Why fulfilment is key to successful international expansion
We spoke to James & James – a trusted e-commerce fulfilment provider – to find out more about the importance of fulfilment in global expansion.
The opportunity to introduce new customers to your products and position yourself as a “global brand” can help create a strong brand positioning within your market. There are many compelling reasons for expanding your business internationally, so it’s wise to carefully plan your brand positioning and product offering for the best chance of a success.
While the pandemic and EU exit uncertainty contributed, and continues to contribute, to the erratic nature of UK and global trade, the outlook for cross-border direct-to-consumer (D2C) e-commerce remains on a positive trajectory. By 2026, the market is expected to reach 4,820 billion dollars and carry a Compound Annual Growth Rate (CAGR) of 27% through 2027.
For businesses who have done extensive research, identified a new export market that’s the right fit for their products and have their sights firmly set on going global, what factors do they need to consider? One fundamental part is order fulfilment. It’s a real balancing act to ensure you keep your current, loyal customers happy with on-time order deliveries, while wowing and persuading customers to love your products in your new territory. So, to get the ball rolling, you’ll need to consider a few things.
Work out the best way to get your products from A to B
The international logistics and fulfilment strategy you decide on for expanding into a new market needs to be one that ensures the reliable and continuous delivery of orders to customers. How exactly you ship your products depends upon the country you are exporting them to.
Option 1: A cross-border fulfilment model
- Products leave one country to another
- Inventory is not stored in the country being shipped to
- Ideal for businesses whose international orders aren’t/won’t be a large part of their business model and want a more hands-on approach to managing their stock
- Easier to test success in the new market without large upfront investment
Option 2: In-region entity with local fulfilment
- Products are stored in the country the business is expanding into
- Ideal for businesses whose market is local, but covers a large geographical area (eg the US)
- Reduces delivery costs and time in transit, making it a cost-effective way to handle international orders
- The business picks up custom tax/duties, so the end customer doesn’t get stung with a surprise bill
- Popular payment methods are easier to manage locally
- Returns are easier for the customer as they’re not dealing with international postage
- Third-party logistics providers (3PL) with local fulfilment centres in centralised areas can fulfil customer orders on your behalf, resulting in further time, effort and money savings
Consider outsourced fulfilment to support expansion
If you want to significantly increase your international sales, you may want to research partnering with a specialist logistics and fulfilment service provider. If there’s more demand for your products, and you have more to invest, you may be inclined to use more than one fulfilment centre to extend your global reach quickly and seamlessly.
When a customer places an order on your website, your fulfilment partner will pick and pack the products (stored in their own fulfilment centre), complete all the necessary shipping paperwork and work with their shipping networks to deliver it to your customer, on time and in one piece. If the customer wants to return the item for any reason, they’ll deal with that, too. While you may feel uncomfortable with the idea of outsourcing a major part of your business operations, it doesn’t have to mean you’re completely hands-off. Specialist fulfilment partners will give you the technology and tools to have complete visibility of the order fulfilment process – some even offer “access anytime” portals for your customers to track parcels and initiate swift returns.
Ultimately, outsourcing is an efficient option as you can use the company’s infrastructure, expertise and systems that are already in place and operational.
- Open up to 20 local currency accounts, with local sort codes, account numbers and IBANs
- Collect secure payments from 130+ marketplaces, overseas buyers and payment processing gateways
- Pay suppliers, partners and staff in 40 currencies without hidden fees
- Pay and get paid easily with local bank details on your invoices
- Lock in conversion rates to manage your currency risk
The benefits of outsourcing fulfilment
Expertise and contacts
A 3PL, or third-party logistics provider, has the know-how when it comes to the rules and regulations of products in different markets, as well as export and delivery taxes. They’ll also have access to a network of reliable carriers, with preferential rates that can be passed on to you.
Speed
Working with their trusted carrier partners, a fulfilment company will ensure the timely shipment of your items, automate all of your orders and streamline the entire shipping process.
Scalability
If you have cyclical/seasonal sales or don’t have the right infrastructure, outsourcing fulfilment responsibility will help you scale up quickly.
Cost-savings
You’ll save on overheads and staff hiring costs (especially as demand increases), as well as packaging and shipping costs. Plus, these savings mean you’re giving customers more reasons to choose your products (because you can pass on cheaper shipping costs, or even free shipping, to them). Plus, because you’re not doing the logistics yourself, you can focus on building your business and your ‘bigger picture’ strategies.
Keeping order fulfilment in-house
There’s a long list of responsibilities when it comes to order fulfilment, as outlined above, but if you do decide to fulfil all customer orders in-house, be sure to do your due diligence. It’s wise to undertake extensive research into the transport couriers who will be delivering your products in your new export market. Do they have a good reputation? Would you prefer to use a long-standing courier firm (which may cost you more), or a smaller firm, who may provide more flexibility? Depending on the value of your products – and the speed at which they need to be delivered – you can use a combination of postal and courier options.
Once you’ve decided, make sure you procure your courier in advance. Trading events that happen in the last three months of the year typically cause congestion, so prepare to increase delivery lead times for this busy period. Check whether you need to create an entity in the region and conduct imports yourself, or whether you’ll need to use a third-party to buy and import your products, without creating an entity. Tax implications and documentation required, especially post-Brexit, can be complex, but gov.uk provides plenty of advice in this area.
Summary
Whichever fulfilment model you adopt, and whether you outsource or keep everything in-house, by spending a good deal of time planning your international fulfilment and logistics strategy, you can ensure your products get into your customers’ hands quickly and cost-effectively.
About James and James Fulfilment: Founded in 2010 by Cambridge graduates James Hyde and James Strachan, James and James is a trusted partner to hundreds of online retailers for the provision of e-commerce order fulfilment services – from storage of products, right through to returns management. With fulfilment centres located around the world, James and James helps retailers realise and achieve their international expansion goals. ControlPort, its Queen’s Award-winning order fulfilment platform, provides complete visibility of cross-border operations – not only for the retailer, but for their customers too.
Contact James and James: ecommercefulfilment.com, [email protected], +44 (0)1604 968 820
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