Selling to the world’s online shoppers from a single U.S. e-commerce site is now a feasible option, even for small and mid-sized online retailers. Such web-only retailers as Ties.com and Butler Luxury Inc. are serving international customers with the help of cross-border service providers that consolidate orders from many e-retailers to reduce the cost of shipping merchandise around the world.
Both Ties.com and Butler Luxury struggled for years to accommodate international shoppers before finding service providers who could help.
Butler Luxury, for example, at first tried opening its own office in Germany to handle overseas orders, and later worked with a European distributor. Neither option worked well, says Mike Cregan, CEO of the 5-year-old online retailer of luxury clothes hangers that go for as much as $35 apiece.
What has proven profitable is engaging Webinterpret to provide site translation, currency conversion and international shipping services. The vendor’s technology allows ButlerLuxury.com to recognize the IP address of a website visitor and show shoppers a version of the site in their own language and currency. “For example, a person from France will search us out and what will come up for them will be a site in French and in euros,” Cregan says.
Webinterpret provides full translation of the product catalog and navigation on ButlerLuxury.com into four languages besides English—which are German, Spanish, French and Italian—and localizes the site’s content for 21 countries where those languages are spoken. For another 37 countries, Webinterpret translates navigation labels on ButlerLuxury.com—although product descriptions are in English.
Webinterpret, through an alliance with PayPal Holdings Inc., also enables Butler Luxury to accept payment in 25 currencies.
A dramatic reduction in shipping costs
When Butler Luxury receives international orders, it sends them to a Webinterpret warehouse in the U.S., which consolidates shipments for its online retailer clients and sends merchandise in bulk to overseas markets.
Cregan says the savings from bulk shipping mean his international customers pay less than half the shipping fee they would pay if he sent each parcel individually. For example, he pointed to a recent shipment to Australia that shipped for less than $35, whereas in the past he estimates that fee would have been $80. The average order value on the site is $350-$400. Cregan says buyers typically are affluent consumers and the hotels and interior designers that serve them—customers who rarely balk at his prices or shipping fees.
Parcels typically arrive in less than 10 days to international destinations, he says. Webinterpret does not collect any sales or value-added tax or customs duty through the online checkout process. If any taxes or duty are due, the delivery service in the customer’s country collects them, Webinterpret says.
Webinterpret, which says it serves some 20,000 retailer clients, earns revenue by taking a portion of the fee for using its parcel-forwarding service. That fee is paid by the customer, not the online retailer.
That’s a good deal for Butler Luxury, Cregan says. “To be able to offer our products to people overseas without any additional cost is quite something,” he says.
Cregan says international sales have grown three to four times in the year or so since he started working with Webinterpret, and now make up one-third of his annual online revenue of just over $1 million.
Ties.com, No. 867 in the 2018 Internet Retailer Top 1000 ranking of North America’s leading online retailers, is a significantly larger online retailer, with more than $33 million in online sales in 2017, according to an Internet Retailer estimate. But it also struggled for years to fulfill overseas orders, says co-founder and CEO Omar Sayyed.
Delivery costs were high, tracking packages was difficult and Sayyed says he was unable to accurately calculate duties and taxes in advance, leaving customers often angered to find they had to pay additional charges on delivery.
That changed when Ties.com began working with Global Access, which consolidates orders from retailers for shipment abroad, calculates both shipping fees and any duties and taxes and allows Ties.com to track orders all the way to the customer.
Less friction, more sales
Since it began using the Global Access service about three years ago, orders from outside the U.S. have increased to 15% of Ties.com’s business from 2%, Sayyed says. The biggest reason is that shipping costs are now lower. Whereas, previously, a Canadian customer on Ties.com might have been presented with an $18 delivery fee—without duties and other fees—the typical shipping cost now to Canada is $8-$10, and to Europe $10-$15, including duties and taxes.
“The only difference is that we’ve diminished the barrier for someone to go through checkout because the shipping rates are less and the duties and taxes are paid upfront,” Sayyed says. “We knew, because the traffic was there, that if we could reduce the friction we could increase sales.”
Ties.com, which sells neckties, bow ties and pocket squares, gets more than 40% of its website traffic from outside of the U.S., according to web measurement firm SimilarWeb. Leading countries sending traffic to the e-retailer are the United Kingdom, Canada and Australia.
Global Access, like Webinterpret, earns its money by taking a portion of the shipping fee the customer pays, Sayyed says.
He says it makes sense for online retailers to work with companies that specialize in cross-border e-commerce and that have mastered the complexity of global shipping. “If you’re thinking of getting into the international space, align yourself with someone who can do this, as opposed to building infrastructure,” he says.
Other e-retailers share Sayyed’s outlook on the firms that specialize in facilitating international sales. In a recent survey of 111 retail executives by Internet Retailer and the Global E-Commerce Leaders Forum, a group that promotes international e-commerce, 72% of respondents agreed or strongly agreed with the statement: “Working with firms that specialize in cross-border e-commerce has been crucial to our success.”
For more tips on cross-border online selling, look for the upcoming report, “International E-Commerce: The Growing Opportunity for Sales and Profit,” which Internet Retailer will release in July.