Sell more, optimising your international shipping: expert interview with A. Salvat
International shipping costs can be exorbitant. If you’re an international online seller, you may wonder: how to offer competitive rates to the buyer without going bust?
Small to medium-sized online sellers rarely have the resources to manage international shipping in the most cost-effective and efficient way. This contrasts with companies that ship high volumes on a daily basis, consolidating multiple shipments. This way, they are able to negotiate better rates and discounts, passing on their own lower costs to their clients.
Hence, many sellers may be better off using companies that can offer them competitive shipping rates. Additionally, such consolidators tend to have a wealth of shipping experience and extensive knowledge of shipping-related matters.
On the other hand, fulfillment centres can be beneficial if you sell your products abroad. The main advantages of fulfillment centres include competitive shipping rates and shorter shipping times.
Optimise shipping in your listings
To ensure the best shipping solutions, you must know how to optimise your listings/shipment. For example, on top of competitive shipping rates, the buyer likes multiple shipping options. According to WebInterpret’s tests…
… online sellers who offer multiple delivery options grow their active GMV by 14%.
Additionally, avoid surprising your buyers with unexpected shipping costs or they’re likely to abandon the shopping cart. One way is to offer your potential shopper the free shipping option.
- Why can unexpected shipping costs stop the buyer from placing an order?
- How to optimise shipping in your offers to increase your chances of making a sales deal?
To broach these and other questions, we talked to Adrien Salvat, a global shipping expert and the Head of the Shipping Department at WebInterpret.
Interview with Adrien Salvat
According to Statista, 56% of online buyers leave without paying when faced with unexpected costs, for example shipping costs. Can it really stop the buyer from placing an order?
Adrien: Yes, unexpected costs, shipping charges in particular, can kill any deal. Imagine this: the buyer is over the moon to have found a great deal and is happy with both the price and the product. So they’re ready to place an order.
Then comes the check-out moment. Shipping costs pop up and …the magic is gone! If you think the purchase will still be finalised, the facts here are a bit disappointing.
According to our data, as many as 48% of buyers don’t complete the purchasing process. There are two main reasons. Firstly, the overall price is too high, primarily due to shipping rates. Secondly, there aren’t enough delivery options at the check-out.
This implies that online sellers will be better off not charging the buyer shipping costs. But can they really afford to do that without going bankrupt, especially if they sell internationally?
Adrien: I wouldn’t recommend online sellers waiving shipping costs … at all costs. I wouldn’t want their profits to be ruined. A well thought out strategy, though, including a few adjustments and good shipping solutions, are key here.
Sometimes the solution is simple, especially when it comes to your domestic market. You may remove shipping costs, offering free shipping, and add them to the item price. For example, instead of asking £8 for an item and £2 for shipping (total £10), ask for £10 and say you will ship the order for free!
According to our data, 76% of UK sellers use free shipping for their domestic deliveries on marketplaces. A UK seller adds the cost of the domestic shipping to the item price, offering free shipping. It’s interesting, however, what happens in the case of international shipping.
Think about this example…An item costs £15, postage within the UK is £5 and to Germany £10. Now you’re going to add the shipping costs to the item price and offer free shipping. The item now costs £20 in the UK.
However, in the case of Germany, the item will now be pricey if you haven’t reduced the postage costs: £20 price of the item plus the £10 postage to Germany add up to a total of £30 instead of the previous £25.
The result? The order price in Germany has increased by 25%! If your product is too expensive, you can miss out on extra sales, especially during the busy Christmas season.
Adding shipping costs to the product price may make the offer costly and unattractive. So ideally, shipping charges should be close to 0, which means the seller must also pay 0 shipping costs on their end. Is that possible?
Adrien: You will always need to cover some shipping costs, but your own shipping expenses can and should be optimised. This requires a sensible and efficient shipping solution.
As to the current trend in cross border trade, sellers may want to keep their stock at home and ship from there. However, this can be very inefficient. Most international online sellers will be better off having local local fulfillment centres, close to the buyers.
So if you’re a British online merchant trading in the US, keep part of your stock in the US, close to your US customers. This will lower your shipping costs, but will also shorten delivery times and increase customer satisfaction. If you can offer your buyer great-value-for-money products and cheap and fast shipping, they will love it. They will order from you!
If you can offer your buyer great-value-for-money products and cheap and fast shipping, they will love it. They will order from you!
How does WebInterpret Shipping Service make shipping more efficient and cost-effective for global online sellers?
Adrien: The WebInterpret Shipping Solution (WISS) is a drop-shipping platform. Sellers send out their parcels to our local hub (using their own domestic delivery supplier) where we consolidate, sort and process parcels through the best carrier. It enables us to gain a certain purchasing power and gives us flexibility in the choice of the carrier. This results in deliveries being carried out in the most efficient way.
