Global Fulfillment: 3 Essential Considerations for Online Sellers
by Staci Americas on Aug 15, 2023 10:00:00 AM
Establishing successful global fulfillment is a lot like planning for a successful trip abroad. You localize for the environment you’re going into – electric converter and all. And, of course, it really helps to have a local guide.
The team at Staci Americas and its parent company, Staci Group, are guiding more and more omni-channel brands as they seek to expand into new markets. Wayne Chapman, CEO of Staci UK, talked global fulfillment on a recent episode of the Unboxing Fulfillment podcast. Catch the full episode here.
Whether you’ve made the leap into global fulfillment or are just starting to feel the pull of overseas buyers, understanding the following success factors is sure to help smooth out your global fulfillment journey.
Localize Global Fulfillment
When it comes to successfully fulfilling eCommerce orders in countries outside the U.S., the more you can make the experience feel like home for the buyer the better.
Buying from a seller in another country requires a leap of faith that they’ll deliver as promised and treat you fairly. There are so many uncertainties related to currency, duties and taxes, shipping costs, delivery times and returns. It’s a formula for cart abandonment.
The best advice is to put yourself in the buyer’s shoes, work boots or clogs as much as possible when it comes to eCommerce fulfillment internationally.
There are a lot of things to do from the buying experience perspective, like displaying prices in the country’s currency and selling culturally relevant products. These are basic.
Localizing fulfillment takes more work. Ecommerce expectations of free and fast delivery know no bounds or borders today.
The localization to aim for is local inventory that allows for 1–2-day delivery. In the UK, Staci has helped American brands go from a 5-10 day order-to-delivery cycle to delivering anywhere in the UK overnight once they relocate some inventory to one of Staci UK’s 7 warehouses in the country, according to Wayne Chapman.
“The service benefit of localizing fulfillment is unquestionable and so are certain cost efficiencies,” Chapman says. “We can be significantly more cost effective from a pick-and-pack and distribution perspective,” he says.
Naturally, online sellers also must consider inbound freight and warehousing costs, which can vary. Volume determines whether locating fulfillment in the UK makes sense, but much of the economics depend also on the seller’s SKU count.
“If a client has a very low SKU count, I have no doubt that it makes sense to have a warehouse directly in the UK, assuming the order volume is there,” Chapman explains. “If it's a client with a high SKU count, it will require more warehouse space and higher transportation costs into the UK.”
For brands that wish to grow market share, localization is a long game that may require investment in the short term. However, committing to a market is the key to building market share.
While consumers may pay and wait for delivery of a somewhat unique product in the beginning, eventually they’ll expect the free and fast delivery they’re used to with other brands.
With Planning, Returns in Global Fulfillment Are an Opportunity
Like localization, eCommerce returns are a trust factor in global fulfillment. Return policy and execution are critical to the success of cross-border eCommerce.
At checkout, you can be sure buyers are looking for the returns policy, and that “all sales are final” banner may lead to cart abandonments. Returns are trickier when items ship from another country. Clearly, it’s not feasible to ship individual items back to the origin country.
For a US-based eRetailer shipping to Europe, your returns process doesn’t have to involve shipping back to the U.S. Chapman says some online sellers work with international returns portals that can consolidate returns and get them back to centralized warehouses operated by the seller or a third-party logistics (3PL) provider. This allows speedy local returns or, for items that do travel back to origin, consolidated shipments to lower freight costs.
By localizing returns, sellers can get perfectly good returns back into usable stock in-country. This reduces the amount of duties and taxes they’d have to pay bringing in new inventory. In the case of electronics, screening, testing and even repairing can be performed in-country by the right 3PL warehouse partner.
For eRetailers that aren’t ready to locate inventory in country, having a return operation set up can be an incremental – and impactful – way of localizing an important service to customers.
Simplify Global Fulfillment Using a Single Source
Global fulfillment can be a complex tangle of customs duties, currencies and decentralized logistics.
Every country has different requirements that distract brands and divert attention from important functions. Manufacturing, marketing, product development and customer relationship management can get short shrift when eCommerce companies who aren’t experts in trade compliance and local logistics try to be.
Even seemingly simple things like getting products from England into Ireland – as was the case for one Staci customer recently – can flummox eCommerce companies.
“The 60-mile shipment was far more challenging than you would think given the short distance because of Brexit,” Chapman says. “We handled it for them and that saved them a big headache.”
Working with people who know how to navigate customs duties, taxes and fulfillment within the countries being shipped to is essential. But even when you line up local resources for global fulfillment in every country, you’re managing a patchwork of independent partners, which eats up management time and makes inventory management more challenging.
Centralization and simplification are key. A 3PL partner with agents around the world is one thing; a 3PL, like Staci, with its own international network of company-operated distribution centers is another.
Having all orders anywhere in the world on one order management system is today’s paradigm of efficiency and control. With an interconnected network, information can be consolidated on one platform, inventory can be managed system-wide and brand standards can be maintained throughout the network.
D2C companies experience these benefits while leveraging local logistics knowledge in every market they enter.
With Staci Americas becoming part of Staci Group, our customers can manage fulfillment across North America and Europe through a single provider. As they sell into new lucrative markets, they do it with an integrated network of 78 logistics sites spanning eight countries.
To find out how you can leverage a global fulfillment network to speed international growth, talk to a Staci Americas specialist.
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