The growth of international ecommerce today is unmistakable—and global order fulfillment presents unique requirements for successful business. Are you up to speed on the opportunities and ready to tackle the challenges?
Retailers tap global markets
“E-commerce has transformed the global retail industry,” writes Dan Ikenson in Forbes. Online ecommerce, he says, gives U.S. retailers “ready access to billions of the world’s consumers.” According to Doug Clement (MultiChannel Merchant special report), nearly one-third of consumers polled across 40 countries say they make cross-border purchases.
Clement adds that international B2C ecommerce is predicted to have a compound annual growth rate of 25.1%, with business valued at over $3 trillion by 2028. Clement notes that the profit potential is capturing the attention of “brands and retailers of all sizes”.
International ecommerce: the business edge
“Many factors are driving growth, including logistics, mobile device ownership, and marketplace expansion,” according to Morgan Stanley. But success in global ecommerce sales hinges on putting the right order fulfillment capabilities in place. These “can be pivotal to providing service to customers and gaining a competitive edge,” according to the article.
The competitive edge of doing it right definitely translates into profits, according to Pat Diggins, Director, Strategic Accounts, FIDELITONE. “International ecommerce is more profitable for retailers, because you’re selling directly to the consumer rather than making room for distributors and wholesalers in between,” he says. Nutraceuticals and home goods are among the segments where Diggins is seeing rapid growth.
International ecommerce is also increasingly accessible to U.S. brands, he adds, because ecommerce systems are quickly building their capabilities to accept orders with consideration for converting currencies, managing multiple languages, and addressing the unique shipping and regulatory requirements of each market.
Must-haves for global fulfillment
But this is only half of the picture, according to Rick Sutphin, General Manager at the FIDELITONE Elizabethton, TN order fulfillment center. “We offer various modes of shipping and a variety of service levels,” he explains. It’s important that a global fulfillment partner offer the flexibility to work with a variety of shipping services, including UPS, FedEx, USPS, and others, as the best fit is not a one-size-fits-all, depending on client needs.
Jessica Gage, Shipping Coordinator, explains, “Shipping options depend on desired cost and speed.” She says there are options spanning from next-day service to as long as 14-21 days, depending on client preferences and customer choices. “We’re constantly looking at freight costs to provide the best-cost options for each client company we serve. The cost-savings can be astronomical sometimes,” she notes.
Duties and customs
Duties can be handled in a variety of ways for international shipments, explains Gage. She says FIDELITONE, which ships to about 200 countries today, can accommodate a variety of standardized options, including:
- Delivered Duty Unpaid (DDU), in which the seller is responsible for ensuring goods reach their destination, and the buyer pays for import duties.
- Delivered Duty Paid (DDP), in which the seller covers duties, import clearance, and any taxes.
- Delivered At-Place (DAP), in which the seller agrees to pay all costs and suffer any potential losses of moving goods sold to a specific location. Under DAP, “the seller must secure any documentation, including tallies of goods in the shipment, commercial invoicing as well as any packaging and marking related to the export of the shipment,” according to Investopedia.
- Delivery at Terminal (DAT), in which the seller pays for all expenses incurred until the place of delivery, and the buyer pays for customs clearance and taxes at the final destination.
For FIDELITONE contracts, “Our client chooses how they want to sell to customers, and we set up our processes and technologies accordingly to automate the correct documents,” explains Diggins.
Getting the commercial invoice right
To ensure international order shipments reach end customers smoothly and reliably, every “t” must be crossed and “i” dotted. For a retailer that wants to expand into international markets, manual preparation of commercial invoices is not a viable option; it’s time-consuming and error-prone.
Instead, the business choices of the seller must be configured accurately in the order fulfillment technology systems, explains Diggins—and comprehensive integration with leading ecommerce platforms is key. There are many more data fields for international ecommerce and much greater customization of tech systems, so it’s important that a global fulfillment partner provide the proper integrations to manage the data accurately. The order fulfillment technologies need to automate commercial invoices, customized to client business rules and customer selections at the time of purchase.
Above and beyond perfect paperwork is the supply chain knowledge required to troubleshoot occasional issues that come up with global shipments. “It’s not unusual for documentation to get lost in transit,” says Gage. “If that happens, I coordinate with carriers to get the paperwork over electronically and keep the shipment moving.”
Gage has also seen sudden changes in regulations as to what products are permitted entry, or a rejection of an invoice because customs officials deem the stated value as too low. The variety of players, the distance traveled, the number of touchpoints, and the unique regulatory environment of each destination country underscore the value of working with an experienced global order fulfillment partner who has the experience to resolve issues as they arise.
In addition, in the rare instance in which a carrier loses a package, FIDELITONE manages the claim with the carrier.
Package prep, SLAs
Attention to detail makes all the difference in global ecommerce. It’s not only paperwork, but packaging of shipments that counts. “From an operations standpoint, if a product is going out LTL, we prep to unique standards,” says Gage. “We make doubly sure everything is secured to pallets before leaving the dock.” For individual global shipments, FIDELITONE uses rugged, reinforced packaging to protect the parcel.
A retailer’s business requirements may vary by country. Sometimes, a product may be sold under a unique name in a different country. “We can sticker, repackage, or even change the SKU if needed,” says Diggins. “We can add a specific label for health and wellness products if required.” Serialization, lot control, and security measures to verify product authenticity are among the other special requirements Diggins sees. Sutphin, who oversees activity for variety of ecommerce clients, says, “We are adaptive to any business needs clients bring to us.”
In the industry, it's not uncommon for international ecommerce shipments to require extra time to leave the warehouse, but FIDELITONE tackles global shipments differently, says Diggins. “We value speed to consumers, and we’re holding to defined SLAs. An order leaving our fulfillment center can ship out just as quickly to an international destination as to any domestic one.” He attributes FIDELITONE’s service capabilities to its robust technologies and integration that allow for turnkey ecommerce integration and warehouse speed. As with all FIDELITONE order fulfillment services, real-time visibility into order status and SLA metrics are available in a private partner portal.
Earning customer loyalty
International ecommerce represents a burgeoning business opportunity for U.S. retailers. As with domestic sales, the ability to earn customer loyalty depends on meeting defined expectations and getting the details right. What are your global ecommerce aspirations? What challenges to you need to tackle? Get in touch; we’d love to hear.