It’s never too early to think about revamping your international shipping preparation for the new year. January can often bring new laws and tariffs, along with rate hike increases from the U.S. Postal Service and other carriers. That make this month right after the new year the perfect time to ensure that your international shipping preparation is in fine form—and avoid any surprise costs or delays in early 2019.
New Year, New International Shipping Strategy
For most e-commerce retailers, November and December are crucial selling times. This season is when many businesses break even for the year, or better. According to The Balance, that’s where the name “Black Friday” comes from: it marks the day when most stores get into the “black.”
But all of those online holiday sales can mean shipping trouble in the new year: the dreaded customer return. On January 3, 2018, UPS processed 1.3 million returns alone—earning that date the official title of National Returns Day. Forbes even referred to post-holiday e-commerce returns as a “ticking time bomb” because of their costly impact on unprepared businesses.
International shipping only further complicates returns. Chances are, customers already waited longer for the package compared to brick-and-mortar or in-country e-commerce purchases. Then there are higher costs and customs policies to deal with. Excessive returns can quickly take a business from the black back to the red.
So while the beginning of the year may represent a lull in sales for many businesses, there’s often pressure on e-commerce business logistics teams to handle return shipping. By addressing international shipping preparation prior to the first few months of the year, businesses can potentially set themselves up for success for the whole upcoming year.
The ABCs of International Shipping Preparation
International shipping preparation begins before you even make the sale. From your return policies to the shipping choices your logistics providers give your customers, there are many decisions that go into determining and adjusting the shipping process.
On one hand, you need to meet the expectations of your international e-commerce audience. That involves having a clearly outlined shipping and return policy for domestic and international consumers. Your customers need to know who’s responsible for paying return shipping costs before they buy. With over a quarter of online buyers expecting free return shipping, you risk losing customers to other retailers by not having convenient, well-laid out policies.
On the other hand, you need to have the logistics in place to handle your highest volume outbound and return shipping. For small e-commerce businesses looking to grow in the new year, it may be time to switch from in-house fulfillment and shipping processes to a fulfillment center.
In addition, for international shipping preparation, there’s a certain level of due diligence necessary to ensure your business stays up-to-date on regulations and customer trends in each country you sell your goods. Are you missing opportunities in certain countries if you don’t properly localize your marketing and shipping?
For example, while the holiday gift season in the United States ends after Christmas, in Latin America many countries celebrate the gift-giving portion of the holidays on January 6, known as Epiphany or the Feast of the Three Kings. So if you sell to customers in Mexico, your holiday seasonal rush may not end on December 25. Extending sales or offering country-specific promotions during this period could go a long way in boosting revenue at the beginning of the year.
The January uptick in returns, particularly for e-commerce companies, makes now the perfect time to re-evaluate your international shipping preparation to address three crucial elements:
With Amazon driving more and more companies in the e-commerce space to adopt free shipping policies, it’s a good idea to see whether shipping is cutting into your profits, and by how much. Rising shipping costs at many couriers (thanks in large part to rising energy costs) are calling free and reduced shipping policies into question.
What’s the real cost of your international shipping, including returns and packages that fail to get through customs? Auditing this part of your business early in the year gives you time to adjust your policies before the next holiday season. It’s also important to take into account the competition and gauge whether changing your shipping policies could significantly affect purchase volume by driving customers to other e-commerce retailers selling similar items. Offering different types of incentives to foster customer loyalty (social media contests, loyal customer benefits, free gifts with purchase) is one way to mitigate this risk.
Ultimately, shipping is a customer experience issue. The shipping options you provide determine how quickly customers get their package, the cost to get it there, and the hoops customers have to jump through to receive it. Details like how you handle duties can make a big difference in the overall customer experience.
What’s your customer experience like when it comes to shipping? Do you handle all the paperwork and fees or is the burden placed on the consumer? Are returns frustrating? Do shoppers abandon carts because they can’t find your return policy? Are your international shipping options meeting the needs of all consumers?
When it comes to international shipping preparation, efficiency is the name of the game. From the details like correctly written foreign addresses and understanding what items can be shipped across the border, to the big things like where you place your fulfillment centers, optimizing for efficiency can reduce costs and frustrations.
Has your business grown in the past year? Are you doing business in new countries? Ensuring the efficiency of your shipping operation can turn a cost center into a profit-enablement center. This also means streamlined, convenient customer service - including having in-country call centers to offer timely assistance in the local language.
By taking the time to answer these questions for your business every year, you can keep your shipping costs in check and your customers happy.
5 International Shipping Preparation Tips
Here are five things that every e-commerce company should review for improved international shipping preparation ahead of the new year.
Your International Address Formats
Shipping internationally means dealing with foreign address formats. Postal addresses work very differently in Latin American countries, for example, which often rely on landmarks or cross streets instead of zip codes. Others require that special identification numbers be included for the citizen receiving the shipment.
It’s estimated that failed deliveries due to incorrect addresses cost up to $85.00 per package in loss costs. Find a local partner or a logistics provider with expertise in the countries you ship to who can help you correctly format addresses for each location.
Your International Returns Policy
As we’ve discussed, returns can be a drag on your profits and a headache for your international customers. Make sure you have a clear return policy, for starters.
But, especially for international shipments, make sure you’re doing everything to fulfill orders accurately and giving your customers as much information about the products as possible. Clear, detailed product images are helpful. If you sell clothing, for example, having accurate sizing guides can help reduce the number of returns you have to process (and pay for).
Your Fulfillment Center Location
If you do a large enough volume of shipping abroad, it may make sense to use a fulfillment center closer to the target country. For example, if your business is located in Illinois, but you do a lot of business in Colombia, you can save on shipping costs and time by using a fulfillment center in Florida.
Shipping Cost Changes
It seems like shipping costs go up every year. Check with your logistics provider to see if the rate schedule is changing in the new year. You may need to shop around for a new provider, especially for international shipping. High costs can keep international customers away, driving them into the arms of local competitors.
Each Country’s Tariff Changes
The year 2018 saw a lot of volatility with tariffs and free trade agreements between the United States and other countries. Billions of dollars’ worth of tariffs have been slapped on traded goods between China and the U.S., and the North American Free Trade Agreement has been renegotiated. All of that could have an impact on your ability to ship goods.
Some tax changes may be beneficial, however. Mexico, for example, is considering reducing the Value Added Tax in the border region between the United States and Mexico. The drop from 16% to 8% is intended to encourage trade between the two countries.
International Shipping to Latin America
While people tend to talk about Latin America as a whole, there’s a lot of variability from country to country. Tariff rates, consumer tastes, and customs that dictate business interactions vary widely.
If you’re thinking about shipping to Latin America, your best bet is to partner with a logistics provider with experience shipping to each country you’re selling in. SkyPostal has been shipping to countries across Latin America for decades. With trusted shipping partners in each country, SkyPostal can help ensure your customers receive their packages on time and on budget.
If you’d like SkyPostal to make shipping to Latin America possible for your business, let us know today. Our logistics experts can help make breaking into Latin American markets in 2019 a reality, whether you need parcel services, fulfillment services, return services, or even direct mail.