What is Cross-Border E-Commerce? Everything You Should Know

November 14th, 2022 Fahad Khan Leave a comment

Introduction to Cross-Border E-Commerce

International e-commerce or xborder e-commerce is the commercial practice of selling a product online to customers in other countries. Any business may sell online thanks to the spread of digital tools like software applications, programs, online and offline platforms, etc. that have made cross-border e-commerce simpler than ever. E-commerce can also be used by traditional merchants as a test market to see if new international markets would be profitable before setting up shop there.

Organizations today have the option to conduct worldwide business with other nations as well as domestic business within their own country which includes B2C (business to consumer), B2B (business to business), and C2C (consumer to consumer).

Benefits of Cross-Border E-Commerce

The main advantage of cross-border e-commerce is that it allows you to grow your company worldwide and gain exposure to markets and customers around the world. This helps increase the popularity of your brand internationally. With a larger audience, your business will have more potential clients, which could increase the demand and customer orders. As a result, revenue also increases.

Moreover, Cross border has also given a massive rise to social shopping. The products that are less popular domestically have occasionally been discovered to be more well-liked abroad. Cross-border e-commerce can thereby increase your chances of selling sluggish or dead products.

Challenges in Cross-border E-Commerce

The challenges faced in cross border E-commerce are never ending because of such a large scale transaction. One has to take care of a lot of things such as Monetary fraud, Shipping issues, currency difference, etc. Apart from knowing the essentials of international shopping, here are a few issues that must be taken into consideration during the process.

Monetary Fraud

Credit cards are the most popular form of payment for international e-commerce transactions and international cybercriminals have access to advanced and automated tools, such as card testing and credential stuffing. To overcome that, most online retailers use AVSs or address verification systems, which approve credit cards used by customers, in an effort to reduce credit card fraud. This decreases the likelihood of payment fraud but also excludes clients from nations where AVS does not work.

Problems with Shipping

The process of shipping inside the nation is often simple because most taxes and laws are the same. Shipping across borders, however, is more difficult due to the addition of new taxes, legislation, and import and export regulations.

For example, sometimes the overall cost of sending a product to a foreign customer is far too costly to turn a profit for the company. Other times, certain products may be illegal or restricted in other countries, which would prevent the transaction.

Differences in Currencies and Languages

An online retailer’s website must be able to accommodate foreign languages and currencies in order to support users from other countries. However, because they are unable to serve all languages and currencies, they will be limited to a few. Customers from nations whose language and currency aren’t supported will face difficulties because they won’t be able to make purchases.

How Has International E-commerce Evolved Over Time?

Cross-border eCommerce has grown significantly over the years as e-commerce has gained popularity. According to a Statista survey, it accounted for 15% of global e-commerce shipments in 2016 and is expected to increase to 22% by 2022. As per another estimate by Zion Research, cross-border B2C eCommerce in particular would reach USD 4,195.4 billion by 2027 at 28.4% CAGR. Companies have also started to use Augmented Reality (AR) to enhance the shopping experience of their customers.

The Expansion of Global E-Commerce

The development of e-Commerce has been greatly impacted by the previous year because of numerous limits on physical retail outlets due to the pandemic and the expanding number of people who spend more time at home.

Global e-Commerce has benefited from technological progress in connection, with smartphones accounting for more than half of all web traffic in 2022, as per Statistica. Many consumers now regularly buy things through mobile commerce. With the widespread adoption of e-wallets and straightforward international payment options like PayPal, Google Pay, and Skrill, coupled with credit cards and bank transfers for many online businesses, this tendency will only intensify in cross-border marketplaces.

The effectiveness of logistics and delivery management firms has also changed how and when we receive items. Consumers now have more control over their deliveries because businesses provide a variety of product delivery services like global courier services, same-day courier, on-demand delivery, etc. This flexibility allows them to schedule when and where they want their deliveries to be made, allowing them to live their lives according to their preferences. Improved sales are likely to follow when online retailers concentrate on developing solutions that cater to the local market they are selling to.

How To Be Successful At Cross-Border E-Commerce

Entering the international e-commerce space is a surefire method that offers a chance to make money while setting up a business for long-term success. Though it is easier said than done, here are the actions that every entrepreneur should follow to be successful in international trade.

