one big affinity group. So why not monetize it, especially if you can reuse a lot of the same stack? Okay. So you're that's that's like one path.

And, you know, my company password, we kind of help you all along the way. And then, and then there's a point and some, some brands they're so big and they're so successful in the U S that they leapfrog this crawl walk and they go straight to run and they can do it. And they find a lot of success. In fact, to them, speed is, the most important thing. And what they do is they'll set up local operations before they even get their first order. They will set up.

local operations in the country. great example of this is our client Hexclad. Very famous frying pan company, incredible brand. Their influencer spokesperson is Gordon Ramsay.

Speaker 1 (11:22.934)
Right? Where's he from? He's not from the US. He's from the UK. He's probably more famous there than he is here. So for them, it was a complete total no-brainer. Let's launch locally in UK, feel like a local UK brand, have fast delivery time, lower our costs to ship locally. That was a total no-brainer. It wouldn't have been the

the best advice to Hexclad, just start small, see how many orders you get. Like they need to go out with a boom, you know? And this is just like a happy coincidence that their influencer happens to be UK. It's the same logic, you know, if they were to launch in Australia, you know? So that's our approach to brands that are considering international. Each story is a little bit different.

in each situation is a little bit different. But the the common denominator is that you're already global. It's just like reframe the question. What are you going to do with it? That's really the question.

That makes sense. And I liked the example that you gave was Facebook ads. And I think most of our listeners are spending on paid ads, either on Google or Meta or wherever. And if you're only US, you might not be aware that your money gets you further with ads in another country. So definitely a route to think of and to go for. Now talk me to the, what Passport does. So how does it link into my existing business, into my Shopify? How does it work?

Yeah, so we do a few things for brands. Big picture is we solve internationalization for brands end to end. Logistics, experience, compliance, all of those things. So let me break it down for you. On the experience side, on the Shopify side, we have an app that does a few things.

Speaker 1 (13:33.586)
One is we localized the pricing for brand. Two is we surface the correct amount of duties and taxes where applicable. And in some cases, we actually localized the VAT. And what I mean by that is we help the brand bake in that VAT into the price of the good because that's the localized way of surfacing prices in certain countries that have that. You don't really break out VAT as a separate line item. That's kind of the default.

UI on Shopify in the cart, but that's not really the experience of consumers in UK and EU. They're used to seeing just a final price. So we do that, help a brand surface the correct currencies. We work within the framework of Shopify markets.

So a brand will give us collaborator access as well and we'll go in and we'll manage the Shopify markets for brand and we'll set it up alongside our app does a few things. So in addition to that, we handle taxes and duties for a brand end to end. A brand doesn't need to do any local registrations, worry about paying local taxes or duties. We handle all that for them.

anything regulatory compliance related. have an in-house compliance team that will review products, help assign HS codes, do a full compliance review, and a brand doesn't need to worry about that. When something is flagged, like we need to either block a certain product to a certain country or the brand needs a certificate or something like that, we'll quarterback that process to make sure that the brand gets everything that they need.

And then on the logistics side of things, we're actually vertically integrated with our own logistics company. So we have our own warehouses in the U S by coastal and in Chicago. one in New York, one in LA and one in Chicago, and we handle physical logistics volume out of those locations. And, and we, so we marry all

Speaker 1 (15:56.918)
everything that we do on the software and services side to this logistic solution again so that there's no surprises for brands. And it ends up being a really seamless experience where if there is some disconnect, know, it's possible our software got something wrong and we'll find that out very quickly because our customs broker is saying we can't accept this HS code or something like that and we fix it right away. So the feedback loop is really tight.

And we solve problems very quickly because of it. And that's a big thing. And that's why we've become the trusted partner for brands on both the internationalization and the actual physical logistics. work with about 183 PLs right now, direct to consumer 3PLs in the US. yeah. And for some of them, all we do is logistics. So we've really become the trusted name in.

international parcel logistics as well. And yeah, that's our place in the market, Klaus.

That's a really end to end solution. think that will make a lot of people happy to hear that, that they basically can outsource the complexity and everything that comes with it to someone like Passport. I want to touch on, obviously I have to, on the tabloids, what's going on right now in the world. It's a bit of a crazy world. I'm sure it will slow down at some point and get back to normal. But while we're in it, I think a lot of brands and their customers might a little bit feeling insecure if they buy online and it's abroad, what's happening, how long will it take?

How would you recommend or what would you recommend to a brand to communicate what's happening right now within their communication, within their shipping rules or whatever?

Speaker 1 (17:43.116)
Yeah, it's a good question. mean, the rate of change, I would say, with the US market is unprecedented. So let me try to address this question just for the US market, because other markets, not really changing too much, not yet at least.

whatever they've been doing is probably working. hasn't been that much change, but for US there hasn't. So the biggest change, or there's two big changes that kind of work next to each other and are interrelated. So the first change is that the de minimis has gone away. The $800 US de minimis has gone away. The last day is August 30th, 2025 for us the world and it's already been gone for

for China-made goods. means that now even for parcel shipping, even for a $1 item that gets shipped from your favorite DTC brand or Tmoo, that product is subject to duties into the US. There's two methods of shipping. One method is delivered duties paid and another method is delivered duties unpaid.

