Cross-border growth can appear profitable until you factor in returns, failures, duties (if DDP), and support costs. Unit economics must be managed by lane.
Use clear tiers (Economy, Priority, Express) and price them in line with market expectations for competitors. Test free shipping thresholds for key destinations. Transparency beats complexity.
Failed delivery and returns, plus customer support time. Improving the delivery success rate often saves more than small per-parcel rate reductions.
Only with a plan. Subsidise selectively: key markets, higher AOV baskets, or loyal customers. Blanket subsidies can erode margins quickly.
Base it on the contribution margin and average shipping cost by destination. Many retailers set thresholds that lift AOV while covering typical fulfilment and delivery costs.
Limit promotions by destination and service tier, set minimum basket value, and monitor cost per shipped order weekly. Cross-border promotions need tighter controls than domestic ones.
Delivery charge, linehaul, last mile, customs handling fees, duties/taxes (if DDP), returns cost, claims, packaging, and customer support burden.
Either include them in pricing or show them clearly at checkout—surprises cause cancellations and disputes.
Zone-based pricing is usually more accurate but can feel complex. Many retailers use simplified zones (EU, US, Rest of World) to balance accuracy and clarity.
When volumes increase, lane mix changes, or service performance shifts. Also, renegotiate before peak season and after expansion into new regions.
Optimise routing rules (exemplary service for proper order), improve customs data to reduce holds/returns, and reduce failed deliveries via better address capture and communications.
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© 2026 Asendia Management SAS
© 2025 Asendia Management SAS