Locate the Best Markets for Your Products

Although expanding internationally can be exciting, conducting e-commerce by country is a great plan. Find external markets that are very interested in your stuff to start. Do your research and evaluate those with a favorable business climate, and then take over one market at a time.

Verify Whether Your Products are Classified as Restricted Trade Items

E-commerce is impacted by several overseas countries’ distinctive product constraints. Medication, food, drinks, alcohol, cleaning supplies, and many other products are some examples of banned products that could not be sold through cross-border e-commerce. These restrictions are set forth by the government or other international organizations. In order to avoid product bans in international markets, check to see that your products do not violate any of these limitations.

Assess the Prices and Taxes Affecting Your Target Market

Taxes from other countries might be tricky with varying rules and regulations. Make sure your business complies with the tax laws of the foreign market to increase your chances of existing in cross-border e-commerce. Additionally, you must be aware of rival pricing for comparable goods as well as distribution and other overhead expenditures.

Utilize Third-Party Logistics Services

E-commerce companies are all too familiar with the hassle of shipping internationally. Working with a third-party logistics provider is a wise choice if you want to carefully fulfill orders and guarantee customer satisfaction. Such businesses will fully manage the shipping process and provide extra services like distribution and warehousing. Technologies such as “pay later” have also stood out in the past few years and have gained a lot of popularity by making the transaction pocket friendly. .

Contract out Customer Service

Language barriers could lead to difficulties in communication. Your company is in jeopardy if customers have issues communicating with your customer service desk or expressing themselves. Consider engaging a cross-border e-commerce customer service provider to assist you in handling all verbal and nonverbal conversations with the locals in an effective manner.

Put user testing first

Reading a plethora of cross-border e-commerce reviews won’t provide you with the expertise you need to give clients a superior buying experience. It’s crucial to carry out user testing on a website before deploying it. Because consumer behavior varies, doing this enables you to get a glimpse of what to expect. You may find the website elements that are best for your target market by conducting user testing. It provides insightful information on the customer experience, enabling you to make required changes before starting the operations.

Effective cross-border e-commerce systems

Reliable software for cross-border e-commerce assists companies in streamlining procedures involved in doing business abroad. These systems offer tools for translation services, product classification, item restriction management, denied party screening and landed cost (duty and tax) calculation. Businesses hope to enhance their international sales strategy, reduce trade risks, and boost operational effectiveness by utilizing cross-border e-commerce platforms.

Supply chain and logistics managers, who oversee all facets of a global firm, such as shipping consolidation and international payments, frequently deploy cross-border e-commerce software. Cross-border e-commerce software is frequently integrated by businesses with other e-commerce technologies, like shipping software and payment gateways.

A software product must meet the following criteria to be eligible for the cross-border e-commerce category:

Determine different categories of business risks, such as supplier risk or non-compliance
Offer shipping options or carrier platform integration
Permit businesses to control landed expenses and prepay all taxes and duties
Permit customers to purchase using their native language and currency
Offer a variety of payment options or incorporate payment gateways
Sync up with order fulfillment and e-commerce systems

FAQs

Describe Cross-Border E-Commerce With Examples.

Cross-border e-commerce is a method for business growth in which companies create or join online marketplaces to sell their goods internationally and tap into the lucrative global market.

A good example is Ubuy which is a Kuwait based cross-border business that sells to customers in different countries.

What Does Localization in E-Commerce Mean?

Localization in e-commerce is the process of making content on a website appropriate for its global audience. It should blend in with the local content seamlessly.

What Is E-Commerce Omnichannel?

Businesses may offer customers an exceptional purchasing experience across all online and offline marketing channels by utilizing this e-commerce strategy. A customer will always have a consistent and positive shopping experience whether they make a purchase in-person or online.

How Promising Is the Cross-Border E-Commerce Future?

Unquestionably, international e-commerce is a fantastic approach to increasing brand recognition and positioning your business as a market leader. It provides a firm with access to a wide range of customers and is here to stay. However, retaining high-quality data is essential to making this happen. Additionally, businesses must handle the difficulties of managing data across various foreign e-commerce platforms.

What are the costs of cross-border e-commerce platforms?

Prospective buyers will probably need to get in touch with vendors directly to receive a pricing quote for a cross-border eCommerce platform. They can anticipate a fixed cost that could be charged monthly, annually, or dependent on the number of transactions.

Conclusion

Cross-border e-commerce is developing globally and has significantly contributed to the expansion of the global economy as a result of rising digitization. Online international purchasing is becoming more and more popular.

