Cross Border E-Commerce - How to export inexpensively to Europe

With international shipping you need to be aware of one thing – the logistics setup you choose has an even higher influence on your e-commerce KPIs than in national shipping.

This is particularly true in the Swiss context of customs clearance processes.

• A poor customs clearance, delivery and return experience will negatively impact your recommendation and repurchase rates
• Not offering a local return solution will not help your conversion. Cross border shoppers shy away from international returns like the plague – especially if they have to return the goods to Switzerland and thus pay customs on them
• Conversely, you can proactively promote a good customs clearance and delivery service on your website and in your advertising, thus optimizing your conversion rate.

In this blog you will get an overview of the essential logistics aspects for shipping and customs. We also provide a couple of tips and links to blog articles that deal with individual topics in detail. A quick look at Optimizer 4.0 and you know what your mailing costs.

Customs clearance – the essentials in cross-border e-commerce

DDP vs. DAP 

Please explain. Don’t worry, we’ll explain the terms to you shortly. For a better understanding, however, here’s another one: Incoterms. We know the term from traditional trade; it defines the rules of the game or the payment and delivery arrangement.

There are currently eleven different Incoterms (Incoterms 2010). For e-commerce, however, only two Incoterms are important: DDP and DAP.

DAP stands for Delivery at Place. And that means:

• In the case of a delivery based on DAP, the seller is responsible for the delivery of the goods including transport costs to the designated destination at the buyer’s premises. The costs for carrying out all necessary import formalities are expressly excluded. These are borne by the buyer. Therefore, all duties in connection with imports in the country of destination are to be paid by the buyer or recipient.

What does this mean for the foreign customer? If VAT and customs duty are above the exemption limits, all duties must be paid by the recipient.

DDP logistics: customer-friendly customs clearance

• In the case of a delivery on a DDP (Delivered Duty Paid) basis, the seller must deliver the goods to a destination in the importing country at their own expense and risk, and in doing so must carry out all the necessary formalities and pay all import duties in addition to all the costs. DDP corresponds to DAP plus customs and tax processing.

What does this mean for the foreign customer? Very simple: they don’t have to pay any more when they receive the shipment – the goods are paid as a national delivery.

In this variant, the shipper allows the goods to be cleared at customs by a partner such as the post office in the EU. Thereafter no further customs duties or VAT are incurred.

Send abroad cheaply with DAP

In order to reduce your costs, you can also send your consignment without a customs clearance solution (i.e. via Incoterm DAP).

As already mentioned, you as the sender only pay the transport costs; the recipient however pays any duties, VAT and fees.

But beware: this is exactly what often leads to customer complaints and cheap shipping has a negative impact on your recommendation and repurchase rates. We therefore recommend you use a customs clearance solution (DDP) in each case for international shipments.

How to save money with the IOSS shipping solution

Do you send shipments with a value of up to EUR 150? Then we recommend the IOSS shipping solution.The only requirement for this solution is a registration in the IOSS portal. In order to send the necessary customs data to the EU, you can either use the Webshop Connector International or the Accompanying Paper International. Our explanatory video shows you what the Webshop Connector International is.

Your customer knows what to expect and when, because the items are delivered like a domestic item. Countless PUDOs (pick-up and drop-off) are available to them, and they benefit from all the services of the local postal company.

How to send your goods to Europe inexpensively

There are various shipping options, for example as a freight consignment, as an express courier consignment or by post.

The shipping option depends primarily on the nature of the goods. How big are they? And how heavy? In addition, customer requirements play a major role.

Is delivery urgent? If yes, a courier service is suitable for this. The latter clears the shipment privately and delivers within one to two days. But beware: This shipping option can be expensive and is often unjustifiable in relation to the goods.

For very heavy cross-border e-commerce consignments (over 30 kg), a freight consignment is best. It uses favourable channels such as sea freight.

Shipping by post: inexpensive, reliable and individual

E-commerce consignments account for a large part of postal export shipments – and these are constantly increasing. The reasons lie in the many advantages of shipping by post.

Among other things, it is inexpensive and reliable. In addition, the majority of global e-commerce consignments are delivered through local postal companies. As a result, postal companies – like Swiss Post – have developed further worldwide. They offer an all-round top service.

But what if a customer is not satisfied with the ordered product or simply does not like it? There is also a solution for this. This is one in which all PUDOs (pick-ups and drop-offs) can be used very simply and practically. Find out more about your returns management here.

You decide how to send your consignments

With its large network and sophisticated infrastructure, Swiss Post is an attractive shipping channel in cross border e-commerce. Use it!

Meanwhile, fewer and fewer letters are being processed in the inexpensive and fast letter channel, but all the more small goods. The focus on e-commerce is clear, which is why postal companies jointly offer inexpensive delivery prices and innovative solutions.

With standard shipping, you decide how fast and at what price your consignments will be forwarded.

If you need to mail fast, select the Priority channel. Most deliveries within Europe can be delivered within two to three working days – this also applies to parcels.

