The trend toward expansion into foreign markets is steadily rising. According to the 2019 Visa Global Merchant E-Commerce study, around 66% of online merchants interviewed were already selling goods abroad. Some 70% of those without cross-border merchandise sales were planning to enter foreign markets. What do they need to consider?
Most online retailers have experience with local shipping and logistics providers in their home country. And they know their customers’ preferences when it comes to receiving parcels and delivery times. But anyone who wants to capture new markets needs to understand the country-specific routines and adapt their shipping processes to the target market conditions.
Respond to customers’ delivery preferences
In some countries and regions, parcel stations or package pick-up and drop-off points are widely accepted by customers. This applies, for example, to countries with mostly rural regions. Customers in Germany, Austria and Switzerland prefer to receive deliveries at home, preferably after work. That’s why shipping partners should offer flexible solutions.
A failure to respond to delivery preferences can be costly. According to a survey by Metapack , a provider of shipment tracking systems, 37% of all online shoppers who were dissatisfied with a delivery said they would never use the same online shop again; 58% said they would choose a different retailer if the delivery options were more convenient.
Work with experienced shipping partners
International delivery services draw on the expertise of all relevant European carriers. The advantage for retailers is that they receive worldwide services from a single source.
A large domestic or international delivery service covers the entire country and usually offers lower prices. However, it can make sense to use more than one carrier for a specific country. When it comes to the last mile, or delivery directly to the front door in large cities, local carriers are often the better choice. Although they are generally a little more expensive, they meet customer expectations more effectively. In many cases, these couriers are start-ups that also offer flexible delivery by bicycle or e-scooter.
Merchants who work with multiple service providers can also take advantage of other benefits. Some companies can be affected by overloads, strikes or distribution center lockdowns. A second or third delivery partner can then fill these gaps if necessary.
Maintain an overview of all processes
Three software systems are essential for any online shop transacting cross-border sales: a central document repository, integrated analysis tools, and a system for calculating customs duties and national VAT.
A centralized document repository provides insights into key performance indicators. Merchants can use this information to see which products or business units are operating profitably. Integrated analysis tools display all shipments with coordinated dashboards and reporting. Using an integrated parcel finder, employees can access all delivery information.
Create transparency with tracking
After customers order or return articles, they want to know the current status. When will my package arrive? When will I get my refund? Last-mile carriers are usually well informed when it comes to delivery day and time.
An email should be sent automatically when deliveries are delayed due to increased shipping volume or lockdowns at the distribution center. Customers are less likely to complain about these circumstances during a pandemic.
A tracking page that matches the online shop design with a “Track Delivery Status” button helps keep customers happy. Seamless communication is the key to customer satisfaction.
If retailers do not offer free shipping or returns, they should communicate this honestly during the purchasing process. Customers are more likely to accept this fact than to be unpleasantly surprised when they receive the invoice.
„A small online merchant hardly has the capacity to deal with all the national VAT rates on products and meet the requirements of customs and tax authorities. Also tax advisors tend to reach their limits in this situation. “
Correctly applying the VAT rates of other countries
The VAT digital package that went into effect on July 1, 2021 changed the VAT liability for traders engaged in cross-border sales of goods. Merchants based in the EU with more than EUR 10,000 in annual sales are automatically liable for VAT in the country where the goods are received. For all goods delivered, traders must apply the tax rates valid in the destination country and pay the amount due to the competent tax authority. “A small online trader hardly has the capacity to deal with all the national VAT rates on products and meet the requirements of customs and tax authorities,” explains Annett Schaberich, In-house Tax Consultant and Vice President of Tax Compliance at eClear. “Tax advisors tend to reach their limits in this situation.
The unique eClear VATRules tax rate database provides over 1.2 million tax codes and takes into account more than 300,000 exceptions in the EU 27 and the UK. Continuously updated, the database gives merchants access to the correct tax rates at any time. Reconciliation with their shop or ERP system is fully automated.
The full-service ClearVAT solution from eClear manages the entire process, including tax declarations and automatic transfer of VAT to the authorized tax office. ClearVAT frees merchants from an almost unmanageable mountain of bureaucracy and enables them to focus more on growing their business.