International eCommerce Fulfillment is rapidly becoming a solution available to online stores of all sizes from fortune 500 to small business. If your basic business model involves sourcing your products overseas you should seriously consider integrating your site with automated ecommerce solutions that will allow your organization to rapidly fulfill orders directly from pick n pack facilities where your products are being developed.
Why would you want to take on the overhead or added headaches of having your products shipped to another warehouse in your local region only to turnaround and fulfill orders in timeframes similar to those that can be met by facilities abroad. Don’t get me wrong, I completely understand that there are benefits to having your products in your local nation, faster shipping times, potentially better controls in place to meet the needs of your customer service models etc.
If you do your homework and match the right solution to your needs you are well on your way to a solution that works, just make sure your current infrastructure needs are met as well as plans for growth are considered. The key to me is to keep costs minimal, whilst exceeding the expectations of your customers. If you are able to do all this through international eCommerce fulfillment and also ensure you have proper order fulfilment automation processes in place why would you not at least consider this. You have already taken the steps of having products produced overseas to your standards and requirements, the same in my humble opinion then should be considered for the purpose of fulfilment. *Note, almost 30% of Amazon ecommerce sales in the United States are being fulfilled by international companies based overseas so be warned there is an entirely new breed of competitor out there, and while customer service should still separate you, you will need to keep your costs minimal while meeting the customers needs. Yes, therein lies the dilemma.
So I decided that interviewing and discussing some hard questions in regards to International eCommerce Fulfillment with an expert in the field Michael Pakula of Box C would clarify alot of the potential misconceptions as well as allow us all to consider some different views when it comes to our eCommerce supply chains.
Until recently there were essentially two options for cross border shipping alternatives, expensive couriers or reasonably well priced options with poor transit times and equally inadequate consumer experiences. Both of which I can attest to when it comes to personal experiences with orders placed overseas.
What Box C did in Australia was to develop some outbound solutions out of China, direct to consumer, and started by offering these services to their customers, group buying companies, and effectively were shipping to consumers in Australia, New Zealand, Malaysia, Hong Kong, Singapore and UK. About 5 years ago they brought operations to the US.
I asked Michael to explain how they work out of Asia today, typically China and Hong Kong, because I felt it was important to understand how eCommerce sellers can benefit from a service of this nature. He refers to Asia as the world’s factory because they’re producing so much of the basic consumer products that we’re all either selling or using. By establishing Pick N Pack facilities in both Shenzhen China and Hong Kong they are able to offer eCommerce companies and their customers the type of western experience we have come to expect in North America.
The key difference to having these facilities in China and Hong Kong, is pricing. Something that is imperative to all eCommerce businesses, KEEPING YOUR COSTS DOWN! Depending on volume you could be looking at fulfillment costs as low as $0.35 (35 cents) per order. To those of you who are already having products produced in Asia, you need not be told this, but “working in Asia is very price efficient.” – Michael Pakula
“Every day we’re picking and packing and shipping directly to consumers in the US and over 50 countries directly.”
– Michael Pakula
The Keyword in this statement to me is “AND SHIPPING”
That said, you also have to consider that this does open up competition from others outside the US to start targeting US customers, so …
The US is obviously a key market for most sellers, and with the ability to get your product from warehouse to doorstep in as little as 3 days, it opens a competitive option to sellers everywhere to pick n pack directly from Asia.
Gone are the days of having to wait 4 to 12 weeks to have an order shipped from overseas, and those still doing this will soon find themselves needing to change their approach to international eCommerce fulfillment.
The process is simple; eCommerce businesses send their products into the warehouse. The facility will scan them into stock, effectively bringing them into the warehouse. They’re available for sale immediately.
Once an order is placed, pick and pack and the shipping process starts the same day. The tracking number is available immediately and electronically uploads back to your eCommerce Platform. Through this integration there is basically a connector between a warehouse management system and all the leading eCommerce platforms.
So once the order has been labeled effectively, Box C is a cross border carrier, and competes with the express couriers. When they arrive in the US, they clear customs and are then handed over for final mile delivery. For example in the US this may be USPS, here is a clincher for me, all shipping have local USPS labels with NO CHINA MARKINGS at all. This is a very important factor to your brand, as much as we all try not to judge a book by its cover, when you get a package that carries chinese markings on the box the experience has a funny way of feeling cheapend. I mean this is my opinion and a slightly jaded one that will change (not my opinion, but the general public’s feelings when receiving products directly out of chinese factories because this will become a far more normal occurrence.
Let’s use the example provided by Michael to convey my point a little less abruptly and more articulately.
He purchased an iPhone cable that he bought on a marketplace for $1.98, had it delivered from China to New York. It took roughly eight weeks and when it arrived in a little scrunched up packet, with chinese markings it looked like it was worth exactly $1.98. I have the same example with a smartwatch that was supposedly worth approximately $139 USD, when it arrived it too was all scrunched up and looked like it was worth no more than the iPhone cable example that Michael shared with us.
It’s all about the overall experience from the point of browsing a site to receiving the product, and of course then the loyalty programs take over, but, let’s not get into that today. When you receive a product and its scrunched up and covered in international packaging labels, it has a huge impact on the overall experience. To put it bluntly, the customer is less likely to video the unwrapping of their new product, and if they did, I think your brand may be a little embarrassed or at least should be if it’s not positively represented in the final delivery of the order.
The end customer wants to feel like they got their money’s worth. Just adding that branded packaging on the outside of your box, and ensuring the absence of international shipping labels automatically elevates your game and the overall experience from order to fulfilment. From that perspective your logistic services provider needs to provide options.
So to switch direction a little bit, we’ve talked primarily about shipping to North America, and that’s because 50% of the online orders if you exclude China from that number are based in the US. That said, if you look at it with a different lens, what you should see is 50% of the world orders excluding China are outside of the US. This to me spells OPPORTUNITY!
Let’s say I’m running an eCommerce company in the US fulfilling and shipping within the US only, theoretically the business is missing out on 50% of potential profits. I think there’s a huge opportunity there that’s being missed by a lot of ecommerce businesses. We have seen incredible lifts in sales from clients of ours who have made simple advances to fulfill international orders, and this is with existing fulfilment practices, which means significant shipping costs and delays on international orders. In short if you can fulfill international orders with reasonable shipping rates and delivery times there is significant opportunity in foreign markets to sell your products.
When discussing this with Michael he talked about some of Box C’s experiences and his recommendation was that because your basic communication is in English, consider that “A number of the key ecommerce markets are also in English”. If you’re not in Canada, target Canada, consider the UK and Australia. The reason being is that not only can you easily write ads, but you can also respond to consumers queries and answer them in their ‘mother tongue’. And that’s extremely important to your overall customer service. Tackle those key markets? Learn, then focus on your global commerce outwards from there.
I was glad that Micheals recommendation was of this nature, but also wanted to add to this, as it is something we spoke about with a good friend on a on the show Whitney Blankenship. We were talking about cross border selling and she said one of my favorite quotes, “Google translate is just not going to cut it.”
You have to think about everything experience related as well, because quite frankly every culture, not so much country but culture has different expectations. So I like to think about global expansion from a perspective of a cross cultural shopping experience. But ideally it does start with your infrastructure, and without the capability to meet the international ecommerce fulfillment requirements you will struggle to expand outward into the global marketplace.
I want to thank Michael Pakula and Box C, for thier insights and thoughts on the topic of International Ecommerce Fulfillment. For more information on thier services specifically please be sure to follow the link provided.
