The world is truly getting smaller. As a global consumer, you can buy anything from anywhere, at any time, and at a price that is competitive. If you’re on the shipping side of things, it’s critical to explore how an international express service option can help your global sales explode. But first, here are some key facts about cross border e-commerce sales:
· Retailers who offer premium shipping services grow 60% times faster than those that don’t.
· Cross-border orders are growing 25% per year
· Global consumers value speed over cost
· 67% of global consumers buy for lower prices
· 10% of all cross-border sales are shipped via an express service
· Cart values will go up 70% on international orders
· Cross-border orders have half the return rate as domestic orders
· 68% of millennials would choose a retailer based solely on their returns policy
There are many options to ship parcels globally, and they are categorized in the following way: postal, package consolidation, and express. A postal option is defined as using the local postal authority and shipping parcels around the world. This is largely done by mutual agreements by all postal authorities to deliver each other’s inbound packages. This can be a cost-effective way to ship or an expensive way to ship. However, most postal organizations offer an express delivery option, but these packages are usually shipped via commercial flights and have a high priority when arriving in another country’s mail system. The second option is through a package consolidation service, which is done by consolidating many packages in a central location and then shipping them to a destination country that will deliver the package through a local delivery company or through the local postal authority. This is a very cost- effective way to ship cross border packages, but they usually get delivered in three to 10 days. There are different service levels with these parcels, which may or may not include tracking capabilities. Some of the services will provide DDP service, which means the shipper is paying for the duties and taxes. This would require the merchant to have a duty/tax calculator in the order process. The final option would be using an express delivery service via DHL Express, FedEx, or UPS.
Express Delivery Advantage
The private delivery companies have built global networks that are designed to move packages quickly through all hours of the night. They have also developed very sophisticated customs clearance processes that allow them to clear packages before they arrive in a country. This is called a “wheels up” clearance process. Here are some of the advantages of an express service:
· Fast Delivery (1-3-day service)
· Convenience: They all have direct pick-up service or retail centers
· Tracking: You can track a package from the time it is picked up and get alerts
· One Price: You will know your exact price at the time of shipping
· DDP Service: All the carriers offer this service to expedite the delivery experience
· Reliability: They consistently deliver in their network by the same number of days
An express delivery option truly delivers a great consumer experience. In most cases, there is a uniformed delivery person who delivers the package to your customer’s door. In many countries, you cannot leave the package on the doorstep. Many of these countries are adapting to parcel lockers and the consumer is notified where they can pick up their package, which allows the consumer to receive the package when it is most convenient for them.
Remember, once a global consumer has a positive delivery experience, there is a high probability that they will order from the merchant again. If you are not in the international arena, here is simple way to calculate the potential:
Conversion Rate (2%): 100,000 x 2% = 2,000 international orders per month
Average Order Value: $100
International Sales per Month: 2,000 x $100 = $200,000
International Sales per Year: $200,000 x 12 = $2,400,000
As you can see, there are great opportunities to be selling your product globally. The express service option tends to bring more value as the value of the order goes up. There is no secret sauce to ascertain the right value to offering this option. You need to look at your margin level and determine if you can support free shipping or if you need to offer a flat rate for an international express option. Global consumer research has indicated that global consumers prefer speed over cost so putting in some flat rates to cover the shipping cost is an option. One of the biggest complaints that merchants express is the cost of an express service option. The international service is a very profitable segment for the carriers, and they are willing to offer discounts in excess of 50%... you just need to ask for it. Many of the carriers have resellers that are willing to offer these discounts without any volume commitments.
An international express service option can take your business to new heights. This is what your customers are looking for, so offer it on your website and clearly define the expectations.
Michael J. Ryan is the VP Parcel Solutions at Flat World Global Solutions and has over 25 years of experience in the parcel industry. He can be reached at 708-224-1498 or firstname.lastname@example.org.
This article originally appeared in the 2022 Cross-Border and Global issue of PARCEL.