Understanding the Challenges in Cross Border Fulfilment
What is Cross Border Fulfilment in Ecommerce?
When a company sells products internationally, they are considered cross-border eCommerce. A business needs an effective strategy for fulfillment and shipping before selling its product abroad.
In the last decade, global eCommerce has skyrocketed. This means that more and more consumers are buying their goods online from international merchants. To capitalize on this phenomenon, companies of all sizes need to implement cross-border shipping.
It’s essential to know the culture of your destination country and how it differs from your own. Find a partner who can help you navigate those differences and offer competitive rates for shipping that will keep costs down.
Before Launching Cross Border Fulfilment – Know Your Market
International shipping and fulfillment are beneficial because it opens up new markets. Once an online retailer has reached a certain threshold of domestic sales, they can start looking into untapped international audiences that have not been able to buy from them before.
To start a cross-border fulfillment and strategy, you need to know the market and plan your supply chain accordingly.
Questions to consider to get to know your market better:
- Who is buying your product?
- What other products in your area do you think customers will compare yours to?
- What are your goals for this company?
- How does your new target market customer expect eCommerce to work?
- Where will you focus your business?
- What are the most common challenges companies face when shipping across borders?
- When will your website start offering currency conversion for international orders?
- What is your international pricing strategy for emerging markets?
- Are your international shipping times going to be too long for your customers?
- How can you improve your eCommerce strategy?
- What are your costs for acquiring customers in the target market?
- When you choose where to store your inventory, what is the difference between a domestic and international warehouse?
- Do you need cross-border fulfillment services?
- FBA can help you reach international audiences.
- How will the new import duties affect your supply chain?
Hiring warehouse employees and investing in faster shipping methods can also help with cost savings.
Hire an Expert Fulfillment Partner to Navigate Cross border Trade Regulations
Customs compliance is crucial for any company with international trade. Without it, you are risking hefty fines and the possibility of your products being held up at customs or having to pay tons in extra fees when importing exporting goods.
When shipping goods across country lines, they must be documented correctly. There are some similarities between countries, but everyone is different.
For example, the de minimis threshold is a set price in some countries. However, this value varies from country to country, and if you know your product’s retail price, it will make a big difference when calculating duty fees. The shipper you choose can also affect how much of an impact the de minimis has on certain products.
This year, through the USMCA agreement between the US, Mexico, and Canada (a trading update from NAFTA), import fees for goods coming into North America are a little less expensive. This encourages more trade because sending an item across borders is cheaper.
Other international rules that may apply to specific products and countries include:
- Permits and licensing
- When marketing products internationally, it is important to consider language and how words can be translated.
- In food and health standards, the safety of both people consuming a product and those producing it is essential.
- Importer of record
Getting Interested from International Customers? Solidify Your Shipping Strategy
In the last five years, there has been a lot of growth in global trade. This means that smaller companies and emerging markets can now take advantage of infrastructure built by larger companies to ship their products.
It would help find your company’s correct shipping and fulfillment strategy to achieve cross-border fulfillment. If you don’t, customers will see high transportation costs at checkout, leading them to abandon their cart or purchase more minor than they would have otherwise.
It is a common misconception that all sellers can sell to customers outside of their country. If you have smaller average order values, it doesn’t make sense for your business model because the shipping costs would be too high and could result in lost sales. You should consider how much profit margin there will be before setting up an international eCommerce store.
Before choosing a carrier, you need to do your research. The new USMCA agreement has different rates for goods imported into Canada and Mexico, depending on the selected provider. When analyzing options, it’s helpful to have someone with experience in this field negotiate competitive prices.
There are two options for handling duty and tax fees. One is the DDP, which means that you pay all of those costs before your product reaches the border, so it does not come as a surprise to your customer. The other option is DAP, where customs will be paid once they receive their package, but shipping may delay.
Tracking international costs can give you a better idea of how much your transportation costs throughout different seasons and volumes. With e-commerce analytics knowledge, we know what we’ve spent historically, so when it comes time to make changes by switching carriers or negotiating rates with freight companies, cross-comparison will be more easily made.
Having a professional on your side who has experience in the field is critical. A 3PL fulfillment provider or an experienced shipping expert can help with all of your eCommerce needs. Alternatively, you could work with a third-party trade broker to set up some processes where they know customs and carriers.
Conclusion: The Best Ways to Implement Cross border Fulfilment in Ecommerce
Shipping internationally can be a challenge because of every country’s different regulations and rules. It is essential to know these to avoid getting stuck with unexpected fees or delays.
An experienced 3PL will have the resources and knowledge to help you ship your products internationally. They may even be able to offer great rates on shipping, which is a definite plus.
Finding the right 3PL is the key to success. They will know what has been working in your company and how they can mirror that for new markets you want to expand into. Above all, if you find the perfect fit, they will be an invaluable partner as your brand grows.
About the Author
Brian Tu is the Chief Revenue Officer at DCL Logistics, a modern 3PL with 40 years of operational expertise. We provide brands with an array of fulfillment servicetoan scales without sacrificing flexibility or customer satisfaction. Our best-in-class service platform gives customers complete visibility and control over their orders to track inventory levels, returns, etc., all in one cloud-based system.
Brian Tu is the Chief Revenue Officer at DCL Logistics. They provide various services for business-to-retail fulfillment, direct-to-consumer fulfillment, and other value-added services. The company has been in operation since 1985.