Global eCommerce Shipping Challenges and Strategies

If you don’t have a global eCommerce shipping strategy now, you’ll surely need one soon.

Growth-minded DTC brands have figured out that the buying part of global eCommerce sales is easy. Online stores and marketplaces are open to all comers and payment in any currency is possible. But global eCommerce shipping isn’t so simple. That’s why brands looking to attract more global buyers need to figure it out.

Global eCommerce Shipping Challenges

Global eCommerce fulfillment is a very different challenge than domestic eCommerce fulfillment. Not recognizing this difference is a common mistake among e-Retailers who start selling on the world stage, says Robin Meyer, the Vice President of Solutions at Transportation Insight and an international trade compliance certified eCommerce specialist.

Regulations, tariffs and customs duties add complexity. They also add risk. Even when shipping from the U.S. to Canada, it’s crucial to have the right information about the SKUs you’re selling and meet the tax and duty requirements, says Meyer.

“If they identify your brand as an offender, they're going to stay on you forever. So we want to make sure that first notice doesn't go out,” Meyer said during a recent interview on smart parcel shipping practices on Staci Americas' Unboxing Fulfillment podcast.

To add to the complexity, every country has its own rules and fees, so it’s essential to know the requirements – or work with a partner who does. Carriers like UPS provide tools for learning the regulations regarding international shipping to specific countries and territories.

Check before you ship. Sending prohibited items and shipping to certain countries or customers can land you a huge fine from the U.S. government. Shipping certain products like drones or alcohol to some countries like Saudi Arabia, can cause your shipment to be confiscated and lead to fines.

There Are Some Similarities Between Global eCommerce Shipping and Domestic

When it comes to the delivery of online purchases, international and domestic buyers care about the same things.

They want a seamless experience. That means delivery within the expected timeframe and visibility into the progress of their shipment.

When it comes to shipping internationally, transparency is key. Whether it’s free or for a fee, it’s important to notify buyers up front. No one likes being hit up for unexpected fees when their package arrives – it doesn’t matter where the buyer lives.

For that reason, Delivered Duty Paid (DDP), where duties and taxes are included in the price and handled by the shipper, is the norm. “It’s just a better experience for the customer because they don't have to worry about having to go to the post office and pay the postage due,” explains Staci Americas' Director of Transportation, Dan Galassi.

Ensuring a positive customer experience is so important that Staci Americas' customers rarely consider Delivered Duty Unpaid (DDU) where the buyer pays duties upon receipt, Galassi says.

The importance of ensuring a positive unboxing experience crosses over to every culture as well. Special wrapping and prominent branding are every bit as important with buyers in Brussels and Botswana as they are to buyers in Los Angeles.

There are some differences to be aware of when shipping abroad. Sturdy packaging that won’t damage during long transit times is important. And in the UK and EU, a plain wrap often covers elaborate packaging to disguise high-value deliveries and deter theft, according to Andrew Scanlon, Head of Sales and Marketing in the UK for Staci Group, Staci Americas' parent company.

Shippers’ Options for International eCommerce Shipping

Most American eCommerce companies use cross-border shipping, which means they ship directly to international buyers from the U.S.

Galassi estimates that 95% of Staci Americas' customers serving international buyers ship directly out of one of Staci Americas' 18 U.S. warehouses to foreign countries.

The way it works, according to Staci Americas' VP of Business Development, Scott Guilmette, is Staci Americas provides customers with different service options and costs and brands set up their shopping carts accordingly. Buyers select the desired shipping option and Staci Americas produces the documentation, packages the order and handles the shipping.

The alternative to cross-border shipping is to store inventory abroad and fulfill orders from within a country’s borders – or region in the case of the European Union. Guilmette explains that brands need sufficient volume for this to make sense economically.

There are considerable costs attached to this strategy, including the cost to move inventory abroad, as well as carrying costs to store goods.

Nevertheless, for brands with sufficient volumes in new markets having that local inventory will speed time to market by shortening the travel distance and eliminating time passing through customs.

A popular strategy for European distribution, according to Scanlon, is to locate goods in the logistics hub of the Netherlands for distribution throughout the EU. Some eCommerce companies with a concentration of orders in a certain country, like Germany, will locate there instead.

Scanlon adds that one snag caused by Brexit is that it is expensive to ship between the UK and EU. When distributing to both the UK and EU, companies are often wise to have distribution centers in each. Larger 3PLs in Europe, like Staci Group, provide options for this. Of Staci’s 78 global fulfillment centers, 60 are located across seven European countries.

Third-Party Logistics Provides Can Help Grow Revenue from New International Markets

Having a knowledgeable partner makes everything easier when shipping abroad. Global eCommerce shipping is much more complex than domestic eCommerce shipping where you can just slap a label on a box and go.

Every international shipment requires a commercial invoice and export packing list. Customs duties, taxes and licensing requirements must be determined. International carriers must be chosen and visibility into faraway shipments maintained throughout transit. There are language and currency differences. De minimus also changes from country to country. When the shipment value is lower than the de minimus, no duties or taxes are due.

It can be hard enough for online sellers who only get a few international orders to handle global eCommerce fulfillment themselves, but when daily international orders start numbering in the hundreds, outsourcing becomes a necessity.

Experience and resources are required to ensure order accuracy, maintain trade compliance and optimize shipping costs at scale.

As with domestic shipping, third-party logistics providers (3PLs) have buying power that international shippers can leverage to optimize carrier costs. 3PLs with multiple carrier partners enable aspiring global brands to reap the benefits of choosing the best carrier with the lowest rate and best shipping time for the order.

3PLs’ strong connections with international carriers facilitate communication, visibility into shipment status and clout when shipments are lost or delayed.

When it is time to open an international distribution center, a 3PL with a global network, like Staci, can ensure a seamless transition and local or regional parcel carriers to bring the plan to fruition.

Should You Stay or Should You Grow?

Whether your company is feeling the pull from customers abroad or ready to push into lucrative international eCommerce markets, know you don’t have to conquer the world all at once. Start small, market by market, and limit your product selection to standardize your shipping and reduce variability in taxes and customs duties. Most importantly, lean on experts in global eCommerce shipping and fulfillment for advice. Whether you’re considering exporting options or already selling on the world stage, talk to Staci Americas, part of the global Staci Group, to explore your next step.