E-commerce has made it much easier to reach a wider audience than the visibility you’ll get in a brick-and-mortar store. With one web page, you can sell to consumers around the world. In 2017, retail e-commerce sales worldwide amounted to $2.3 trillion and online retail revenues are projected to grow to $4.88 trillion U.S. dollars in 2021.
With customs forms, restrictions, and foreign addresses, it can understandably feel daunting to make the leap from selling domestically to internationally. But, the increase in sales and diversification of your audience is worth it.
Our co-founder Laura Behrens Wu recently teamed up with packaging solution company Lumi’s co-founder Jesse Genet to share tips for shipping internationally on Lumi’s YouTube channel. (Editor’s note: check out their YouTube channel for even more shipping and packaging tips.)
In this quick video, you’ll learn:
- What are Incoterms?
- What are duties and taxes?
- What should I know about insurance?
As mentioned in the video, one often-overlooked aspect of selling internationally is returns. You’ve likely already put a lot of thought into how you’ll get your packages to your customers. Will you use the local Postal Service, like the USPS, or will you choose a private carrier like DHL, FedEx, or UPS? Have you implemented an e-commerce shipping software to automate the process of filling out customs forms and figuring out duties and taxes?
Once your outbound e-commerce shipping strategy is in place, your work is not done. You’ll want to think about your returns policy for international customers and make sure it’s clearly stated on your website.
The good news is that there’s more than one way to deal with returns to ensure customers are satisfied with the experience despite being dissatisfied with the product. Here are three ways you can accept international returns.
Tip #1: Let Customers Keep the Item and Eat the Cost
Think about the products you’re shipping and the locations of international customers. If shipping is expensive due to package weight or delivery distance, you’ll need to decide for your business if it’s worth the cost of shipping the product back.
Some companies will let customers keep the product to do what they want with it and cover the cost of sending a new product. We usually see this for large, heavy, and oftentimes expensive items, like furniture or exercise equipment, that require extra care to ship.
If you opt for this route, you’ll want to do what you can to ensure customers are receiving a product they want in the first place. Make sure your product images are high-quality and accurate, provide detailed descriptions, and customer reviews. Also, take some time to audit your delivery process. If customers are regularly receiving a broken product, consider other carriers, a white-glove delivery service, more packing materials, etc.
Tip #2: Facilitate Customers Shipping Back to a Local Warehouse
Instead of shipping the product all the way back to your origin address, you can ship the product to a local warehouse for storage. Then, once you have a handful of returns, you can ship them in bulk back to the origin address at a more cost-effective rate.
Most companies like to see the product before they issue a refund, so talk to local warehouses to see if that’s something they can support. Once the warehouse employee has opened the box, he or she can pack the items into larger crates or boxes for bulk shipping.
Tip #3: Send Products Back to the Origin Address
Of course, you can always ship the product back to the origin address for faster inspection and restocking. This is a good option if you have low inventory, have a very hands-on fulfillment process, or want to see the product immediately.
Tip #4: Consider Who’s Responsible for Paying for Shipping
Finally, for all of these options think about who will pay for shipping the product back. You can pay for the return yourself, which will take away from your margins. Another option is to offer a flat rate for shipping that will typically cover most of the cost and then your business will eat any costs over that flat rate price. You can also charge your customer for shipping and either take it out of their refund amount or charge them separately.
International shipping can open up new sources of revenue for many businesses. Consider the above suggestions when creating your international shipping and return policies, then clearly display that information on your website. For more international shipping tips, check out our recent article on using shipping consolidators.
New Partner Alert! Meet Lumi.
We’d also like to take a moment to highlight our newest partner: product packaging company Lumi.
Sky-high consumer expectations are prompting businesses to think deeply about tracking notifications, returns, “unboxing,” and more—all to create a delightful customer experience. That’s why Shippo’s partnered with Lumi to help you deliver the best experience to your customers.
Through the Lumi dashboard, thousands of e-commerce brands order all the custom packaging for a perfect unboxing. Together with Shippo, you can unlock the potential of the best end-to-end customer experience for your brand. As part of the new partnership, Lumi is offering Shippo customers 10 percent off on their first order. To qualify for the promotion, you must be U.S. based and ship over 500 packages per month. Sign up here or visit their YouTube page to learn more.