How can I reduce my international shipping costs?

31 August, 2021

E-Commerce

Offering affordable delivery is key to expanding internationally, but there's other factors to consider too when developing your shipping strategy.

Find out more about Asendia's international shipping services

 

While reducing your costs in any area of your eCommerce business gives you a chance to reduce the price of your products or increase your profit, when it comes to shipping costs, the best bet is always to pass the savings on to your customer, because how much you charge for shipping will be a big factor in choosing to shop with you.

Ecommerce platform Flow found recently that high shipping costs were the reason for 47% of customers abandoning their cart, with 32% saying lack of free shipping was a reason.

It goes without saying then that if you can find a trustworthy and reputable shipping logistics company to look after your shipping (and sometimes picking and packing too), the price absolutely has to be right.

So how can you cut shipping costs, so you aren’t left with too many abandoned carts, while also getting the service your business deserves?

We know that digital marketing and sales channels give your eCommerce business access to brand new markets the world over. It’s now very easy for a customer on the other side of the world to buy from you but that’s only one part of the process, you now need to get their purchase to them.


So how can you get more miles for your money without breaking yours or your customer’s bank? Here are some top tips.

Get a shipping company that knows what they’re doing (and can prove it)
First of all, you need to be sure the company taking your products all over the world is the right fit for you. You need to factor in their experience and any insurance they offer, considering the value of the items you’ll be selling.

Then you’ll need to look at what experience of the company has with the countries you’re selling to. Different cultures, taxes and legislation will all play a part in increasing costs. Shopper’s expectations vary worldwide, in some countries home delivery is king, in others it is PUDO or lockers, and cash on delivery is expected elsewhere.

Getting a reputable and experienced international shipping provider will help you navigate this very complex path and give you the solutions you need.

They’ll help you to avoid rookie errors, and also offer customer support should something go wrong along the way.

Even with well-rehearsed and well-oiled processes in place, things can happen without warning. It was only a few months ago that one of the world’s busiest shipping routes was blocked by a navigational error.

Every day that the Ever Given blocked the Suez Canal, it prevented goods worth $9.6 billion being delivered. eCommerce companies that didn’t check if they’re shipping company had appropriate insurance or plans to mitigate issues like this will have felt the pain that only good research could have prevented.

When talking to the companies you’re interested in engaging with, ask them about insurance, disaster recovery, packing requirements, restrictions, and customer support in times of need.

But most importantly check the reviews from other customers. It’s fine to hear the sales pitch from the company itself but have a look and see if they have a history of not being able to deliver on their promises.


Choose the right international shipping method for you (for your parcel sizes/weights and the value of your products)
Now you’ve chosen your shipping company, think about the services you’ll use to actually get the items to your customer.

You could choose a courier service, which can be the fastest way to get an item delivered but it’s really only cost effective for where the item is heavy or of significant value. For low cost goods people just won’t pay the premium price.

Container shipping and Air Freight are also strong options if you’re sending a lot of items across the world. But it’s not right for typical B2C ecommerce deliveries. Sea freight is slow, but air freight is expensive. They also have restrictions on the products you can send this way, so you’ll need to balance time, money, and safety before deciding.

The services that sit between courier and freight, and are very popular for many retailers, are tracked packet services. These are an evolution from the postal industry, where historic postal routes and infrastructure have been reengineered to handle the growing volume of packets, with the addition of scanning equipment so they can be tracked at multiple stages.

Packet services aren’t as quick as a courier service – 3 days to France rather than 1 for example – but the shipping cost savings are major and for most purchases the transit time is very acceptable.

Whichever way you choose to ‘ship’ the item, there will be multiple stops along the way. This is what adds to the cost of international shipping. Once it’s been picked up, it’ll go to a depot for sorting, then it’s taken to the docks or an airport for security scans.

Once it’s arrived at its destination country, it’ll go through customs and possibly to another depot so it can be picked up by a local courier or postal provider.

All these stops include the costs of people processing and passing your packages along. Now the UK is no longer part of the EU, border taxes will also be required, and these will vary both in price and how they’re applied. Some may be worked out on the value of the item, or value and weight, and type of product (classified by HS code).
Make sure you know what is required

If you’re able to get an international shipping company on your side, then a lot of what we’re about to tell you might be looked after by them as part of the service. But if you’re selling only the occasional item from time to time, things like paperwork, restrictions and customs charges will be your responsibility. Although even C2C parcel companies will offer advice on their website.

