Global eCommerce considerations for retailers shipping abroad
Thanks to the wide reaches of the Web, retailers no longer need to abide by national boundaries. Global eCommerce allows merchants to extend their reach beyond the seven seas to all four corners of the globe, engaging new markets and demographics. This translates into more sales, a bigger customer base, increased revenue and (most importantly) bigger profits.
Or at least, that’s what many retailers think when they consider the prospect of selling their goods in foreign territories. For what it’s worth, those are all realistic benefits operating abroad, but it’s seldom as easy to achieve those goals.
The fact of the matter is that global order fulfillment often opens a whole new list of challenges for many retailers. Domestic order fulfillment is already a significant obstacle for merchants to subvert, with many employing best practices to pick, pack and fill orders in a timely, cost-efficient manner. Although the prospect of global eCommerce may sound appealing, there is no denying that order fulfillment will test the abilities of even the most tech-savvy and organized retailers.
Order Fulfillment Obstacles
As retailers shift their focus to global eCommerce, they’re bound to encounter a number of challenges. This starts with trying to determine whether merchants want to utilize domestic distribution centers, foreign warehouses or some combination of the two.
Both options present major interference. Merchants can benefit from domestic distribution centers because they often carry lower operating costs. As retailers already own these distribution centers, they can easily pick, pack and ship orders as they normally would for local purchases. International shipments, however, can be quite costly. Regardless of where an item is being delivered from in the United States, those are expenses that merchants will either have to eat or pass on to the customer.
Uwe Blad, vice president of international business development firm Hermes, noted another big obstacle: time. One of the notable pain points of shopping online is waiting for an item to arrive – that’s why many merchants have implemented next-day shipping or in-store pickup.
“Customers are used to receiving shipments in two to three days,” Blad wrote in a column for Multichannel Merchant. “Shipping internationally means a typical wait time of at least five business days. If the product is not acceptable when it arrives, the issue of return international shipping charges arises. Very few U.S. companies accept international returns free of charge.”
Foreign, distribution centers are also not a slam dunk option either. First and foremost, that can result in retailers having to make significant overseas investments. If their expansionary plans don’t pan out, they may take some major losses.
Overseas warehouses and distribution centers also add another kink to order fulfillment and order routing. Retailers need to ensure purchases are being sent to the right distribution center to optimize fulfillment. The more bases of operations retailers have, the greater coordination is needed to ensure people are getting their orders promptly, all while making sure inventory levels are adequate across all channels.
Some merchants may want to consider using drop shippers and other distribution centers to help fulfill international orders. For example, Fulfillment by Amazon International can help retailers capitalize on global eCommerce while leaving the heavy lifting up to another known quantity in the retail space.
The Internet gives retailers a tremendous ability to expand their reach, but it’s crucial to remember that international order fulfillment create new complications. As businesses expand, they’ll need to carefully consider the right course of action.