Opening your online retail store to international shoppers brings exciting growth opportunities. However, retailers are being held back from reaching their true potential in new markets by the very resources that are helping them get there in the first place: The traditional international fulfillment process is hurting your business, and you may not even realize it.
First, let’s break down how many retailers today fulfill orders from international customers.
- The retailer ships international orders to their vendor’s domestic export facility.
- The facility prepares the order for international shipping where customs documents and shipping labels are generated.
- The facility ships the orders to the international customers.
So what’s the problem? Retailers have to first ship international orders to an off-site facility for processing before the shipment can leave the U.S. Sure, it may seem as though it’s just an extra step in the process, but adding a domestic stop to your cross-border shipments ends up affecting your business in more ways than one.
Overall Cost Increase
When you add a domestic delivery step into the international fulfillment process, your overall profit margin is affected. Retailers have to incorporate a domestic delivery cost into product pricing or shipping rates, which may increase cost for customers. According to a survey by PayPal, retailers cite shipping cost as the number one reason a cross-border customer abandons a potential online purchase. If the price of shipping or product to high, the customer may abandon their checkout.
Delayed Delivery Time
Shipping international orders to a domestic off-site export facility adds undue delivery and processing time. The additional step increases retailers’ operational and shipping costs as well as the time it takes for customers to receive orders. According to a recent study by DHL, retailers that provided a faster shipping option grew 1.6 times faster on average than those that hadn’t offered one.
Loss of Control
Simplicity and optimization rule the fulfillment game. So when you leave final preparation to an outside export vendor, you lose control of the final touch point for your product and, ultimately, the customer experience. Losing final control increases the likelihood of error mismanagement, which creates unhappy customers.
The Solution: Ship directly to international customers from your fulfillment center
It’s possible to prepare and print customs documents and shipping labels on-site at your fulfillment center thanks to technology that exists today. With advancements in fulfillment software, you can now process both domestic and international orders together in order to reduce your transit time and cost, put you back back in control of your customer experience and data, and give you the freedom to use the carrier and rates of your choice.
With the ecommerce market moving faster than ever, it’s critical that you target which areas of your cross-border strategy you can easily improve. Streamlining your international fulfillment setup will not only strengthen your bottom line but will leave your customers happy and returning to your store for more.
This article was featured on Multichannel Merchant.