Direct-to-consumer delivery of merchandise via e-commerce fulfillment has been a boon for the courier industry, but when the consumer is located in another country, the rules of the game change and fulfillment becomes much more complex.
Customs clearance, currency exchange rates, final-mile delivery requirements and the cost of transportation call for a level of international expertise that is usually not found in a single company.
When it comes to international e-commerce fulfillment, “Everyone in the supply chain has a slightly different part of it,” said Andrew Scott, CEO of American Worldwide Agencies in Long Beach.
Freight forwarders, third-party logistics providers, courier services and postal services play a role in international e-commerce fulfillment, but it is a rare company that pulls all of that expertise together into a single provider.
Scott calls himself an international e-commerce logistics provider, and his job is to arrange the complete international move — delivery of merchandise from U.S.-based retailers directly to the doors of consumers in Australia and New Zealand.
American Worldwide Agencies has been providing international e-commerce logistics fulfillment services for two years. Scott, a New Zealander by birth, has 25 years of experience in the logistics industry. He has been involved in start-ups, and he has worked at established firms such as DCL and the NACA Group (Vanguard).
Scott started his international e-commerce venture with a region he understands, and he is partnering with service providers down under with whom he is familiar.
Even though he has barely scratched the surface of the relatively small consumer base that Australasia has to offer, he is considering a move into the much larger European market, beginning with the United Kingdom.
Direct-to-consumer experience must be seamless
According to the publication eMarketer, global e-commerce sales last year totaled $1.2 trillion. Most of that sales volume involved domestic e-commerce. However, Scott believes there is huge latent demand for international e-commerce business, if the direct-to-consumer experience is seamless.
“The overall consumer experience is all about delivery,” he said. The consumer in Australia who places an online order with a U.S. retailer wants to be quoted a single, all-inclusive price, with the package to be delivered to the front door in three or four days. Contending with customs clearance, packing requirements or currency exchange rates is not on the consumer’s mind.
U.S. retailers have a similar view of international e-commerce fulfillment. They are just now feeling comfortable with domestic e-commerce, but most retailers are not familiar with the complexities of international e-commerce fulfillment. “They can’t just call UPS,” Scott said.
Actually, the retailer might be able to call a large courier to handle its international shipments, but the delivered cost to the overseas consumer will be so high that such sales will be limited to a narrow range of merchandise. Sales of mass consumer merchandise to overseas customers without a discounted transportation rate won’t happen, he said.
The international e-commerce logistics provider addresses that problem by taking ownership of the direct-to-consumer supply chain. U.S. retailers benefit because they don’t require brick-and-mortar warehouses, overseas customs clearance expertise or final-mile delivery capability.
American Worldwide Agencies has warehouses at LAX, Chicago O’Hare and New York JFK airports. AWA picks up the shipments from the retailers, brings them to its warehouse, provides value-added services such as labeling, if necessary, and delivers the packages to the airlines from which it has purchased space at a discounted rate.
AWA electronically files the shipping documents with its partner company in Australia and New Zealand before the package arrives. The partner knows which shipments have been cleared by local customs services, and which ones require inspection. Cleared packages are shipped in the final mile either by the national post offices or by local couriers to the consumers’ doors.
Scott said the types of merchandise ordered by Australian consumers from U.S. retailers are endless: apparel, makeup, books and DVDs, toys, sporting equipment footwear, automotive parts and collectibles, to name a few.
Consumers in Australia and New Zealand enjoy the quality and style of American products, but prices can be high. A pair of blue jeans that sells for $30 in the U.S. can cost $200 if purchased at a store in Australia.
AWA’s Australian e-commerce partner, Qannu, stated that slashing the international delivery costs on shipments sent directly to the consumer’s door in Australia is the game changer. “Saving customers 50 to 80 percent on shipping costs makes all the difference when it comes to the affordability of buying from American retailers,” said Bridget Speed, marketing director at Qannu.
Special handling needed for returns, hazardous materials
In addition to securing volume shipping discounts, AWA helps retailers develop merchandise return policies, which take on added significance for international e-commerce transactions. According to Internet Retailer, returns for all e-commerce transactions can range from 10 percent for hard goods like home products and toys to as much as 30 percent for soft goods like apparel.
AWA also alerts retailers to restrictions on goods that are considered hazardous for shipping purposes and therefore require special handling. For example, perfume is defined as a flammable product for shipping purposes.
Scott views international e-commerce as being in its infancy. U.S. retailers are beginning to realize it is a huge market, and overseas consumers who are comfortable making domestic e-commerce purchases are now ready to order internationally online.
It is therefore the job of international e-commerce service providers to make the delivery process predictable and reliable. “If it’s easy, people will keep buying,” he said.