Exclusive from Descartes: Making international ecommerce transparent, efficient and cost-effective

Ecommerce

Supply chain management / Ecommerce 259 Views

Exclusive from Descartes: Making international ecommerce transparent, efficient and cost-effective

Ecommerce

Supply chain management / Ecommerce 259 Views

Cross-border ecommerce provides organisations with, theoretically, a low-cost opportunity to break into new markets. Yet from the cost of air freight to the complexity of international returns plus consumer expectations for full disclosure of import tariffs at checkout, successful global ecommerce is significantly more complex than it might first appear. Johannes Panzer, Head of Industry Strategy for Ecommerce, Descartes, dives into the complexity behind making international ecommerce transparent, efficient and cost-effective.

Delighting customers

Giving customers a positive experience is the number one priority for any ecommerce business – but adding international sales to the mix raises an entire new set of challenges that should not be underestimated. According to a recent IPC survey, 93% of consumers won’t make an online purchase without visibility of the full cost of estimated import duties plus delivery. For any ecommerce retailer shipping internationally, failure to provide cost transparency – accurately, at point of purchase – will experience lost sales.

Any check-out process for goods that will be delivered outside their customs territory should, by default, use the Harmonised Item Description and Coding System to identify a product’s HS code and combine that with delivery destination to provide the full cost information consumers require to make a purchase decision.

Costs can be pre-calculated across a product category or calculated in real-time, but either way this is where retailers have to make an informed decision. Do they create a totally accurate figure using the full Import Tariff Code - quite a task, especially on a broad product portfolio? Or, do they take the less complex route of using a tariff code for the category of goods to provide an estimation of the cost for the consumer, but then accept responsibility for consuming any variance in the final cost themselves?

Whichever process you choose, providing this information at the check-out is key to ensuring the customer has the information required to confidently embark upon the purchase.

In addition, companies looking to embark on an international retail strategy should be aware of changes in the legal framework around ecommerce. Increasingly, customs territories are removing previously allowed relaxations on small, low value parcels – in attempts to address perceived tax or security risks or to protect their indigenous retail industry. In some countries this has created new customs declaration systems or mechanisms specifically for ecommerce whilst also in cases increasing the need for the supplier to be registered with the importing authorities and be responsible directly or indirectly for paying any import taxes.

Managing Complex Intralogistics

That said, with 62% of respondents confirming they had received free shipping for their most recent cross-border ecommerce purchase, the pressure is on to ensure global logistics processes are incredibly efficient. Speed of delivery is also an issue – albeit not for all products – so what is the best model?

While smaller retailers will have to rely on one-off product shipment, as volumes rise it is possible to consolidate goods into one or more pallets, reducing the overall cost. It is important to also consider the intralogistics processes and potential implications of adding international to existing domestic shipment. Clearly given the cost of international trade....

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