International shopping is becoming a greater economic driving force than ever before. Online titans like Amazon and Alibaba offer services across the globe, and more and more companies are following in their footsteps. Businesses can now display their sites in many languages, process various forms of electronic payments, offer conveniences such as direct debit and provide great service for international customers. However, one disadvantage of global ecommerce is delivery. Although shipping is available worldwide, costs can be prohibitive.
Ecommerce Weekly claimed the U.S. Postal Service usually has the best international shipping rates for American businesses. However, the cheapest option for anything larger than an envelope starts at $12.95. If shipped via USPS, the package becomes subject to local delivery systems once it leaves the United States. This sometimes causes a huge delay in delivery. UPS handles packages at both sides, but prices to anywhere other than Canada start at $58.90.
Some companies may be tempted to pass shipping costs on to consumers, but research shows this technique is very detrimental to sales. A study by Forrester Research found that 44 percent of people who abandoned online shopping carts (that is, they added an item to their cart but did not complete the purchase) did so because of high shipping costs. Sixty-two percent of consumers always chose the cheapest shipping offered, and only 3 percent ignored the cost of shipping altogether.
The same behavior is seen worldwide. According to a study by Pitney Bowes, one-third of online shoppers have made an online payment for a product outside their country. The products themselves are the reason: 61 percent were drawn by cheaper prices, and 40 percent said online stores had better availability. Unfortunately, 62 percent of those surveyed said the cost of shipping acted as a deterrent to international shopping. Forty-eight percent did not like handling fees paid upon delivery.
How does an online business keep shipping down to a manageable cost? One could ask Fred DuBois, founder of Laptop Battery Express. According to Entrepreneur, he managed to cut his company's daily shipping expense from $500 to $250. DuBois used multiple solutions in order to continue providing free shipping on his product. Consider the following techniques when looking for ways to save on delivery:
Convince suppliers to use the company shipping account number
In his effort to lower shipping costs, DuBois convinced his four American suppliers to use his company's FedEx account number. Using the same number for supplies coming in and products going out increases a company's overall shipping volume, and a higher volume aids in negotiating lower rates. Sharing numbers also keeps shipping costs lower for suppliers.
Looking up the shipping rates of multiple companies is time-consuming, but it's an important step in finding the best deal. Different carriers may have better prices on various package sizes or favorable bulk shipping options. Don't be afraid to mention a competitor's rate, as this can encourage delivery services to try to beat that offer.
Explore trade associations and group discounts
Some professional associations provide discounts with specific delivery services. According to Entrepreneur, joining an organization can save members up to 50 percent on shipping costs. However, as Practical Ecommerce said, such savings must be weighed against the cost of membership.
Try a fulfillment service
Look into companies that handle storage, packing and shipping, recommended LemonStand. While these have potential, they don't always cut expenses. Still, the time and energy saved can be put toward making other operations more efficient.
Companies can pass savings from reduced internal shipping costs on to their international consumers. Competitive shipping should be a technique of every ecommerce business that provides its service in multiple countries and receives global payments.
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