The key benefit of creating a global shipping program is obvious: more markets = more profits. But is it actually worth the effort?
When it comes to the problems with building a global shipping program, we’ve heard it all:
- It’s expensive
- International customers are demanding
- Our products are restricted
- We can’t figure out customs
Ultimately, it comes down to having more rules and regulations to abide by compared to domestic shipping. Plus, the overall hassle creating new order management processes for an international business model.
But in reality, those are not good enough reasons to avoid shipping your products cross-border. Let’s discuss why this is the case.
1. Your customers want global shipping capabilities
You have the supply, but is there demand? Survey says: Yes.
The Pitney Bowes 2017 Global Ecommerce Study found that 70% of online shoppers shop internationally. And in a study by DHL, they found that every 7th online purchase is now a cross border transaction.
Simply put, customers want you to have a global shipping program. And the demand is only growing.
Forrester reports that cross-border shipping will make up 20% of ecommerce by 2022, with sales equaling $627 billion.
This is in part because ecommerce giants, like Rakuten in Japan and Flipkart in India, are rapidly introducing new populations and markets to online shopping.
Familiarity with ecommerce, along with streamlined payments processes, mean more and more global consumers feel comfortable shopping online.
If you’re curious about expanding into a new international market, you can first head over to Export.gov. Here you can see frequently-updated overview of economic conditions in the country or region where you’re planning to sell.
2. Your competitors are offering global shipping
In a study by DHL that surveyed 1,800 retailers, 71% of said they expected their cross-border sales share to increase this year.
Pitney Bowes also found that one-third of the 1,200 online retailers surveyed considered international selling their top growth lever.
In the same report, 93% percent of online merchants either already offered cross-border shipping or planned to by 2019.
And for U.S. merchants, going international makes sense because the U.S. share of global ecommerce sales is steadily decreasing as new markets emerge.
4 Essential Global Shipping Tips for 2021 🌎
- Determine demand for your products – If you already have a large number of requests from customers around the world, start shipping items in those requested countries first. Otherwise, look at where your competitors currently ship to, if you need another place to start.
- Complete your customs paperwork correctly – A major reason why a cross-border shipment may be delayed in customs is due to inaccurate information or an incomplete description of goods on the commercial invoice or other documents like a Certificate of Origin.
- Know your important country’s customs and compliance laws – Many countries abroad have weight and size limits. Exceeding these limitations is another reason why delivery can get delayed or rejected. Additionally, some countries require specific customs documentation, particularly for duty free claims.
- Calculate landing cost, in advance, if possible – Neither you nor your customer wants to be hit by surprise fees. The key to avoiding this is by calculating landed cost, or the total international shipping cost including transportation charges, duties, and taxes. Duties and tax calculations, including value added tax (VAT), will be based on the value of your goods.
3. You’re sitting on rich customer data
The key to your first cross-border market may be hiding out in your website’s analytics right now.
According to the same DHL report, more than 1 in 4 of shopping websites in Europe have significant global traffic. This is even true in smaller, less-connected markets such as Ireland or Croatia.
By analyzing your website traffic, you can begin crafting an international shipping strategy that’s both data driven and friendly to your bottom line.
4. Global shipping programs are becoming cheaper and easier
When we talk to ecommerce merchants about international shipping two major concerns crop up over and over again: the cost and the hassle.
When in the U.S. you may be accustomed to shipping a parcel coast-to-coast for a few dollars, international shipping costs can appear staggering. And that’s without the addition of customs and duties.
Further, unless you’ve nailed down relationships with carriers and providing package tracking, your items can slip into a sort of a transit black box. When this happens, your customer is more than likely to have a negative online experience with your business. And that can prevent them from being repeat buyers.
Fortunately, as cross-border commerce becomes more common, carriers are meeting the needs of both ecommerce sellers and customers.
5. International shipping is becoming more profitable
According to Statista, the average order value of an international is 17% higher than an average domestic sale.
Further, DHL’s survey found that around 20% of cross-border purchases were worth over $200 USD. This is nearly $50 more than the average international sale.
Perhaps savviness around shipping charges has your international customers demanding more bang from their buck in each transaction.
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