And deliver duties unpaid means it's the responsibility of the consumer, the US consumer who ordered that to pay the duties. Okay. That's really an unestablished method that does not really work in the US because the de minimis has been around for so long. There really is no effective scalable mechanism that the USPS or frankly other carriers have.

to collect duties from individual consumers en masse. So I don't think that that's going to happen. The other method is deliver duties paid where it's the responsibility of the shipper, be it the merchant or the carrier, but somebody upfront needs to pay the duties so that it's delivered duties paid to the end consumer.

Speaker 1 (20:02.766)
And that's going to be the new method of shipping into the US, deliver duties paid. So a consumer doesn't need to be concerned about any surprise. The US consumer doesn't need to be concerned about any surprise bills into the US for orders that they buy from abroad into the US off eBay or Etsy or something like that. However, a merchant now needs to communicate what their price is.

And it can be either, I'm just going to eat this cost and I'm going to put it in my price and the price is just more expensive. Okay, no surprises for the consumer, but the consumer sees a lower price or break out duties as a separate line item, the way tax is broken out and have the consumer go, okay, I get it. You know, some have even played, we said no politics, but some have even played some politics games where they put Trump tariff, you know.

And they put the number there. So there's different approaches that some are taking. So some are putting some personality into it. Some are just hiding it completely. Some are putting it in. So nobody really knows right now what the most optimal way is. And for each brand, it's their own tactic or strategy that matches their brand. Are they a price-focused brand? Are they more brand with personality? That kind of thing.

But at the end of the day, a brain needs to decide what they're going to do with this duty. one option is just ignore it, keep your price the same and eat the cost, of course. But at the end of the day, this price, this new amount, this tariff, it's not going anywhere. It's like a carpet. You push down the bump here, it's going to bump up somewhere else. So a brain just needs to decide how they're going to handle it.

I think that was a brilliant explanation that you gave there. And I think a lot of listeners will be happy to just hear what you just said, because it's actually not that complicated. You just need to put it into your business. I think being transparent is very important and making sure that it will not be complex for the consumer, the person who buys from you. I think that's very important to keep the convenience there and they don't need to run to a tax office or a custom somewhere. So I think it's very straightforward.

Speaker 2 (22:25.624)
people, brands can handle with it and you just need to be upfront and transparent on how it works. Now tell me about the onboarding process with Passport. If a brand approaches you, how long does it take to get up and running? Is there any kind of homework that I need to do?

It's super fast. mean, there are some things that can slow it down. Like, for example, we would need to be integrated with the brand's 3PL. But when we're integrated with a brand's 3PL and we're in pretty much all of the major direct to consumer 3PLs and the ones that we're not, we're like in the process of onboarding. It's actually very fast. The complexity sometimes lies with a brand that has a very large

I'm talking like 100,000, you know, skew list because we go essentially through every product and make sure that it's set up correctly to ship, you know, with the right information for us to be able to clear customs for this product and help you charge the correct amount in your shopping cart or configure your prices with the right amounts to capture the duties and taxes.

So I'd say a week, let's say a week with like proper brain engagement. You could be live with passport in a week.

Okay, we were talking about Shopify integration, but I'm sure you have other APIs and interfaces. Which systems do you work

Speaker 1 (23:54.414)
Absolutely. mean, frankly, we can work with anybody. We have APIs. There's a big wave right now of brands that are building their own solutions. You know, with AI, it becomes much more feasible to build some cool technology much faster, cheaper. So a lot of brands are going that direction. And we work with them. They plug into our APIs and we drive whatever they need in their cart around duties, prices, currencies, all of that.

So we help there, but we work with BigCommerce, with Woo, with Magento, with all the major ones.

Okay, the whole range. Who's your perfect customer?

Well, again, we run the gamut. We work with accounts that are just starting to get going. But ideally for us, it's a brand that's doing, call it five million plus in total sales, even if they haven't turned on international yet. Because the math that we're doing is we can get them up to 20%. You know, any brand with the right level of engagement and dedication to international can get it up to 20%.

Some could obviously far surpass it. Nike is 50%. But without doing anything too dramatic, a brand could get it up to 20%. So for us, we're looking at a million dollars in international GMB. And that's a pretty good number for us. That's a good place for us to start. Some of the really big accounts, one solution we didn't talk about, Klaus, is our in-country enablement solution, where we help big brands like Hexclad set up local operations with a

Speaker 1 (25:36.416)
Importer of record and immersion of record service. So that's also really great fit for us. So brands that are doing a hundred million plus We really help them Turn up the turn up the heat on international with this local enablement

So for our listeners, no matter where you are in your journey as a brand, approach Alex. There's definitely a solution for you out there. Alex, before our coffee break comes to an end, is there anything you want to share with our listeners that we haven't covered yet?

I would say that there's clarity at this point on, where tariffs are landing. So, start making some decisions. You could kind of count on this, the, we're at in, in, in global trade to be there for at least this, Trump administration. My team is there to help. have an in-house, global trade team. We're here to advise and help.

I'm personally love working with brands of please feel free to email me personally alexet passport global dot com.

Okay, cool. will put the email and the link to your website in the show notes, then you just one click away. Alex, thanks so much for giving us an overview of what's happening in global shipping right now and what kind of opportunities lies in there. And I hope a lot of people will reach out to you. Thanks so much for your time today.

Speaker 1 (26:52.12)
Thank you, Klaus. That was great. Thank you.