From the moment consumers click “complete purchase,” they are eagerly awaiting the arrival of their package. There’s no denying that speed is of the essence when it comes to today’s shipping and logistics landscape, something that is even more difficult to achieve with cross-border sales and shipping. In reality, your consumers don’t care where your business is based, they only care about receiving their package as quickly and affordably as possible.
As more than 80% of US imports are goods, there is a massive demand for overseas products and purchases. For example, more than 67% of apparel shoppers have completed a cross-border purchase in a 12-month period, while 62% of international buyers still expect free shipping.
Let’s not forget about tech giants like Amazon, eBay, AliExpress, and even Facebook (Instagram) that are transforming online marketplaces as we know them. Smaller companies may use these marketplaces to gain an international reach, while other more established companies prefer to sell directly to consumers to maximize profit margins.
With an international market comes an international customer base. By and large, the main benefit of cross-border sales is gaining access to more customers. Cross-border e-commerce strategies can also give your brand more control over branding and pricing while solidifying your company as an international force.
However, the rapid growth of international shipping markets is equal parts exciting and challenging for businesses of all sizes. Here are only a few examples of pain points that may accompany cross-border shipping strategies — and what you can do to combat them.
Cost is at the forefront of many shipping-related decisions, and it’s no different for the international market. You’ll want to consider cross-border e-commerce sales as a separate entity of your business with a separate budget and resource allocation.
Many countries implement a Value-Added Tax (VAT), General Sales Tax (GST), customs, tariffs, and other fees that quickly rack up. Some customers may be happy to pay a premium to receive your products internationally, while others refuse to purchase anything without free shipping. Decide whether or not to pass along these costs to your customer.
To keep fees and costs to a minimum, consider diversifying your carrier mix by utilizing the four major national carriers in addition to local, regional parcel carriers whenever possible. You can also negotiate shipping rates with carriers and optimize your package item dimensions and weight to ensure the cheapest possible shipping options.
Slow Onboarding of New Carriers
“Carrier onboarding” refers to the process of adding a new carrier to your mix. If your business is integrating with carriers individually, this means your developers will spend precious resources integrating and maintaining the necessary connections.
The more carriers you add to your mix, the more time this will take. This means that customers in certain regions will feel the effects of a slow integration process if you don’t already have an established carrier in this region.
How is it possible to both diversify your carrier mix and ensure the carrier onboarding process doesn’t slow your international packages down? Modern shipping technology such as multi-carrier shipping APIs can give you access to handfuls (even hundreds) of carriers through a single integration. APIs are a one-stop solution to help overcome multiple pain points in cross-border shipping.
Your international customers may feel hesitant to order a product from overseas if the returns process is a nightmare. Imagine waiting seven business days for your overseas order to arrive only to realize it doesn’t fit properly, it wasn’t what you expected, or you received the wrong item. You’ll now have to repackage the box and coordinate a return by going to the post office or scheduling a pickup.
As a business, you have two choices: cover the costs of the return or let the consumer be responsible to pay for the return. If you sell low-value items, you can consider writing off the item and refunding the customer before you have the returned item back in your hands.
Other businesses don’t have the luxury to do this and instead utilize parcel forwarding services despite the vast majority of them being slow and costly. You should also consider including a prepaid shipping label for your customers to simplify the returns process and prove that you value a streamlined customer experience.
International deliveries can be as fast as one to three business days and as long as 10 business days depending on specifics. These timeframes were undoubtedly extended during COVID-19 and will likely remain skewed until after peak shipping season has subsided.
The sole addition of customs can mean border delays, complicated paperwork, additional costs, and overall delays. All of these additional factors have the potential to directly impact customers’ perceptions of your brand.
It’s essential that your operations team is fully aware of all processes and requirements in cross-border shipping to keep delivery times reasonable. If necessary, consider establishing a dedicated department to navigate regulations and compliance.
As an additional takeaway, always add parcel insurance to your international shipments to cover your bases in the case that packages become damaged or lost.
The Takeaway: Cross-Border Shipping Is Here to Stay
International shipping can be a huge asset to your business as long as you conduct the necessary research, plan ahead of time, and temper your customers’ expectations. Utilizing technologies such as third-party logistics (3PLs), transportation management systems (TMS), and APIs can help your business thrive in the international shipping arena.
Shipping is incredibly dynamic and you should constantly be evaluating and re-evaluating strategies, operational procedures, operational capacity, and consumer demand as we head into another peak shipping season — and beyond.
Jarrett Streebin is CEO and Founder of EasyPost.
This article originally appeared in the 2021 International issue of PARCEL.