There are an estimated 90 million Amazon Prime customers in the United States who enjoy free two-day delivery on their online purchases. The shipping time across the 30 largest ecommerce stores in the country has dropped from an average of 8.3 days in 2014 to 5.1 days in 2017. Customers today are truly spoiled when it comes to quick and efficient delivery of their online purchases.
This puts independent small etailers in a tricky position. Shipping a product within a day or two can cost a lot of money and this can significantly erode profits in industries that have wafer-thin margins. Also, if you are a retailer who drop ships the product directly from your supplier in countries like China, it is not feasible to match Amazon in shipping time.
Long cross-border shipping times can be a huge challenge to online retailers. But this can be overcome using the following tips.
Setting the Right Expectations
Cross-border shipping times are a big deal and can heavily influence the conversion rate on your ecommerce website. But depending on your product line, it is possible to minimize their impact. Sure, it is always nice to get your product delivered within a couple of days but a longer delivery time is not always a deal-breaker.
This is especially true for lifestyle purchases (like clothes, shoes, etc.) where customers order from a store either because they have great deals or because their products are great. So as long as a store provides great value and are transparent about their shipping times, customers are happy ordering from them.
Using Delivery Date, Not Shipping Speed
How you present cross-border shipping information can influence your conversion rate. One usability study found that customers are not really bothered about how long it takes for a product to ship, but are concerned about its likely arrival date. Technically, both these things mean the same.
A Baymard Institute study found that replacing “shipping speed” with “delivery date” can have a huge impact on customer perceptions. If you rely on third-party logistics and the shipping time is outside your control, you may also replace a specific delivery date with a date range. No matter which way you present it, users convert better when they know the tentative date of arrival.
A surprisingly large chunk of products consumers buy in the United States are imported. For instance, more than 97% of apparel and 98% of shoes sold in the US are made overseas in countries like China and Bangladesh. These are also industries where margins can be low. A lot of etailers, at least those in the startup stage of business, tend to drop ship products directly from suppliers in these overseas countries and thus save warehousing costs.
Finding a supplier who is reliable and ships on time is thus crucial. If you are making use of a service like AliExpress to procure orders, make sure to only hire suppliers who have a positive feedback rate of over 95%. But given that even the quickest delivery channels from countries like China can take at least a week to reach the U.S., it may seem like a good idea to avoid displaying the delivery time altogether on your site. But surprising your customer with a long delivery time without notifying them in advance is not good for business. Not only do you ruin your credibility, but you also set yourself up for a high number of chargebacks and refund requests from irate customers.
There are other ways to overcome this challenge. If you are a small etailer processing just a handful of orders each day, you may call each of your customers and personally notify them about the shipping time. While long cross-border shipping times can impact conversions, most customers are okay with it once the purchase is complete. Calling your customers and seeking their confirmation before processing the order keeps your reputation intact despite long shipping times.
If you are a larger business processing several dozens or hundreds of orders each day, it is ideal to partner with a freight forwarding business in the destination country. Not only does this cut down your shipping times considerably, but it’s also a good way to scale your business up.
Let Your Product Do the Talking
Companies like Amazon, Google and Walmart have been investing in drone delivery services for a few years now. Amazon already offers same-day delivery on many of their orders. Quite clearly, shipping time is a problem that these companies are trying to solve. As consumers, we are only going to see shipping times get shorter over time.
Consequently, the challenge to small etailers is only going to increase. But when all is said and done, it is important to remember that shipping times is just one component in an eCommerce transaction.
It is worth remembering that customers are willing to pay hundreds of dollars several months in advance to pre-order products they love; like the latest iPhone or a Tesla car. So as long as you have products that customers love, let the product do the talking and do not let long cross-border shipping times affect your competitiveness.
Benjamin Powell is the founder of DSA Global