With tariffs headlining the news daily, many business leaders are making strides to build, improve or reevaluate their global supply chains and shipping. But small businesses may not always be so well positioned to make costly changes to their business models.
Shippo, which serves 35,000 businesses, dug into our user dplaceholderata to see if our customers, small and growing e-commerce businesses, are using tech to help grow their presence abroad--and we noticed a few interesting trends.
In an analysis of 2018 Shippo customer data, we found that more than 8,000 businesses using Shippo--or 27 percent--leveraged our platform to export from the U.S. to one or more countries.
To compare, in 2015, fewer than two percent of our customer base was exporting to one or more countries. Now, 12 percent are shipping to three or more countries, while eight percent are shipping to five or more countries.
Although we've seen the exponential growth of customers going global on our platform, less than five percent of U.S. small businesses overall are exporting, according to estimates from the International Trade Administration.
The path to becoming an international brand can be challenging--especially for small businesses. Barriers include language difficulties, hurdles with customers, and the cost of shipping.
They can also include complex rules and regulations, as well as an unclear understanding of where to start. Shipping and customs can be perceived as overwhelming and complex for a small business or an entrepreneur that's just getting started.
Here's how three companies with a direct-to-consumer online presence talk about the technological challenges and overall successes of going global.
placeholderEliminate room for error placeholderby over-communicating with customers
San Francisco-based shoe company, Bryr Studio, sees returns as a result of sizing issues as the biggest concern when it comes to international customers. Back-and-forth communication for returns and exchanges for the hand-crafted, made-to-order clogs can be a huge time sink for her small staff. But the pros far outweigh the cons.
"Our international community is excellent and many brands in our category ship worldwide. To not do so would be a missed opportunity," says Jenny Houser, who manages operations at the six-year-old company.
Its customer service team works hard to ensure customers are getting the right fit from the get-go. They also encourage customers to reach out with questions. In an effort to reduce costs, international orders are the final sale (whereas domestic customers may exchange). This means managing communication from top to bottom to set customers up for success.
Prepare to seek new information
Luckyleo Dancewear, an Arizona-based apparel company, sees the rise of e-commerce and shipping tech as a perfect combination to help their business grow internationally. They decided they would be a global company since day one, and have since expanded to serve customers in more than 50 countries.
The company has been successful overseas due to a continuous search for information and knowledge. "If you just keep researching, all of the understanding starts falling into place, and the payoff is that you then you have the whole world as your oyster-client-base," said Karen Saari, co-owner and administrator at Luckyleo.
When shipping beyond borders, shipments will be subject to local customs regulations and duty and tax charges. These duties and taxes are calculated based on both the type and value of the item being shipped. Luckyleo stays on top of country-specific tax rules to keep their customer base wide.
Evaluate different size and weight options for shipping
Mini Materials, which provides model-sized cinder blocks and building materials to hobbyists around the world, is less worried about costly shipping fees. They are based in Florida.
"Given the small size and light weight of the products, the shipping fees weren't overbearing for most international customers," said Erik Polumbo, co-owner of the online shop.
While Mini Materials has products selected carefully for e-commerce, not all businesses fit into the "small and light" category. It's just as important to consider what types of packaging are available to your business to minimize weight or look free options, such as the select boxes and envelopes provided by the USPS.
Having a global customer base may be a goal for many U.S. companies, but for most, it does not seem like a reality. Finding the right technology options to automate processes can be one large piece of the puzzle. The right tools and tech can ease the burden of e-commerce businesses trying to grow internationally.