Don't worry, one of them isn't pirates - we just loved that image!
Welcome to our practical guide to winning at international shipping for eCommerce. You've put together an amazing product range, and from London to New York, Australia to New Zealand and pretty much everywhere in between your website is getting a steady flow of visitors. Now comes the final hurdle: getting those orders out to your customers safely, swiftly, and at low cost.
For any eCommerce seller, shipping overseas demands careful thought. After all, you don't want your profit margins to be eaten away by needlessly high transit costs, a large volume of damaged returns, or a barrage of negative reviews triggered by delivery issues.
Your shipping strategy is a vital element for the success of your business, and to help you get it right, here we'll take a look at some of the biggest international shipping-related issues and how you should approach them.
1. Setting the appropriate shipping price rates for international deliveries
When working out your shipping strategy, you need to make sure you get your international shipping rates just right. Set them too low, and you can end up out of pocket; set them too high, and you risk putting off potential customers. How do you find the sweet spot?
Consider setting flat rates for each country
Where customer orders are roughly the same size and weight, setting a flat rate for each country can be the most straightforward way of dealing with international shipping.
To do this, you'll need to first establish your typical order weight. Let's say you have 20 items in your product inventory, and you've worked out that the average boxed weight of a single product is 550 grams. Then, looking back at your order history, you can see that your customers on average buy 1.5 items per order. This would mean that your average order weight which is 0.55kg x 1.5 is 825 grams.
Armed with this information, you should now contact your chosen carrier to find out their charges for shipping an item of that weight to each of the countries you intend to ship to. You can then set up your online store so that the relevant shipping rates for customers is applied automatically during the checkout process, based on their location.
Using this method can mean that for some orders you can lose a small amount of profit margin, but the overall end result is a shipping pricing structure that is much easier for the customer to understand, and ensures no nasty surprises during checkout.
Alternatives to flat rates
If you sell an eclectic range of products, perhaps ranging from t-shirts to garden furniture, standard shipping rates across your store can result in many customers being substantially under or overcharged for shipping.
To deal with this, consider setting up specific rates for each broad category, or alternatively, set up real-time shipping quotes that link up directly to your carrier (if your website or eCommerce platform enables it).
Some examples of shipping carrier apps are linked below
Shopify - famous for it's open API structure and solid stability, visit their app store for a expansive range of apps for integration with your preferred carrier.
WooCommerce - big list of shipping carrier extensions available, including Ship Station, UPS, USPS, Royal Mail, TNT and more. Not all plugins are made equal, so be sure to use officially supported premium plugins on the link above to ensure reliability.
Magento 2 - Magento's been going for years, so it's safe to say you're pretty much guaranteed to have a solution available to meet your needs (just make sure you have a developer on standby, as the platform's rarely plug and play) - check out this blog for more info.
2. How to manage duty and tax issues with international shipping
Here we'll use the EU as an example, for sales outside of the EU, your products are likely to be liable for import duty once they reach their destination country. Typically, there are two ways of dealing with this:
- DDU (Delivered Duty Unpaid): buyers are responsible for duties and taxes. Commonly, they'll get a note from their local postal depot requesting payment of outstanding charges before the goods are handed over.
- DDP (Delivered Duty Paid): you're responsible for paying the duties, usually at the checkout stage. This saves your customers the hassle of dealing with customs charges but it also requires more work on your part. Without a fail-safe means of calculating duties for each country, you also run the risk of collecting the incorrect amount, and being out of pocket as a result.
Many large carriers offer DDP management services, but the fee for this will likely cut into your margins. It's for this reason that most new eCommerce stores stick with the DDU model. Once your business is established, and if customer feedback suggests that 'frictionless' delivery could be a big selling point for your market, you can always explore DDP at a later stage.
3. Choosing your carrier
If your business is relatively new, it can be tempting to make a beeline for whichever carrier offers the cheapest rates. But bear in mind that, if the carrier in question is likely to leave you with lots of unhappy customers, 'cheapest' doesn't necessarily mean 'best value'.
As you research potential carriers, look carefully at their track record, paying particular attention to reviews from other businesses. In particular, are there frequent problems with late delivery? Bare in mind that late deliveries can have significant consequences for your business: according to survey carried out by PCA Predict, 65% of businesses identified failed or late deliveries as having a significant cost to their businesses. On Top of this, if the carrier generally delivers reliably, it can become much easier for you to give accurate expected delivery dates on your website, and thus keep customer satisfaction high.
There's also a lot to be said for sticking with big-name carriers, like Hermes, Interparcel, DPD, TNT, AusPost and UPS - as these will more often than not be familiar to your customers, and might offer them reassurance that their package is in safe hands.
4. Ensure your products are adequately packaged
A top priority for any eCommerce business should be to want your shipment to arrive to the customer's door safe and sound. One way of ensuring this happens is to make sure you choose your product packaging carefully. As you consider your options, it's worth asking the following questions:
- Is it strong enough to survive the journey? For instance, for bulky, heavy items, double wall cardboard boxes are often the safest option.
- Does it help me keep carrier costs down? Just a few millimeters of unnecessary packaging bulk can mean the difference between a cheaper or more expensive carrier charge. Specialist size-maximising packaging can help you to pack more into a smaller parcel, which can, for instance, aid you in staying within small parcel or large letter charging limits.
- Does it make life easier for my dispatch team? If you're branching out internationally, the chances are that you anticipate a lot more orders. From fashion items to gizmos, pop-up mailboxes are often perfect for a growing eCommerce store. They're easy to assemble and feature a hinged lid for a premium, hassle-free 'unboxing' experience at the other end. There's also book wraps, twist wraps, and envelope mailers, which remove the need for tape or void fill ultimately speeding up the packing process.
5. Deal with returns and replacements
There will always be some customers who exercise their right to return. And in the unfortunate case where this happens, consider putting a free returns policy in place rather than putting customers through the hassle of meeting the costs themselves and then claiming them back later.
Situations like these might also benefit from the use of established carriers, as they tend to have plenty of handy drop-off points that customers can make use of. And rather than falling apart during the unboxing process, if the packaging is designed to re-seal again with ease (with a return peel and seal strip for example), then it can make life a lot easier for your customers.
The bottom line
Ultimately, it's important to remember your shipping process will have a significant impact on your customers, so you need to make sure you get it right. Offering transparent prices, easy duty and tax systems, reliable carriers, solid packaging, and efficient returns process can make all the difference in taking your business one step further. And, if you haven't yet found your ideal packaging solutions, our range is designed to meet all your eCommerce needs, helping your products to stay safe and sound during international transit, keep the costs down, and enhance your brand.
If you'd like to find out more about our range, contact us today to discuss your requirements.