Global or international ecommerce is the act of selling goods (and occasionally services) to people living in a different country from you. Even ten years ago merchants could feel comfortable selling domestically only, but thanks to the massive ecommerce boom in the past couple of years largely in thanks to the Covid-19 pandemic, it’s difficult to avoid overseas expansion if you want to remain competitive. Although many principles remain the same between fulfilling domestically and fulfilling cross-border, there are still many moving parts the aspiring international ecommerce merchant needs to keep in mind.
There are a number of pitfalls, such as dealing with VAT, import fees, and no end of paperwork, as well as a number of troubles that might be discounted by the average seller that can compound into big issues in the blink of an eye. How does one offer consistent two-day shipping, for example, when cross-border shipping and delivery times can be so unpredictable? Luckily, we have a few tips for some basic best practices that, while they won’t solve every one of your issues, will at least give you a great starting point from which you can begin to grow your international expansion ecommerce endeavor. When it comes to giving your business a little wiggle room to breathe, small solutions can multiply into big savings much faster than you think. Read on to discover our tips for selling internationally without breaking the bank.
Inventory planning, or forecasting, is the practice of using predictive analysis of historical sales data to estimate and make educated guesses about future customer demand for a product or service. It’s about far more than Googling how to manage inventory in Excel. This enables businesses to make better decisions regarding supply and the amount of inventory to keep on hand. It’s by no means an exact science, and will almost certainly never be 100% accurate. Because of the number of factors that can affect a customer’s willingness and ability to purchase a given product over time, the actual mechanics and techniques involved in demand forecasting can be quite difficult. It’s for this reason that many businesses use some sort of software or artificial intelligence to make the calculations on their behalf and track matters such as seasonality. Inventory forecasting is especially important in businesses that sell internationally because everything is operating on an increased time scale. Therefore, you effectively have less warning before a stockout becomes a potential problem.
If you happen to sell out of a specific SKU, you have what’s known as a stockout. Stockout costs can be more than you expect. Not only do they represent a missed opportunity for sales, but if it’s a product that your buyers are clamoring over, having a long period of time where the coveted item isn’t available can damage trust and brand loyalty. Hype only goes so far towards keeping your customers loyal. International ecommerce examples of businesses paralyzed by lengthy stockouts are unfortunately a common tale. It’s wise to maintain a certain level of safety stock in your ecommerce warehouse to avoid this outcome.
In a nutshell, you can understand the definition of safety stock as the minimum level of inventory required to last you through the arrival of your next shipment of merchandise. Different merchants and 3rd party logistics providers will have differing ideas and opinions on what constitutes an acceptable minimum level of supply, and there’s a number of calculator sites out there that can help you make the best decisions possible for your business. Having a robust understanding of what constitutes an acceptable level of stock to keep on hand is an instrumental part of demand planning, and is especially important when you want to ship internationally. The time frames tend to stretch out far more, and shipping becomes less predictable.
In this day and age, if you want to know how much it is to send a package, the simplest way to find out is to quickly check the website of your preferred courier partner. These sites will inevitably contain no end of shipping rate tables to help you determine how much you’re likely to spend on an individual package, and some sites even have tables for multiple packages at a time. This means that you don’t have to spend valuable time and energy sitting in front of a computer screen, calculator in hand, doing complicated forms of addition and multiplication.
Not only will most couriers’ sites have tables for domestic delivery, you’ll also typically see an international shipping calculator so you can make sure that you get the best deals possible when it comes to fulfilling for your international customers. Be aware that many delivery companies will provide better rates to business customers who ship packages with them again and again. This means that it may be more cost effective to pick one company and stick with it as opposed to jumping around to whomever has the cheapest rates at the time. These companies may even be able to provide shipping labels and other packing materials for you without too much hassle or extra cost. However, there are arguments for both approaches, so you’re free to run the numbers yourself and see which is best for you.
Demand forecasting and calculating your shipping costs in advance are invaluable tools in cross-country selling that reduce up-front and running costs while maximizing revenue. No matter the size or age of your international ecommerce company, it’s a valuable technique that will without a doubt provide valuable insights. With the advent of AI and machine learning, these numbers are quicker and easier than ever to have close at hand. If you think demand management software is a good choice for you, P2Pseller is proud to offer demand and inventory planning tools with real-time updates, 24/7, for all our e-commerce selling partners. Sell more, scale infrastructure, and grow your business to unprecedented levels. We’re excited to help you smash sales records quarter after quarter, with zero stress and zero phone calls.