I also want to stress that WebInterpret is a software company, delivering, among other things, a tool called Listing Optimizer. It adds 2 to 3 delivery options in addition to the seller’s ones, which increases conversion at the check-out.
How does WISS stand out from similar services?
Adrien: When it comes to shipping solutions, the market is highly competitive. There are numerous shipping providers that enter fierce competition based on shipping rates.
Our approach is very different. We deliver software combined with shipping solutions, which generates added value for our online sellers. Above all, our tool helps you to grow your sales by optimising your shipping set, e.g. setting shipping rates on your listings based on the item type and destination, maximising accuracy.
The Listing Optimizer I’ve already mentioned sets a shipping rate based on the estimated weight and dimensions of the product listed. This is very innovative as a limited number of sellers provide such product information (weight and dimensions). We do it based on estimation and historical data.
Finally, our shipping flow embraces the sellers’ workflow. Sellers don’t need to do anything extra and can concentrate on their usual business activities.
How does optimising shipping in product offers increase the chances of making a sales deal?
Adrien: For starters, sellers tend to think that a good price is enough. Far from it. Shipping can actually make or break your sales deal. Your shipping offer should address various buyer expectations. Hence, offer multiple delivery options.
If the buyer expects the lowest price, they should be happy with a standard untracked postage. If the buyer needs an order urgently, they will look for a same-day or express delivery.
Or consider this. The buyer may not be around to collect the parcel at the delivery address. They may work too late to collect it from the post office. So a Pick Up Drop Off (PUDO) service will be a perfect solution in this instance.
Hence, the extra 1-day delivery option is attractive but not enough! Sellers need to think about different buyer needs and provide multiple delivery options to address those needs. Again, according to our data, online sellers who offered multiple delivery options grew their active GMV by 14%. Also, it helps to offer a better user experience as the experience matches the buyer expectation.
Can you give more examples of the benefits of shipping optimisation?
Adrien: When it comes to cross border shipping, there’s a discrepancy between the buyer’s expectations and delivery capacity. This can lead to numerous misunderstandings.
Take international shipping on eBay as an example. Sellers may not ensure that shipping providers commit to the transit time while eBay indicates an expected delivery date. Buyers in turn can get very frustrated when their order isn’t delivered on time.
Managing shipping on their own, sellers may not have complete control over delivery-related matters, e.g. not having good deals with couriers, not having the right data or not spending time on shipping settings.
WebInterpret Shipping provides an average transit time based on historical data. At WebInterpret, we try to maximise the information given to the seller and the buyer to set the right expectations before an order is placed.
Another challenge has to do with unfavourable shipping rates for online sellers. For example, you can set one rate for one region, let’s say one rate for the EU, one rate for the rest of Europe and one for the rest of the world. This would be a flat rate for all countries from a particular region.
However, it may be cheaper to ship from the UK to Germany than from the UK to Portugal. So the same rate for the two countries doesn’t add up. The flat rate is definitely not the best return-on-investment in this case. It would make more sense for you to agree on a shipping rate per country.
However, it’s not always possible and many contracts will stick to a shipping rate per region. This is what we have addressed at WebInterpret: we set shipping rates per country on the listings.
How about customer satisfaction? Shipping can be a source of lots of distress.
Adrien: Correct, if the parcel is delayed or goods get damaged in transit, you’re in trouble. The risk is much higher if the package travels from country to country or from continent to continent. There’s a lot of transportation involved!
To be on the safe side, ensure good tracking of the parcels you dispatch: provide a list of all tracking events. It will give a sense of security to the buyer, but also to yourself, e.g. when one of your packages gets damaged or lost.
The quality of tracking differs among various services. The bottom line is: if the tracking information is not provided in the case of international deliveries, customers are not satisfied. Not knowing what’s going on with their package is one of the biggest sources of distress for online buyers, sellers and couriers.
For this reason, WebInterpret offers an automated tracking tool for its customers. It’s a proactive tool that allows buyers who chose a tracked delivery option to know exactly where their parcel is located. The information is automatically sent so it’s hassle-free for both the buyer and the seller.
If the parcel is delayed or goods get damaged in transit, you’re in trouble. The risk is much higher if the package travels from country to country or from continent to continent.
What global shipping trends are you expecting in five years’ time?
Adrien: Clearly, online buyers are interested in the cheapest and fastest delivery options. The UK is a good example: this year the number of next day delivery options has exceeded the standard delivery ones (2 days or more).
When it comes to cross border trade, buyer expectations are similar. The best way to meet their expectations will be to ship items using express services. However, it’s quite expensive. Alternatively, you can go for local fulfilment in a foreign country. The latter option is cheaper and more recommended, but it requires tight inventory management and a strong local partner.
If you are interested in more information about the WebInterpret Shipping Solution, feel free to contact us at firstname.lastname@example.org
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