For many companies, the allure of cross-border e-commerce shipping is tempered by the costs and challenges of international e-commerce logistics. Consumers are increasingly turning to cross-border e-commerce shopping, however. Companies need to address the difficult topic of global e-commerce shipping early—and often—to make sure they’re providing the best and most cost-efficient shipping service to their customers.
We’ll cover the challenges of international e-commerce shipping and how to overcome them.
The Rise of Cross-Border E-Commerce
E-commerce giants like Amazon and Alibaba are reshaping the consumer landscape and improving logistics capabilities, making shipping times shorter and costs cheaper—and increasing demand. So now’s a great time for companies to start looking abroad for more customers. With the right marketing and careful attention to shipping costs and best practices, companies can find new consumers anywhere in the world.
Consumers are becoming more comfortable with buying from international sellers as e-commerce shipping and mobile technologies have improved. In fact, although desktops and laptops are the most commonly used devices for cross-border e-commerce, it’s increasingly being driven by purchases on mobile devices in places like Latin America, Asia, and the Middle East.
Since 2015, business-to-consumer (B2C) cross-border e-commerce has more than doubled from $304 billion to $676 billion in 2018, and it’s expected to continue rising to nearly a trillion dollars by 2020. Consumers are looking across the border for a variety of reasons. According to research by Invesp, 49% of consumers shop abroad to find better prices, while 43% of consumers do so to find brands they can’t obtain domestically.
With so many consumers looking to discover cheaper, varied goods across the globe, it may be a little surprising to learn that only 36% of U.S. merchants sell internationally. That means there’s a world of opportunity to be discovered abroad with potentially fewer competitors in the marketplace.
While more consumers are shopping overseas, many shoppers still have concerns—all of which have to do with the logistics of cross-border e-commerce shipping. When shopping abroad, 51% of consumers are concerned about high shipping costs, while 47% of consumers are concerned with long shipping times.
To help your company develop e-commerce shipping best practices that will boost sales and assuage consumer fears, we’ve put together our top e-commerce shipping lessons learned over our decades helping companies expand their businesses internationally.
E-commerce Shipping Mistakes (and Lessons Learned)
For companies with consumers in other countries, successful e-commerce shipping begins long before the packages are addressed and sent off. Overall, most of the e-commerce shipping mistakes covered here can be avoided with proper attention to detail and a willingness to constantly re-evaluate the process.
Here are our top tips to help you avoid e-commerce shipping blunders that cost you customers or ruin your profit margins.
Not Localizing the Customer Experience
When your company first sets out to sell internationally, it’s important to adapt your marketing messages and logistics to each market. According to KO Marketing, 49% of marketers spend less than 5% of their budget to localize and adapt their marketing message. That means that many companies are severely underestimating the importance of localizing: in fact, only 25% of internet users speak English.
By ignoring the unique needs of each regional marketplace, companies are setting themselves up for international e-commerce shipping blunders—if they even make the sale. Without localization, your customers may not be able to enter their address correctly, for example. As we’ll discuss below, not localizing the address form will result in costly returned packages.
Localization is also huge when it comes to payments. In Brazil—a significant market in Latin America—only a small portion of the population has a credit card that allows international transactions. Traditional payment methods like PayPal may not be enough to tap into the Brazilian marketplace.
If your company is serious about international e-commerce, you should invest in localization.
Not Knowing Whether You Can Ship Your Product to the Country
International shipments are closely monitored, and many countries prohibit dangerous and illegal items like firearms or narcotics. While that’s not surprising, some restrictions are. Mexico, for example, restricts used clothing from being shipped into the country, which means popular online secondhand stores like ThredUp may have their shipments rejected.
Before shipping to a new country, make sure your company’s goods are legally allowed to enter the country.
Making Assumptions About Shipping Costs
International shipping is a different animal than domestic shipping. Never assume you’re getting the best deal just because you’ve used a method or company before to complete your domestic shipments.
