The number of online shoppers in Australia has exploded over the past year, thanks to Covid-19, but if you’re not looking beyond the domestic eCommerce market for growth, you might be missing out.
Only 10% of retail sales currently occur online in Australia, compared to 20% in the wider Asia-Pacific region and 30% in the UK, according to JP Morgan. By turning on international shipping to countries such as China, the UK, the US and Canada, you can tap into a much bigger pool of online shoppers. Shippit users that ship internationally experience five times the growth of retailers that ship solely in Australia.
But while the opportunity is significant, so are the potential pitfalls. International shipping is often expensive and slow, which can eat into your profit margin and negatively impact the customer experience, and returns and customer service enquiries can be hard to manage. It’s important to make sure your business is ready to handle these challenges before opening up your online store to global customers.
Luckily, Shippit has a checklist to help you do just that. Here’s a look at some of the key questions you should consider before turning on international shipping.
What’s more important: Fast or cheap international shipping?
When it comes to making an online purchase decision, the cost and speed of shipping are two of the most important factors for consumers, so they should also be at the top of your list. But there’s often a trade-off between cheap international shipping and fast international shipping.
One way to reduce the cost of shipping is to ship products by the pallet and store them locally, rather than fulfilling individual orders from Australia. But if you don’t have an overseas warehouse or 3PL, and you’re shipping from Australia to the UK, the US, and other global markets, you’ll need to negotiate competitive rates with international carriers.
You’ll also need to think about handling fees, re-delivery charges, international returns, last-mile delivery costs, and all the other costs that can add up. With 57% of customers prepared to cancel orders if shipping costs are too high, you’ll want to make sure your full landing cost doesn’t spur a mass checkout exodus.
Providing clear information about delivery charges before purchase is also important, according to 70% of shoppers.
It’s a little more complicated when it comes to providing fast delivery, however, because there are several factors outside your control. The biggest one is customs clearance. You can avoid delays by submitting the correct paperwork and properly formatting addresses for each market.
You can bypass customs clearance altogether by storing products locally, but it probably only makes sense to do this in your biggest international markets, where you have sufficient demand for a 3PL or warehouse to be cost-effective.
Another way to speed up international shipping is by removing manual fulfilment processes with a fulfilment and shipping automation solution like Shippit. This will not only help you keep up with increased demand from international customers, but also reduce the risk of errors that can lead to delivery delays.
What else you need to know before turning on international shipping
Regulations
Before you turn on international shipping, you’ll need to make sure you understand the taxes, duties and regulations that apply to your products in overseas markets. For instance, cosmetics containing certain chemicals are banned in Europe, and baby walkers can’t be sold, advertised or imported in Canada. Make sure you do your research before jumping the gun.
Marketing
Adapting your marketing strategy to different markets is crucial. This might mean translating your product descriptions into different languages, or using different marketing channels. For example, over 33% of Chinese shoppers now solely use WeChat to purchase goods on the mobile. But it might also mean rethinking your value proposition based on what resonates with an international target audience.
Payments
Many customers will hesitate to buy from overseas sellers that don’t offer their preferred payment method, so it’s important to have the right payment processing system. Displaying prices in the local currency also increases the likelihood of conversion, but if your target countries’ currencies aren’t stable, or there are high foreign transaction fees, your prices could be affected. You’ll want to factor this into your decision about where to ship.
Returns
Offering easy returns is essential to eCommerce, since customers can’t see, touch or try-on products before purchasing, but if you’re selling internationally, the cost of a ‘no quibbles’ return policy can really add up. You’ll need to think carefully about whether you can afford to accept returns for any reason and whether you or the customer will cover the cost of postage. No matter what you decide, it’s a good idea to extend your returns window to account for longer international shipping times. At the end of the day, a clear policy will help your customers feel confident about making a purchase.
To find out if you’re ready to grow your business overseas, download Shippit’s handy international shipping checklist here.