For most global companies, being able to offer international shipping will always be an important component of a well-planned logistics and supply chain expansion strategy.
International shipping has many advantages, and in most cases, these advantages far outweigh the disadvantages. In a rapidly developing world–where the supply chain is truly global — e-commerce companies can no longer afford to limit their market, and the best way to reach other markets is through international shipping.
International shipping essentially eliminated geographic limitations and opened a vast window of opportunity for companies to more markets, more customers, and thus bigger revenues. It also enabled e-commerce companies to broaden and diversify their supply chains.
However, offering international shipping is not a walk in the park. Some of the major challenges will include time and money. Companies need to invest in having international shipping partners. Companies also need to spend time conducting market research, particularly if a company plans to enter another country or a new market that the company is not very familiar with.
Adjustments have to be made because every market or region could have its nuances and unique characteristics. It might seem trivial, but the culture and traditions of a certain country will also have to be considered.
Countries or regions can also have different regulations and import and taxation guidelines that companies need to consider. The paperwork and documentations involve when a company ships to another country can be daunting.
In this article, we will break down some of the more important benefits that e-commerce companies can get from international shipping as part of their logistics plan.
Benefits of international shipping for e-commerce companies
A truly global reach
As mentioned, global reach is certainly the most important benefit that an e-commerce company can get from international shipping. Shipping globally means an e-commerce company can deliver products to different countries and markets, regardless of geographical boundaries.
E-commerce companies will always look to expand their business reach and international shipping allows them to. There is value—especially for traditional brick and mortar companies—to stick to your location or specific market. However, if a company truly is looking to expand, then being able to ship your products globally is the key.
Small companies may find it costly to offer global shipping at first, but participating in the global supply chain could bring in new revenues and new markets.
Global brand awareness
New markets mean new opportunities for an e-commerce company. Having a presence in different regions is a great way to promote an e-commerce company’s products and services.
At first, an e-commerce company might be compelled to invest in marketing, since the company is coming in as a new “player.” However, a successfully crafted marketing campaign could result in future windfall profits.
Entering a market as a new player can also have benefits such as unexpected market demand and opportunities for product research and development. Many e-commerce companies learn to diversify or tweak their products depending on the preferences of “local” customers.
In most cases, global brand awareness means having a presence in different markets. The good thing about global brand awareness is brand familiarity, which is the reason that some e-commerce companies make it a point to have a presence in key markets.
In the financial industry, for example, having a presence in say, Singapore, can give all kinds of credibility for an e-commerce company simply because Singapore is a truly global location where numerous multinational companies are based.
The benefits of international shipping are all pretty tied up. Global shipping can boost sales, thus boosting revenues. Global expansion means the market becomes bigger. There might be issues on logistics and the supply chain, as each country or market is unique, but once an e-commerce company overcomes these hurdles, opportunities open up.
There will be new customers, and with careful marketing, sales can grow. Countries and markets have their own unique characteristics, but an e-commerce company can always depend on its quality products, after-sales service, on-time shipping, etc. to further strengthen its foothold in a new market.
Minimize or reduce customer sales returns
Customer returns will always be part of the supply chain, and some companies may even view these as additional challenges. One great thing about international shipping is that customers are more likely to study and review their purchases more thoroughly than say, store-bought items. This reduces the likelihood of a customer return.
One important consideration: imported products have to go through customs and border checks, and investing in a reliable shipping partner is a must.
Promote local products
It might seem a bit contradictory, but going global may also mean pushing for or marketing local products. Ecommerce companies with international shipping can introduce new products that might pique the interest of new customers, simply because these products are not found in that specific country. For many, the novelty of products is a strong selling point.
Perhaps the challenge in bringing in local products is that they might be subject to strict scrutiny from border and customs checks.
Avoid product saturation
International shipping allows e-commerce to avoid product saturation, which basically means a product might be successful, but as soon as other competing products enter the same market, product sales might be adversely affected. Sure, eCommerce will always upgrade, improve, and innovate, but innovations can also have limitations.
International shipping allows an e-commerce company to supply the same products to another market, which might not be as saturated as the company’s traditional market or turf.
Having international shipping services basically means an e-commerce company can diversify its supply chain.
Through international shipping, an e-commerce company can also boost sales of seasonal products. The seasons in one side of the world are different from the other side, but with global shipping, an e-commerce company can still market and “push” products even if they are out of season.
For an e-commerce business, expanding to new markets and having an international shipping strategy might seem like a kind of leap of faith. Some challenges need to be overcome, and issues need to be addressed. Ecommerce companies will need to conduct substantial market research to prepare them for the intricacies and preferences that a new market may demand.
From a revenue or earnings perspective, it might even be considered a gamble if a company jumps into global shipping. Investing in a global shipping partner might be costly, but could prove to be worth it in the long term. Having vast international coverage for an e-commerce company means having access to a potentially huge number of customers.
This huge customer base might also be a catalyst for a company to introduce innovations and bring back these innovations to the e-commerce company’s home country or home base.