A hefty shipping fee discourages customers, despite knowing that crossing borders costs money. Learn how to lower your shop's international shipping fees.
If Amazon ships to different countries, then your online store can soon accommodate international orders as well. But on the flip side of reaching out to more customers is the potential struggle to make a sale.
As you may have already guessed, consumers hate paying for shipping. 83% of them admitted preferring free shipping, according to a survey by RetailMeNot. And in another survey, which was conducted by the IPC, 62% of international buyers reported expecting free shipping.
Even if the two surveys yielded different results, they provedthe same fact: international shipping fees are frowned upon.
But as business owners, we can't just forfeit those extra fees. Even companies such as Amazon that ships to the Philippines and other places have these fees. Crossing borders costs money, especially if issues arise. Fortunately, there are ways to reduce shipping fees without hurting our profits. Below are those cost-reducing tactics you can consider for your e-commerce store:
1. Study The International Demand For Your Products
Before accommodating international buyers, find out the demand for your products, and plan how to satisfy international orders. You can do that by answering these key questions:
- Is your product taxable in a specific country? If so, then in what value and quantity?
- Are there custom laws that can affect orders?
- What is a specific country's minimum threshold value for duties? Are there ways to immediately locate such a particular product?
To understand the minimum threshold value for duties (hereafter referred to as "de minimis level" or DML), refer to this example: If you sell a designer bag into a country with a $150 DML, the buyer could be required to pay a customs fee in addition to the shipping. Thus, reconsider your plan to accept international orders in this case, especially if the majority of your customers don't like to pay additional fees.
2. Negotiate With Multiple Couriers
All shipping companies base their prices on the volume of parcels. The more you ship, the cheaper you pay. Therefore, if you regularly ship international orders, compare prices of different couriers and negotiate their rates. If you let one courier know that a competitor of theirs is offering you a lower rate, they'll be open for negotiation.
3. Use Your Courier's Packaging
Though the packaging is an essential aspect of your brand, using them for international orders will cost you more, compelling you to increase your shipping fees. That's because your own packaging can trigger additional "dimensional fees" if it exceeds the size regulations set by couriers. To avoid that, you can slip in your own packaging inside the one provided by your courier. That allows you to trim your shipping costs by up to 15%
4. Consolidate Parcels
To increase shipping speed and reduce cross-border and shipping costs, use a parcel service that consolidates your shipments into a large pallet or box, sorted by country. When the shipments arrive in their destination countries, they will go through the customs in bulk before being delivered to the local post and sent to your buyers' doorsteps.
5. Look for High-tech Solutions
You can invest in shipping software, where buyers can see complete shipping estimates. According to the IPC survey, 93% of buyers wouldn't buy a product without knowing its full costs, including delivery and duties. You can also find an online shipping solution, where you can submit custom declarations electronically. It allows you to save on printing costs.
Online shipping is also available, in which you can save up to 60% on express mail. Couriers also allow free pick-up service and other perks when you pay online.
The key is to think of yourself as a customer when finding ways to reduce your shipping fees. Aim for the lowest price possible without being dishonest. Never under-declare the value of your products, because the tactics above are easier - not to mention morally correct -to adopt.