From supranational corporations to local companies, online stores across Europe have plenty of options when it comes to shipping their goods abroad. But having plenty of choices does not always mean they are all of good quality, does it? Since choosing your logistics partner can make or break your business, we’ve decided to take a look at what types of shipping options you have and what factors to consider before you seal the deal.
“Together with setting up a local refund address and national customer care, the right type of logistics for your product, for your customers and for your field always increase your chances to succeed in a new country,” marketplace specialist Marián Kováčik says. Consulting for more than 50 businesses before and during his expansion abroad, he is more than aware of what failures in logistics can do to a business. It can be anything from minor problems such as packaging (and needing to re-package the next time you send in parcels) to bigger issues like Amazon disadvantaging your seller’s account due to late arrivals and dissatisfied clients.
“That would be my number one piece of advice to anyone even thinking of expanding,” COO of Amispol Andrea Hajkova emphasizes. “Whichever channels you plan to use to sell abroad – we chose Amazon via EXPANDO – make sure you pick a carrier with plenty of experience with that particular model. Amazon FBA has a rather sophisticated system of logistics, tight schedules and strict rules. Late arrivals to warehouses can cost you. One of our drivers was made to wait for a day with a truck full of produce only because the driver (or his company) didn’t book the unloading. Drivers have to speak English and, when shipping to or through Germany, also German. We opted for a local Austrian company and everything has been running smoothly since then.” Or as smoothly as possible, as there is always potential for improvement in business, right?
Cheat sheet for starting with logistics
Before expanding abroad:
- Estimate shipping costs by taking into account package size, package weight, origin country, destination country and shipping volume.
- Set a shipping time in terms of how many days it will take from receiving the order to delivering the goods to your customer’s doorstep. Research the market and your competitors. What do they offer and how satisfied are customers with it? Are there obstacles? What are they? Is your shipping time assumption realistic? If not, where do you need to compromise – are you willing to pay more for your packages to be delivered the way you’ve promised? Or would you rather re-adjust your shipping strategy? Remember, no answer is right or wrong here, as long as you are clear on what you want.
- Refund policy. “How would you gather items your customers claim to want to replace or return for a different size? Consider that to be one of the first steps, as refunds can increase the cost of any territorial expansion. Especially when you work in fashion,” JAPO Transport’s Post & Parcel Business Development Manager Zdenek Jirasek suggests. Where would you store these products? Is office space enough or do you need warehouse space? How much would the rent be? How often do you want your carrier to empty these stores? Do they offer storage space themselves? Make sure you know the answers.
“Shipping research should be an integral part of overall market research before entering a certain market, be it a certain country or Amazon marketplace. Do not underestimate choosing a carrier.”
When choosing a carrier:
- How fast is the company? How many days does it take for them to deliver to my customers in a new country?
- Where does the company deliver? Does it cover the whole country, including remote areas or islands?
- What is their package policy? How do they calculate size and proportion? How do they derive the final cost?
- Does the cost increase, decrease or stay the same as I ship more? What are the factors influencing the price and which model works best for me?
- How much is premium shipping?
- What guarantee can I get? Who is my contact person? Is it easy to reach them?
- Is it a national company? Is it a supranational company? Or something in between? And what’s the difference, anyway? Whom should I opt for?
Global or national? It depends on the selling strategy
So you have tons of questions to ask potential carriers. Now what? “Shipping research should be an integral part of overall market research before entering a certain market, be it a certain country or Amazon marketplace. Do not underestimate choosing a carrier,” Kovacik repeats. Gather the evidence and start forming your shipping strategy. You can opt for a global service such as FedEx, GLS, DPD, TNT or others. They usually offer good coverage and complex services including packaging and so on to multiple countries, so you can manage the whole of Europe from one point.
Hey, Mr. (French) postman!
You can also partner up with local carriers when your market research shows the target group responds better to national services. “If you have a localized online store in French and wish to sell to France, it only makes sense to partner up with La Poste. It will differentiate you from your competitors sending products via a company like DHL and bring you closer to the target audience,” Jirasek of JAPO Transport says. According to JAPO Transport’s data, the French have very specific shopping customs and generally prefer to stick to them. “It is common for French postmen to possess keys to postboxes in their region, for example, so they can deliver packages whether or not you are at home,” Jirasek reveals, stating that in France, people still like and value their postmen. “La Poste – Colissimo covers 75% of the parcel market. By using their services, you immediately increase your chances of success, as you are now seen as an insider who knows the market, as opposed to an outsider from the East.”
As for another example, in Denmark, you can show local knowledge by sending your goods to pick-up places, as 60% of Danish people prefer delivery to collection points. Germans, according to JAPO Transport, are quite flexible when it comes to delivery time (unlike Czechs who expect next day delivery), but require refunds for free. And the list goes on.
Shipping integrators: Your local way in?
Local almost always wins with the locals, so if you are a small to middle-sized business, this might just be the way for you. There is, however, one important detail to consider: in order to partner up with the national post office, you need to be able to send a certain volume of packages. And as not all online businesses are ready to send 100 items daily all the way to France (or Denmark or Romania), there is a middle road you could take.
Shipping integrators, be it independent companies or sub-companies within global carriers, often link stable infrastructure with access via local posts. But before you drop everything for a celebratory glass of champagne and cheer hurray!, do your research. A great fit for some might equal an insufficient solution for others. Everything really does come down to your shipping strategy. “Some can benefit from having one carrier for all of their European deliveries. It saves them time and everything is unified. Others go country to country, linking their products to some of the strongest B2C carriers there. Do your research and pick yours. Try and re-adjust,” Zdenek Jirasek sums up.
As you can see, logistics is a world of its own, and choosing the right partner for distribution can pretty much make or break your business. We are not saying this to scare you off, but more for you to realize that with the right set of questions, you can lead your expanding business in the right direction. Everyone complains about logistics, making it sounds like there are always going to be problems with shipping and that it’s normal to struggle and fail no matter which road you take. We know from experience that failure can occur, but with the right kind of setup, your business can actually flourish.