Now that you know more about cross-border e-commerce, its importance, its potential drawbacks, and the best way to accept local payment methods, it’s time to consider which markets you should target first to take full advantage of the huge opportunities for growing your business globally.

Archives, Global Logistics, Global Trade Daily

Would you Outsource your Logistics Services to a Competitor?

September 19th, 2022 Peter Frerichs Leave a comment

Back in October 2021 when the supply chain crisis was hitting its stride US retailers were presented a choice. They could either continue weathering the storm or take proactive steps to mitigate its effects. Few firms had enough wiggle room in a storm of this magnitude, but those that did engaged in the unthinkable – they chartered their own cargo ships to import products.

Port delays and worker shortages led to untenable delays for retailers. It was an expensive move, but major retailers like Target, Costco, Home Depot, and Walmart were left with few options. A year later, the supply chain crisis is still raging (albeit a bit calmer) and retailers are considering another major move – outsourcing their logistics services to third parties.

One of those retailers is Saks Off Fifth. The sister business to Saks Fifth Avenue, Saks Off Fifth made the controversial decision of contracting a provider to manage some of the company’s logistics operations. In the short term the bet has appeared to have paid off. Saks reports improved delivery times and greater agility. The company Saks Off Fifth contracted was Quiet Platforms, a subsidiary of American Eagle Outfitters (AEO). Both AEO and Saks Off Fifth sell clothes and likely compete with some customer segments. This begs the question as to why a retailer would turn over their customer database to a company owned by a competing retailer?

While Saks Off Fifth appears to have benefited, AEO has as well. By branching out into the logistics arena, AEO is generating revenue not only through the sales of T-shirts and jeans but also through their contract logistics provider, Quiet Platforms. Gap has taken a similar step with GPS Platform Services, a logistics and fulfillment network fully owned by Gap that offers their services to businesses of all kinds, not just retail. Amazon was one of the first to pioneer this model with Fulfillment by Amazon, a shipping and warehousing service for third-party retailers. Moreover, Fulfillment by Amazon operates in parallel to Amazon selling its own retail products online.

Walmart’s GoLocal is another example, launched in August 2021. This is a rapid delivery service for third-parties that has reached 1 million plus shipments in just one year. The benefits of running one’s own supply chain are clear – greater visibility, transparency, and privacy. Yet, Quiet Platforms and others are quick to chime in noting that clients have full visibility into their supply-chain operations. Gap has touted their strict data protection when it comes to client information and the authorized operators and personnel that manage them.

Some experts feel that using a third-party from a firm that doesn’t directly compete in the same product category makes sense. Yet others warn that if you’re both selling large quantities of sportswear, for example, running the risk of your competitor getting their hands on your customer data is a risk not worth taking.

Archives, commentary, Global Trade Daily

A Comprehensive Guide to Picking a Third-Party Logistics (3PL) Partner for Your Business

March 17th, 2022 David L. Buss Leave a comment

The right third-party logistics partner can help your organization improve customer service, control costs, and increase efficiency. It’s important to properly vet possible logistics partners to ensure your brand and services are well represented and the partner can deliver according to your needs.

Below are some of the things you consider in choosing a right third-party logistics partner:

Establish Communication

Logistics have gotten more sophisticated in recent years. This logistics partners need to maintain high levels of communication and data sharing between the provider and the company. It’s important to find a third-party logistics provider that you can trust and one that shares your brand’s culture and values.

Do Your Due Diligence

They did not create all logistics providers equal. If you’re selecting a new provider or changing to a different provider, it’s important to look for logistics partners with the resources and capabilities you need to reach your business goals. Providers should also be able to integrate to your existing systems, or be willing to work with you to find an agreeable solution.

Ideally, look for outstanding service across financial history, brand stability, experience working in your industry, experience in specific geographic regions, owned vs. rented assets, and compliance with regulations.

Along with talking to the providers themselves, do outside research and read reviews from other companies that worked with them. If possible, ask the provider to connect you with satisfied customers. If they stand behind their service, they will be happy to showcase happy customers.

Look for Diverse Offerings

Logistics providers typically specialize in a few domains, including commodity services, industry services, and logistics services. Their offerings can range from sourcing, shipping, transporting, and customs management. Also multi-function supply chain management and oversight for specific industries or specialization in particular sections of the supply chain.

