The trend toward expansion into foreign markets is on the rise. According to the 2019 Visa Global Merchant E-Commerce study, around 66% of the online merchants interviewed were already selling goods abroad. 70% of merchants without previous cross-border sales of goods planned to enter foreign markets. What do they need to consider?
Most online merchants have experience with local shipping logistics providers in their country. And they know their customers’ preferences when it comes to parcel acceptance and delivery times. Those who now want to conquer new markets should also deal with the country-specific preferences and adapt their shipping processes to the conditions of the target countries accordingly.
Responding to customers’ delivery preferences
In some countries and regions, parcel stations or pick-up and return via pick-up and drop-off parcel shops are meeting greater acceptance. This applies, for example, to countries with predominantly rural regions. Customers in Germany, Austria, and Switzerland prefer deliveries at home, preferably after work. The shipping partners should offer flexible solutions accordingly.
Not catering to delivery preferences can be expensive. A survey by Metapack, a provider of tracking systems, found that 37% of all online shoppers surveyed would never shop at the same shop again after being dissatisfied with the delivery. 58% said they would choose another merchant if the delivery options were better.
Hire experienced shipping partners
International shippers have access to the know-how of all relevant European shipping service providers. The advantage for the merchant is that he receives worldwide offers from a single source.
A large national or international shipper covers the whole country and usually offers lower prices. However, it may make sense to include more than one carrier for a country. When it comes to the “last mile”, i.e., precise delivery to the door in larger cities, local carriers are often ahead. They are typically a little more expensive, but fulfil customer expectations better. Often, these are start-ups that also deliver flexibly by bicycle or e-scooter, for example.
Those who work with various shipping service providers also benefit from other advantages. Individual companies can be affected by congestion, strikes, or distribution centre lockdowns. The second or third partner can then fill these gaps.
Maintain an overview of all processes at all times
Three software systems are essential for any online shop selling abroad: A central document repository, integrated analysis tools and a system for calculating customs duties and national VAT.
A centralised document repository provides insights into key performance indicators. The business owner can see which products or business areas are working profitably from this. Integrated analysis tools clearly display all shipments with coordinated dashboards and reports. Via an integrated Parcel Finder, employees can retrieve all information about the shipments.
Create transparency with tracking
After ordering or during returns, customers always want to know the status: When will my parcel arrive? When does repayment occur? Last-mile carriers are usually well-prepared, especially regarding when delivery day and time.
Suppose deliveries are delayed due to increased shipping volume or lockdowns in the shipping centre. In that case, automatic mail should be sent promptly. In times of Corona, customers bring understanding for such circumstances.
A tracking page in the shop’s design contributes significantly to customer satisfaction, with a button like “Track delivery status”. Seamless communication is the most crucial element in achieving customer satisfaction.
Suppose merchants do not offer free shipping or returns for cost reasons. In that case, they should communicate this honestly during the purchase process at the latest. Customers are more likely to accept this as a surprise in the final invoice.
„A small online merchant hardly has the capacity to deal with all the national VAT rates for his goods and the dealing with customs and tax authorities. Even tax advisors reach their limits here.“
Apply VAT rates of other countries correctly
On 1 July 2021, the VAT liability in the cross-border sale of goods changed for merchants due to the coming into force of the VAT digital package. From a total turnover of 10,000 euros, merchants based in the EU automatically become liable for VAT in the recipient countries of their goods. For deliveries of goods, he must apply the VAT rates of the country of destination and pay them to the competent tax authority. “A small online merchant hardly has the capacity to deal with all the national tax rates for their goods and the dealing with customs and tax authorities,” says Annett Schaberich, in-house tax advisor and Vice President of Tax Compliance at eClear. “Even tax advisors reach their limits here.”
With the worldwide unique VAT rate database VATRules, eClear offers over 1.2 million tax codes and covers more than 300 thousand tax rates. EU-27 plus UK exemptions. Permanently updated, the merchant can access the correct VAT rates, and the matching with his shop or ERP system is automated.
eClear’s full-service solution ClearVAT even takes over the entire process, including declarations and automatically pays the VAT to the respective tax office. Once implemented, they relieve the merchant of an almost unmanageable load of paperwork, and he can focus more on growing his business.