When shipping internationally, you may be charged by dimension or by weight. If you’re being charged dimensional pricing, failing to choose the smallest possible package may cost you a lot in the long run. Similarly, how you ship internationally—whether by sea or air—can make a huge difference in the cost and time it takes to ship.
Make sure you understand exactly how you’re being charged and consider if there’s a better way for your bottom line and for your customers.
Not Considering a Fulfillment Center
For many smaller e-commerce companies, it’s easiest to handle all of the fulfillment in-house. But the pressure of international fulfillment can quickly become too much for a company to handle internally. Third-party fulfillment centers are a great solution, as long as you find the right one.
How do you know whether a fulfillment service is right for you? According to Shopify, you should consider it if:
You have 10 or more orders per day
The cost of storage is getting too expensive
You have seasonal spikes or are going to expand soon
A good fulfillment center will take pressure off of your staff, reduce shipping errors, and lower costs in the long run. Plus, if you choose a fulfillment center that’s closer to your international consumers, you can dramatically reduce shipping times.
Using the Wrong Logistics Partner
Finding the right logistics partner is integral to creating a successful international e-commerce shipping experience. While large logistics companies can ship all across the world, it’s worth looking into logistics companies that specialize in the region where your company’s expanding.
With decades of experience in Latin America, SkyPostal has a trusted network of couriers and partners that provide our customers with an unrivaled final mile experience. Our operations in the region allow us to offer integrated shipping and tracking technologies that many other logistics can’t.
Failing to Factor Duties into Customers’ Checkout
One of the biggest differences between domestic and international e-commerce shipping is the need to pay duties on packages. One of the biggest blunders a company can make is not addressing duties clearly during the checkout process.
There are two ways to handle duties: they can be collected prior to shipping or when the package arrives at customs. But if you don’t make it clear how much customers will owe and when they’ll owe it, you may have very upset customers who feel ambushed by surprise costs. Furthermore, you may have costly returns or abandoned packages when the duties aren’t paid.
Be transparent when it comes to the full cost of your products, including shipping and duties.
Not Checking for Correct Addresses
Every country has a different way of formatting addresses. The formats can even vary from region to region within a country, especially between rural and urban areas. Many areas in Latin America rely on landmarks, instead of street addresses, to identify residences.
Failed deliveries are more common than they should be in this day and age. A good fulfillment partner or address verification service can dramatically reduce the number of international shipments that don’t make it to their final destination.
Neglecting to Audit Your Shipping Procedures and Outcomes
Shipping costs change; what was affordable one year can quickly become a margin-buster the next. If you don’t stay on top of your shipping costs and practices, you may be wildly overpaying for e-commerce shipping—and driving customers away with your high prices.
Take stock of your shipping practices semi-annually. How many of your international packages are getting returned? Are they failing to make it through customs? Do your shipping costs contribute to shopping cart abandonment?
You should ask all of these questions and more regularly and reach out to logistics partners to see if you can get better prices and services.
Not Having a Separate International Return Policy
Being an e-commerce retailer means dealing with returns. Compared to brick-and-mortar stores, e-commerce retailers face 2 to 3 times as many returns (around 9% versus at least 30%, respectively). Being an international retailer means dealing with costly returns and customs procedures.
Domestic and international returns are like apples and oranges. So while it may be possible to provide free returns for your domestic customers, it’s probably financially impossible to do so for international customers.
Make sure you spell out the differences between international and domestic returns for your customers. Setting expectations before they make the purchase is key: 83% of buyers read return policies before purchasing.
Learn from Our Latin American Shipping Lessons
SkyPostal has been shipping to Latin America for decades. In that time, we’ve helped many companies overcome their e-commerce shipping mistakes and become successful in the region.
If you’re looking sell to any part of Latin America, you can trust our specialized knowledge and experience. Contact us today to see how our costs and service will make shipping to Latin America a lucrative reality for your company.