If you’re an e-commerce business that is beginning to craft a cross-border strategy for selling goods internationally, shipping and logistics will inevitably be on the list as a challenge to tackle. In order to create a logistics strategy that is most profitable and successful for your international e-commerce business, it will need to include cost-effective methods of delivering goods to consumers that match their expectations.
The myriad factors that go into cross-border shipping can appear daunting and overwhelming at first, but they don’t have to be. Keep these best practices and considerations in mind when devising your cross-border shipping strategy. You’ll be able to jump the hurdles faster and with ease.
The fact is you’ll likely have an easier time shipping into and within some countries compared to others depending on the local infrastructure. In some regions shipping infrastructure will be more developed than others, so you will need to do some research to understand the inner workings in each market. It is important, however, to consider offering global customers on your site multiple shipping options to choose from. And different markets have different expectations for the types of shopping options they expect to be available. A recent report that surveyed the 11 top global markets revealed the popularity of different shipping options (Express, Standard, Free Shipping, Over Night, etc.) across different countries. It is surprising to note how consumers in different countries have varying expectations for which shipping options are offered as well as delivery times for each option. It is important to analyze data like this to inform the shipping methods your e-commerce site can offer consumers in different locales or regions.
Many customers will want to choose the “cheap and easy” shipping option, so explore using multiple carriers that can provide services minimizing cost and improving speed. Some carriers can provide last-mile delivery to areas others cannot – and these carriers aren’t necessarily the most well known and will vary in different countries. Some of the lesser-known carriers may offer speedy service at lower prices than larger global carriers. Minimizing costs for customers can be achieved by providing options like standard and free shipping. Even though the customer may want the item overnight, the costs could be prohibitive. Offering two- or three-day shipping at more affordable prices can help the customer decide how they want to balance the cost of shipping with their desired delivery speed.
To stay competitive, you’ll likely have to offer free shipping to some regions, but making money off that model can be tricky. There are a number of ways to offset the cost of free shipping on your website to protect your margins. Many retailers set minimum dollar value for orders to take advantage of free shipping. In your domestic market, this minimum value could be lower because the cost of shipping is less. In international markets, you can set the minimum threshold much higher to make free shipping profitable. Also, free shipping is a baseline expectation in certain markets, but not always in other markets. Research each market your business is shipping to see how important free shipping is to consumers there. You can adjust minimum order thresholds in different markets to offset costs, or you can offer flat rate shipping in other markets where free shipping might not be profitable. Another option is to offer free shipping on certain products available on your site, such as smaller items, but then charge shipping for oversize products and goods that are more costly to ship. In some cases, retailers may decide to increase prices on products slightly to cover the cost of free shipping at checkout.
You can test different shipping options for various markets to see how shoppers respond in those regions. This data will help you steer your cross-border shipping strategy and better understand what customers in those regions want. You can A/B test the carrier service you offer and different shipping methods to boost conversion rates.
You can also A/B test wording on your website to reach customers in local areas where terminology may be different. For example, words such as “express” or “standard” might not be the way consumers in other countries understand shipping methods (even in countries with the same primary language). When you test nomenclature of shipping options on your site you’ll discover what resonates with your international customers so that they know exactly what kind of shipping option they are choosing for their order delivery.
The customers you have in your country of origin may have different expectations of what is considered reasonably priced shipping or speedy service. Research has shown that, compared with other markets, that consumers in South Korea, China and India have the highest expectations for cost-effective (free) shipping and speed of delivery. Conversely, in Brazil, Canada, Australia and the US, consumers had the lowest expectations for delivery speed, which may be related to the longer travel distances within those countries.
International retailers would do well to look into the potential hurdles in the regulation of any products they sell into specific regions. There are several cases where certain products cannot be imported into some countries. Also, if your products aren’t appropriately classified, or harmonized, then issues can arise with calculating accurate duties and taxes or with clearing customs, which will hold up shipping and delivery. Make sure your business takes these factors into account so that final delivery of the order adheres to any delivery windows you message on your website. Providing an exceptional shopping experience for your customer through to the last mile when they receive the product can influence whether they are a one-time buyer or become a repeat customer.
Moving through each of these best practices can help you devise a winning cross-border shipping strategy, and there are plenty of tools out there that can make it easier, too. The right cross-border e-commerce platform can help your e-commerce business automate and execute a shipping strategy that works for your brand and helps your cross-border business take off. A tool that can automate and centralize the management and configuration of shipping lanes between dozens of countries is the only way to reduce the stress around international shipping and approach it with ease.
Juliana Pereira is VP Marketing at Flow Commerce, a next-generation cross-border e-commerce solution helping brands and retailers sell products to global customers.