International eCommerce 0.2

So you’ve got a thorough understanding of the advantages of international eCommerce, but how do you deal with the problems that arise, and how do you prevent them from happening in the first place?

For starters, let’s identify a few of the challenges.

Overcoming Customer Fears

The biggest challenge with international eCommerce is dealing with customers’ fears as they consider making a purchase from your company. Understanding these fears is essential to succeeding in online commerce.

Here are a few of the across-the-board fears consumers face globally and what you can do to assuage them:

• Fear of Fraud and Identity Theft: Nearly seven out of ten (69%) cross-border online shoppers cite fear of identity theft and fraud as the main deterrent against making a cross-border online payment. On a broader scale, 77% of people simply “do not feel completely safe” when buying goods online.

• Lack of Buyer Protection: 88% of cross-border online shoppers believe that buyer protection is important or very important when making an overseas online purchase, with the highest response rates from shoppers in emerging markets.

• Fear of Unreliability: 12% of buyers feel that the store won’t take good care of them if there is a problem.

To assuage these fears, your company needs to tackle them head-on in an appealing way.

Offer hassle-free, excellent return policies to combat the fear of reliability.

In UPS’ Pulse of the Online Shopper study, 82% of online shoppers said they would complete a purchase online if they could return the product for free in-store or with a prepaid label.

Shockingly, only 32 percent of the Top 500 retailers offer some form of omnichannel or store-based return.

Retailers miss a massive opportunity to drive customer satisfaction and additional sales by not suggesting a return-to-store option.

The simplest fix that nearly any online retailer can implement is to start printing return labels and putting them in the outbound shipment. Way to combat your customers’ fears. They’re going to love your company for this.

Shipping

For any e-commerce retailers, shipping is one of the biggest and most pressing business concerns.

Modern consumers are accustomed to instant gratification when they shop on their computer or mobile device, and they expect the companies they patronize to send out their orders just as quickly.

This puts a lot of pressure on companies to streamline their order fulfillment and delivery processes — while still keeping costs low for customers.

"When it comes to customer loyalty, shipping speeds and costs are more important than ever," said Tom Caporaso, CEO of Clarus Commerce, a provider of e-commerce and subscription commerce solutions. "Most shoppers still choose 'free' over 'fast,' but with a growing number of retail outlets — Amazon, eBay, and others — now combining those options, retailers of all sizes have to find ways to cater to every customer's interests."

• Choose products wisely. Not everything that a retailer sells is a good candidate for international trade.

• Understand Country-Specific Regulations.

• Know Shipping Costs. If you’re sending a t-shirt from Los Angeles to Tokyo, all you have to worry about is a flat-rate shipping cost. If you’re sending a guitar from the middle of Kansas to Dubai, however, you’re going to have to research and customize your shipping order.

• Fulfillment Centers. Hiring a fulfillment service like Fulfillment by Amazon, Shipwire, or many others to manage international orders can save you a month of headaches and countless time that you could be using elsewhere in your business to create content, products and services.

• Shipping Vendors. When you first start your business, you may have a small enough sales volume that you can just rely on FedEx or UPS to handle all your shipping needs. As you grow, however, you'll likely want to look into multistep and vendor shipping options to get your deliveries out faster.

• Understand Tariff Codes. Tariff Codes are the Harmonized System Codes, or HS Codes, used by the International Trade Commission (ITC) to classify all outgoing and incoming shipments. They are required for each international shipment. The USPS, FedEx, UPS, DHL, and other carriers require that you classify each parcel's item with a Tariff Code, or HS Code as they're known. These are just one of the many parameters required on customs forms. While Tariff Codes are one of the many headaches that a fulfillment center can manage for you, it’s a good idea for you to understand what they are and whether or not your fulfillment center is managing them for you properly. 

Optimizing with Subscription

Recent years have seen the creation of many incredibly successful eCommerce businesses providing either a service or a physical product on a subscription basis rather than for a single fee for purchase.

Founded just five years ago in 2011, The Dollar Shave Club, a prime example of a subscription-based eCommerce site, is now worth an astounding $615 million. From zilch to $615 million dollars in five years. Just selling razors. Not bad for five-years-work.

All kinds of industries are ripe for disruption by successful subscription-based eCommerce sites. And taking a glance at economy-wide trends, it's clear this trend is set to continue.

Millennials especially are increasingly interested in spreading costs via subscriptions rather than make single big ticket purchase.

People in their twenties today have average incomes higher than those in their twenties did two decades ago, and disposable incomes a third higher than the same age bracket did twenty years ago.

However, the sum of their assets is far lower than that of other demographics, and lower than their parent's wealth when they were in their twenties.

Thus the emergence of subscription services that can be at times pricey, yet still affordable for the average millennial’s salary.

As a millennial myself, my friends and I happily subscribe to a myriad of subscription-based products/services, i.e. ClassPass, Spotify, Netflix. But most of us aren’t ready to drop money on a house.

A combination of both subscription and eCommerce platforms can work wonders, as in the example of the beauty product subscription service, Birchbox.

In this Forbes article, co-founder Katia Beauchamp talks about how adding an eCommerce platform to their subscription service became the difference between succeeding and failing with in a highly competitive industry. 

Check out the first part of this series if you missed here. If your company is looking into international ecommerce and for professional advice, contact 10twelve today.