First of all, make sure you’re actually allowed to post, or ship, what you’ve sold. While we all know from going on holiday that certain things aren’t allowed on board a plane, they aren’t always the same for freight and can change at any time.

Keep up to date with the latest restrictions for your chosen shipping method and destination. You’ll also need to do this if you’re using sea freight too as there are general restrictions for most routes, but some may be added or changed at any time too.

Make sure your customs declarations and any other required paperwork is also filled out properly. Customs officials the world over are sticklers for detail and if you’ve filled out a declaration form incorrectly you could face surcharges at best, or your package confiscated and destroyed at worst.

Time equals (saving) money
We do live in a world where we want things immediately. Big eCommerce companies offer same day delivery for some items and it’s almost impossible for independent businesses to compete with that.

But there is a way you can use slow and steady shipping to your advantage, it’s cheaper.

Give you customers a choice for how long they’re willing to wait for the item. If the item will survive a longer journey then giving your customer this option will save them on their delivery charge.

Of course, you don’t want to offer international deliveries for cheap that will take months to arrive, but a few weeks, giving you a chance to perhaps also bulk send other orders to the same destination and cut costs further, may well be a good compromise.

It’s not just about how the item will get there
One big area a lot of people forget to factor in is the cost of packaging.

Yes, you’ll want to save money on packaging but it’s a false economy if you wrap your customers’ delicate purchases in cheap paper for them to be damaged by the time they get there.

For long journeys where packages might be dropped or bounced around in bad weather, even with the best of care accidents do happen sometimes, you need to package things carefully.

Speak to your international shipping company first, they may offer free packaging as part of the agreement you have with them. If they don’t, ask for their advice and check the packaging you use doesn’t negate the terms of your insurance.

What’s more, consider how environmentally friendly your packaging is. People are increasingly conscious of the impact of single-use plastics so use packaging that can be recycled by the customer. You could even use this as a marketing tool too.

Make sure your eCommerce platform can cope with international shipping
The eCommerce platform you use will also need to be looked at when you embark on selling overseas.

eshopworld, Shopify, Magento, and Big Commerce all have an excellent track record of helping to localise eCommerce businesses in their target markets.

They can integrate with shipping providers and tax management suppliers (and some have their own shipping solutions in some countries), where even the customs charges can be calculated and paid at checkout. This will come at a cost to you, but it’s a massive weight off your mind and takes care of a lot of the things with highlighted above.

Reputable international shipping providers will be able to integrate seamlessly with whoever you use to manage your eCommerce transactions.

Bypass international shipping altogether
There is also one trick you could also make the most of and it will actually remove the need for international shipping altogether, sort of.

Asendia, for example, has fulfilment centres in Italy, Singapore, USA, Australia, and New Zealand where you can keep some of your stock ready to be picked, packed, and shipped as soon as it’s ordered.

While, yes, you still have to get your stock to these warehouses, you can do so in bulk and via Asendia’s logistics network, which will keep your cost down.

Once you then have an order in the region the stock is being stored, your customer will receive the item in next to no time, maybe even the next day if they’re close enough.

Yes there will be a charge for getting the items onto the warehouse shelf, storing them safely, and then delivering them to the customer. But this cost can be spread across all your shipping charges meaning the cost per customer is low, and your profit margin remains intact.

All in all, there’s a load of support out there, whether it’s from your eCommerce platform, other businesses in your sector, or your shipping company, so do your research and don’t hesitate to ask the questions you want answered.

International mail logistics company Asendia is well rehearsed in all aspects of international shipping, employing 1,500 staff at 35 global locations delivering to 200 countries.

If you simply need to ask a few questions about how to get started or you’re already shipping abroad, get in touch and see how Asendia can help make your eCommerce business global.


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Asendia's international shipping services for online stores large and small

We handle the fulfilment and shipping of international orders for some of the biggest etail brands in the world and hundreds of smaller online stores too. 

Find out more about our international order fulfilment services

See details about our international packet and parcel services

 

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