Service add-ons are valuable to both parties. A single provider can supply several services to make your supply chain scalable and seamless. You can look for value-added amenities like IT asset management, quality control, and high-tech logistics solutions. Some common service add-ons may include rush order or emergency order handling, product kitting, reverse logistics programs, and returned material authorization agreements.

Choose Partners with Advanced Technology

A third-party logistics provider’s IT infrastructure is vital to your needs and their own. Your possible provider should own and operate the contemporary technology needed for their side of the partnership, including warehouse management systems, fleet tracking systems, and inventory analytics and controls. You could also look for order fulfillment systems, freight theft or damage management, and wares tracking using RFID or EDI.

The logistics industry is undergoing rapid change. It’s important to find providers with advanced technology solutions to address your needs as the business evolves.

Look for Customization

Depending on your industry, you may need more customization options for your business. An experienced third-party logistics provider can help you optimize inventory and deliver excellent service for your customers. Building to order, rather than relying on stock, allows you to reduce inventory and production costs.

Opt for Omnichannel Expertise

Omnichannel is essential in the modern business world and necessary for enhanced customer experience. Your third-party logistics provider should understand the ins and outs of omnichannel commerce and how to provide that exceptional experience for customers.

Look for partners with repeatable business models, proven performance with previous customers, and experience with your business type, industry, or customer base. Depending on your needs, you may want to opt for a dedicated provider that focuses on one part of the supply chain or specific product types.

Work with a Network of Locations

Effective logistics partners have strategic network configuration with optimized distribution centers. It’s vital to understand the third-party logistics provider’s warehousing asset ecosystem, such as rented or proprietary storage facilities. If your products will need many storage stops on domestic or international routes, you will need a provider that owns and manages these warehouses for quality control and security.

You should also investigate more details about the warehousing assets, including the facility sizes and capacities, scalability, and future expansion plans. Are the warehouses close to ports, airports, highways, and railways? How many trailers and containers do they typically handle in a day? Is there anything you need to be aware of about service during the busy seasons or in the event of high shipping demands?

Focus on Excellence in Service

An experienced logistics partner will dedicate to service excellence and quality management. Your third-party logistics partner will have a significant impact on how your own business and customer service functions, so you want to be sure you’re choosing a provider that’s committed to delivering for you and improving their own product.

A provider with a dedication to service excellence will continue to optimize their own processes and will look for opportunities to install better solutions whenever possible. They should be invested in their service and its success, like you are to your own company and product, and always looking to excel.

Find Brand Alignment

Your logistics partner reflects on your brand and impacts your business. To ensure you represent your brand and your vision, you need to look for a provider with a long history of success, adherence to compliance and regulations, financial stability, and a continued interest in investing in the company, facilities, equipment, systems, and resources for optimal logistics.

With the right partner on your site, you can grow into a solid relationship with a third-party logistics provider that can grow and evolve with your business. While switching to different providers occurs as business needs change, it’s much simpler to find the right provider at the start and work on developing a long-term partnership.

Key Takeaways

The supply-chain management industry has undergone radical changes in the last decade. Many third-party logistics providers emerged on the market in response to this boom and the increasing opportunities with a global marketplace. Not every provider has the tools, resources, and expertise to deliver for you, but, so do your due diligence and find a provider with a positive reputation, proven processes, and a willingness to adapt and grow.

3pls, Archives, Global Trade Daily, Trucking

NTG Slides Between Old Guard and Freight-Forwarding Disruptors

February 3rd, 2020 Matt Coker Leave a comment

If there is one common theme among newish freight-forwarding disruptors, it is that they seek to replace an old guard that relies on paper, clipboards, and telephones with a brave new world that relies on cloud software, analytics platforms, and smartphones.

The stakes are high: tracking and handling freight is a $1 trillion industry. And so, the business media falls all over itself to profile the likes of Qwyk, Flexport and Zencargo. It’s a small wonder that established players have moved into the freight forwarding “startup” space, as evidenced by Twill, a so-called “Maersk innovation.” Amazon is also breaking into the freight-forwarding market, as is another well-known disruptor, Uber, which launched Uber Freight in 2017 and expanded into Europe last year.

