Win over customers with an affordable and predictable buying experience.
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If you haven’t already started selling internationally, it is time to start! According to Statistica, from 2014 to 2021 worldwide ecommerce sales will grow almost 246 percent, from $1.3 trillion to $4.5 trillion. The global competition for customers is increasing, with a significantly growing number of shoppers buying from sellers across international borders, including 83 percent of shoppers in Canada, 81 percent in Brazil and 78 percent in Mexico, according to the global UPS Pulse on the Online Shopper study. In the U.S., nearly half (47 percent) of shoppers purchased from merchants outside the U.S.
Smaller ecommerce companies often turn to marketplaces like Amazon and eBay to support selling internationally. Marketplaces like these allow customers to make international purchases in a safe, familiar environment. According to a 2017 International Post Corporation (IPC) survey of 29,000 International customers in 30 countries, 53 percent of all consumer international ecommerce purchases go through just three marketplaces: Amazon, eBay and Alibaba. Marketplaces can help solve currency conversion issues and provide international exposure to a large number of customers to create potentially tremendous new business opportunities.
While this rapid international growth is exciting, meeting customer expectations for predictable international transactions remains a challenge. The IPC survey also found that 62 percent of international buyers, for example, still expect to receive free shipping when shipping internationally despite the higher costs and unpredictable cross-border issues. Meeting high expectations and staying profitable is difficult, given the additional challenges of international shipments.
Here are seven tips to help small online merchants take advantage of the growing opportunities of selling internationally while remaining profitable and creating a predictable shipping experience for their customers. Sellers need to:
1. Know the international demand for your product and how your target countries regulate it.
Decide how to fulfill orders to different countries by answering basic questions. What is the demand for your product? Is your item taxable in this country and at what value or quantity? What customs regulations impact your product? What is the country’s de minimis level (the minimum threshold value for duties)? Are there methods to quickly locate a de minimis level for a given product so you can make the right decisions for your business model?
For example, if a company is selling expensive leather jackets into a country with a $100 threshold that triggers a per-item tax, your customers could be charged a customs fee equal to the value of the product. This might make your product too expensive for the target market. In a case like this, it might be much cheaper to put a load of jackets on a ship headed to a warehouse in Germany, and fulfill the jackets locally rather than shipping them individually using an international parcel service. Remember: Use your parcel carrier’s knowledge. It has customs brokers available who can help you figure out what duties apply to your products, in which countries. It can help with customs problems and suggest the most efficient shipping methods for your situation.
2. Control your shipping costs by using a parcel consolidator.
Most consumer ecommerce international packages weigh in at 20 pounds or less. The IPC survey also found that more than two-thirds of all international consumer ecommerce purchases are sent via parcel post. However, unlike U.S. First-Class Mail, handling parcels one at a time internationally doesn’t make much sense. First-Class Mail International can get expensive, making selling low-cost items a challenge because of transportation costs. And rapidly increasing volumes from China and other countries has created a strain on last-mile delivery speeds and reliability.
The challenges with international post have created a new breed of parcel service called the parcel consolidator. Upon shipment, using one of these services, packages are routed to a U.S. shipping center by the vendor, where they are consolidated on a pallet or large box by country and receive postage for the destination country. When packages arrive in the destination country, they go through customs in bulk and are dropped into the local post. This process lowers both shipping and cross-border costs and increases shipping speed. The packages are distributed worldwide to the customer’s doorstep.
3. Create a more predictable international buying and fulfillment experience using shipping automation software.
Express couriers can charge for delivery re-attempts, address correction fees and return fees. Sellers need to provide valid and accurate contact and address information from customers. Shipping automation software eliminates input errors by allowing users to automatically import orders from marketplaces, such as eBay, Amazon and others. Sellers can also purchase discounted postage, accurately and automatically print labels, and quickly locate orders and track shipments from a centralized dashboard. This is invaluable for immediately dealing with customs issues. Many products also allow you to create customized shipping automation rules to further streamline your fulfillment operations.
4. Use technology-based rate shopping to more accurately estimate shipping and control total delivery costs.
Different international shipping carriers and parcel consolidators serve different countries and customers better depending on their needs. Using shipping software with a side-by-side rate shopping feature allows shippers to search all of the international options available and see complete shipping estimates. According to the IPC survey, 93 percent of international shoppers won’t make a purchase unless they know the full cost — including delivery and duties — before they buy.
5. Deliver packages Deliver Duty Paid (DDP) rather than Deliver Duty Unpaid (DDU) by accurately estimating the full cost of a shipment, including duties, taxes and fees.
This decreases the chance that the package will be held up in customs and reduces unpleasant surprises for your customers (“$50 due to receive my package?”). Advanced shipping automation solutions simplify the process by allowing sellers to search premium customs content as part of their international shipping options, and see total landed cost estimates including duties.
6. Look for an online shipping solution that offers Electronic Trade Documentation and paperless invoices.
Electronic Trade Documentation is a real time-saver. Many countries require five printed copies of each invoice attached to the outside of the shipping container package. By submitting customs documentation electronically, you no longer need to print multiple copies. Always include a single printed copy of the invoice inside the package in case the label is damaged in transit.
7. Never misrepresent or under-declare the value of your items.
Shipping internationally is serious business. Do not try to game the system. Customs can confiscate or delay your shipment if they suspect it’s more valuable than you claim. Play by the rules, and incorporate tariffs and other product bans into the international ecommerce equation.