If it is not so urgent, the Economy channel is the right solution for you. This is less expensive than Priority, with delivery times averaging five to seven working days in Europe.

On the following graphic you can see the delivery time expectations of European consumers:

Source: IPC Shopper Survey 2018 

Optimize your export costs

The cheapest way to send is clearly via the letter channel. It is used in e-commerce, whether for importing or exporting. You won't find such good value for shipping anywhere else!

To use it, the first thing to do is to distinguish between a letter and a parcel. Nothing simpler than that: small goods up to 2 kg are sent via the letter channel; if heavier, they are sent via the parcel channel.

But when is a small goods consignment considered a letter?

• length+width+height = max. 90 cm, no dimension to exceed 60 cm
• Roles: length+twice diameter = max. 104 cm, length max. 90 cm
• weight in any case max. 2 kg 

Important for you: As soon as you send goods, you must know which customs declaration to use. Keep in mind that in the letter channel, consignments are not automatically sent by registered mail.

If you choose standard delivery of the mail, you can send your consignments for CHF 6.– by registered mail. This ensures that your goods are traceable and insured for up to CHF 150.–.

If your consignments weigh more than 2 kg, they will be shipped as parcels. This is possible worldwide up to a weight of 30 kg. These parcels are automatically insured for up to CHF 1’000.– and always carry an international consignment number.

These can be tracked in the Track & Trace. The experts are waiting for you here.

Choosing the right and inexpensive packaging when shipping abroad

It is clear that, in contrast to many courier and freight shipments, the weight in the postal channel primarily determines the price. Here’s another tip to save on costs, so you can ship abroad at the best price:

If your shipment weighs less than 2 kg, you can select the packaging so that it does not exceed the maximum dimensions of the maxi letter. Please make sure that you adapt the packaging to the content. Did you know that there are also ecological packaging alternatives? You can find more information on this in our blog about sustainable packaging for your e-commerce operation

Using inner and outer packaging with a seal is ideal. It should be robust and protect the content from impacts and pressure. Care is the mother of porcelain box!

The new Packaging Act (VerpackG) has been in force in Germany since 1^st January 2019.

Swiss online retailers must therefore register in a packaging register for shipment to Germany. Here’s how it works:

• Activate login
• Register in the packaging register (select industry and product group)
• Register on a dual system
• Data reporting to the central office

Track and trace is a matter of course

If an e-commerce order is sent, it always gets a consignment number which you send to the customer. Customers want to be sure that the order has been processed and the shipment is on its way.

They want to know which carrier it was handed over to, where the parcel is and when it arrived in the country of destination. According to IPC’s Shopper Survey (2018), the “consignment in delivery” scan is the most important for the end customer.

Posting and the time between order and posting are also important factors and can be decisive for customer satisfaction. Tip: consignments are often badly tracked, and customers rightly complain.

The choice of carrier is as important as the chosen shipping option. Swiss Post consignments can of course be tracked via Track & Trace on the Swiss Post website.

Inexpensive shipping and happy customers

In our digital age, value chains are becoming more transparent. Nothing is easier than sharing bad experiences and discontent. Within a very short time theses can spread via forums or social media. Bad publicity can kill a business model – no matter how good it is.

On the other hand, good publicity can just as quickly go viral and infect others – worldwide! Make use of this fact! If you inspire your customers, you quickly inspire an entire community, which has a positive effect on your business.

Take logistics as an example – it plays a key role in e-commerce. With this information, we show you how to win over your customers to your online shop.

You can find out which other dangers are waiting for you in our blog: Cross Border E-Commerce opportunities and calculable risks.

How to improve customer satisfaction

Your potential customers have found the desired products in the online shop. Invest in the customer experience now.

A concise, coherent product description with all important information, availability and dispatch are the key success factors. Carefully review and optimize the individual steps of the customer journey.

As a logistics service provider, Swiss Post has tips and tricks aplenty to help you. Logistics includes shipping, Incoterms (international rules) and returns. Find out how you can get the best for your customers in our blog.

This is what your customers want:

• various shipping options. You want to decide for yourself whether you want an Express delivery (for which you are also willing to pay more),
• moderate shipping prices (ideally already included in the product price),
• receive a consignment number immediately after the order has been placed (triggered upon order confirmation or sent after processing),
• at any time in the Track & Trace you can check where the consignment is,
• clear total landed costs (total price of an order).

Here is a short list of the total landed costs:

• Total price of an order
• Transport and delivery costs from sender to recipient
• Any duties
• VAT of the country of destination
• Customs clearance fees
• Insurance
• Exchange rate
• Handling and payment fees
  
  The total costs are important not only in the check-out process, but also in the shipping conditions. If you have annoyed your customers with unclear conditions, they will probably not order from you any more. Or, even worse, they refuse delivery, and you end up with a minus deal.

You can count on us

Is your head buzzing with information now? Everything is not so bad! Our sales team will take time for you, explain all the options and help you find the perfect solution. Our IT integrators are professionals and support you with the connection and testing – free of charge.