Expanding your global shopper base requires a lot of consideration and investment when it comes to managing cross-border shipping and returns. Online sales have increased monumentally as a matter of convenience. One out of every four shoppers now uses the internet to shop.
Growing your brand is more important in 2023 than ever—learn more in The Future of Merchant Growth
There are many factors to consider regarding investing in global markets. Make sure your brand has enough reach in the countries you plan to expand to. Do your research and see what speaks to these buyers. This will give you a gauge of how this type of growth will work in the future. Collaborating with a local representative in the country you plan to ship to will give you the knowledge you need to be successful. When it comes to shipping and returns, make sure the entire process is smooth to increase confidence in your brand and increase retention.
Here are eight more ways to improve your cross-border shipping and returns experience:
1. Gather data to understand your buyers
When looking to improve cross-border shipping, gather data to find out where international shoppers looking at your website are based. One way to do this is by using social commerce, which involves shopping through social media apps. A recent Accenture study predicted that this growing revenue stream will reach $1.2 trillion by 2025, an increase from $492 billion in 2021.
Take a step back to look at analytics for your web and app shoppers, as well as your social commerce shoppers. This will give you a good idea of where to begin expanding production.
If you want to start small, pick a country close to your home base. Expanding production there will give you a small-scale idea of the issues you might face before expanding globally even further. If possible, partner with a company in that location that can advise you. They can help clue you into cultural matters, as well as any rules or regulations you might need to adhere to. They can also help with product innovation or offer insight on lowering your return rate.
2. Meet all customs requirements and taxes
When shipping items to another country, be aware of any customs requirements. Customs taxes protect a country’s economy, residents, environment and more. Missing out on important fees can mean the difference between a shopper receiving their purchase on time or not receiving it at all. Find out what documents and fees need to be sent prior to or along with the package. If possible, send all documents electronically to avoid them getting lost in the mail system. Make sure all labels including value, weight, and product descriptions are correct. If needed, contact the local imports or customs office to get all the information you need. Avoid underestimating the value of items as this can cause delays.
Most importantly, when it comes to shipping, be aware of what types of items are restricted or prohibited. This varies from country to country. For example, many don’t allow aerosols to be sent by mail. Other restricted or prohibited products could include tobacco, hemp-based products, perfumes with alcohol or even perishable items. The UPS and the USPS website offer a breakdown by country, so be sure to review this before shipping your products. Likewise, if you are sending items by boat, be aware of any tariffs, weight restrictions, or laws you must adhere to. These can sometimes be completely separate from those that apply to mailing packages.
3. Create a transparent shipping policy
On the buyer end, it’s important to think through the amount of shipping you’ll be charging them. Be sure to present costs in their local currency to make checkout smooth and efficient. You should also make sure it matches with the value of the product. Most shoppers are not likely to complete a purchase if the shipping costs more than the item itself. A survey by the Baymard Institute found that in 2020, almost 50% of cart abandonment was due to extra shipping fees and costs. Consider offering a flat rate or free shipping on orders above a certain dollar amount, which will encourage shoppers to purchase multiple items at once in order to take advantage of the shipping deal.
Create a shipping policy that provides clear language about who will be paying the taxes and dues on an item, as well as what exactly the shopper is being charged. This is key to increasing customer retention.
Be sure to offer multiple forms of payment besides credit card. Most buyers expect this as standard these days. Having options like Paypal, Venmo, Apple Pay, and Google Pay can avoid international transaction fees and are more convenient for the shopper.
4. Outsource for easier production
Outsource production where possible. For example, a pair of leather shoes might be taxed heavily when shipped. However, if they are made and shipped locally in the buyer’s market, you can avoid these fees altogether. Setting up businesses in warehouses located in the country where the order is based can help make the entire process more efficient and practical.
Utilize tools like Shopify Shipping, which provides discounted international shipping rates to merchants in the United States, Canada, and Australia.
5. Sustainability and transparency are key
More than ever, sustainability, and ethical business practices have become a high priority for consumers. Many will actively seek out brands that proudly promote high standards in these areas. As a result, many countries are implementing policies to raise sustainability standards. As you expand your company’s global reach, stay in tune with these policies or you might find yourself facing fees or legal issues.
For example, New York recently released a new bill called the Fashion Sustainability and Social Accountability Act/Fashion Act. If passed, it would require international apparel and footwear with $100 million in revenue to divulge practices, like their biggest social/environmental impact of production, worker wages, greenhouse gas emissions, and water or chemical management. Brands would then be required to provide a plan to reduce their impact.
Similarly, because marine transport (while cost-effective) is responsible for 3% of global greenhouse gas emissions, the International Maritime Organization (IMO) has released new requirements. The IMO would require ships to measure and report their carbon intensity index in an annual efficiency ratio (AER). The AER would offer data on a ship’s deadweight tonnage, the capacity it could carry, the amount and type of fuel it uses and its travel history in the past year. Using this information, ships would be rated on a grade level and would have to reach a grade level to meet compliance.
This will likely increase the cost of shipping as boats are updated or maintained in order to meet these regulations. It might also mean less frequent deliveries. Be sure to keep this in mind when using marine transport to avoid fees and delays in shipping. Use regional warehouses to avoid hold-ups. This would mean sourcing suppliers closer to your international shoppers or stores. If you have a substantial customer base in China or the U.K., for example, you could ship products from warehouses closer to these countries. It also offers additional benefits like lowering labor costs and supply chain issues.
6. Anticipate delays to avoid disappointment
During the pandemic, hold-ups in supply chains led to delays, amounting to weeks or months. Be sure to account for any anticipated issues when you offer delivery dates to shoppers. Nothing can sour your customer relationship more than a delivery date that continues to be pushed back. When possible, bulk up your inventory in case of an increase in demand. If possible, invest in local production. Loop’s Destinations integration allows you to send products to distribution centers and third-party vendors. If you use marine transport, consider bypassing larger cities, which can help avoid slowdowns.
7. Use high-quality packaging
Packaging is a key item to consider. Make sure you’re using high-quality materials that will protect your products. Investigate if insurance is needed. If it will save you on future returns and loss of revenue, it might be worth the upfront investment. There’s nothing worse than the excitement of receiving your purchase only to find out that it’s been damaged in transport.
Partner with a logistics manager who is able to recommend reliable shipping transport closer to your destination. Finding someone clued into the market you’re selling to will remove cultural barriers and boost revenue.
8. Offer easy returns with multiple options
No matter what, returns are bound to happen. A 2021 Consumer Returns in the Retail industry Report found that 20.8% ($281 billion) of online sales were returned in the US. Your return rates will need to include the cost of returning the item, and the labor and materials needed to restock it. Be sure to automate the returns process as much as possible. Offer multiple ways to return items like covering shipping costs or locations to drop off the item.
You can minimize the risk to your revenue by learning from the return and offering bonuses to the buyer rather than just a simple, straightforward return. Offer them an easy exchange if they’re simply looking for a different size or style. In order to encourage them to return for future purchases, look at their transaction history. You can gain a better understanding of their needs and suggest items that might fit their lifestyle better.
Loop offers integrations that make generating cross-border labels for customs forms easy. Book a demo today!