Falling somewhere between the newbies and the established players is Nolan Transportation Group (NTG), a multimodal freight brokerage firm that was founded in Atlanta in 2005. Featuring parcel, truckload, less-than-truckload and intermodal transportation services for more than 7,000 customers across the U.S., Canada, and Mexico—as well as a carrier base with over 30,000 independent transportation/trucking companies that aid in facilitating the movement of clients’ products—NTG has mostly been in the news lately due to industry consolidation.

After Gryphon Investors injected capital into third party logistics company Transportation Insight in September, the private equity firm and the 3PL together acquired NTG three months later. Then, in January, NTG announced it had acquired Eagle Transportation LLC, a Mississippi-based freight brokerage specializing in temperature-controlled shipping. Out of the deal, NTG added Eagle’s expertise in cold-chain logistics and brokerage of refrigerated equipment, and Eagle received access to NTG’s vast pool of carrier representatives.

But NTG Freight is now seeking to turn industry heads with its new portal for carriers and shipping customers that went live for the public on Jan. 18, after months of beta testing. Those who log in 24/7 get real-time access “to every available shipment we have as a company,” says Garrett McDaniel, NTG’s vice president of Software Project Management. “Carriers like it because available loads are not on public boards where you have to beat out the competition to find lanes you are interested in running. The second a shipment is created, it shows up on our system as available.”

Previously, NTG communicated with its more than 8,000 companies and 100,000 trucking companies via fax, email, and phone. The portal makes that process communications and booking loads faster and easier, with bidding and rate confirmation handled automatically—and via a smartphone.

“We have created a few access levels for our preferred carriers, who not only see the loads available but the offer rate for that load as well,” McDaniel explains. “It’s created a bidding system that is pretty different than the eBay-style bidding that our competitors are doing.” With the latter, a bid amount is entered and after other bids are made, a “winning bid” is selected. But with the NTG portal, a carrier submits a couple of different amounts and is automatically chosen without having to debate.

Asked whether the new portal came about based on what customers were seeking or what NTG saw needed refinement, McDaniel answered, “A little bit of both. The platform was originally created based on some specific needs of carriers.”

You might assume here that NTG’s answer to those needs came in June 2019, when the 3PL deployed Descartes Systems Group’s MacroPoint, a cloud-based freight visibility solution. After all, Perry Falk, senior vice president of NTG’s Carrier Operations, said at the time: “Our customers can opt to get real-time visibility on every shipment we move. The drivers for our carriers can provide location updates with minimal interactions while in-transit, leaving us with happier carriers who can focus on driving safely.”

However, McDaniel corrects that the new portal’s inception actually stretches back a couple of years before that, when carriers were telling NTG as far back as 2017 that they needed online access to their payment information. “One thing they wanted was access to payments in real-time. Paperwork was missing on some loads, and they wanted to see information on available loads. Over time, as we grew as a development team, along with the experience of the users, things were refined internally.

“One of the very first versions that rolled out showed the payment status. You’d log in to see when you were being paid if you were paid already what the check number was and when it was mailed. Really within the last year, we rolled out a lot more core functionality, including bidding on loads, rate confirmation, as well as some of the customer-focused functionality as well.”

McDaniel considers all of this to be part of NTG’s mission “to improve the carrier partnership.” Relationships with loyal carriers and customers were already in place during the NTG portal’s beta phase. “We’ve received a ton of positive feedback, especially among the smaller carriers that have one to five trucks,” McDaniel says. “It’s been a great tool for them to be able to keep their trucks completely filled with loads purely by using the system.” Carriers “with thousands of trucks” also participated in the beta phase, he adds. “They were able to get in, play around with it and give us their feedback. We’ve taken a lot of the feedback and been able to implement changes.”

The live version features a redesigned front end, more user-friendliness and a more modern-feeling than the beta tester, according to McDaniel, who credits Gryphon Investors with steadfastly supporting his company’s high-tech vision. “They have been a really incredible partner in developing this application,” he says.

However, while new freight forwarding disruptors scramble to build new customer bases, McDaniel is also quick to applaud the NTG network with continuing to push his company to refine with the digital times.

“We have been around for 15 years,” he notes. “In that amount of time, we’ve grown a deep network of carriers and shipper partners. These were not acquired overnight as a tech startup disruptor.”

Which, McDaniel believes, gives NTG a competitive edge over the upstarts. “We have a pretty dedicated group of users. This is something we view as an enhancement for our carrier partners. You don’t ever want to replace human relationships. Rather, this is something that quite frankly helps strengthen that relationship with us.”