June 29, 2017
Determining a fulfillment strategy to use for your business is complicated enough when looking at a single country, and when you’re scaling across multiple different countries, regions and markets, the task becomes even more daunting. We typically see a direct relationship between a company’s maturation and the decision to engage a cross-border or a localized fulfillment strategy.
Which fulfillment strategy to use?
- Phase 1, Cross-Border:The low cost and short speed-to-market associated with a cross-border direct ship program makes it a common choice for small startups because it doesn’t require too much capital and is fast. As growth ramps up, so do customer expectations, which often motivates a company to provide a better customer experience (and start increasing their earning potential).
- Phase 2, Hybrid:During this time, companies begin looking at importing into a specific country or partnering with a provider who can import product on their behalf, acting as the merchant of record.
- Phase 3, Localized:At this point, markets are established, capital is available and companies can begin importing their product. They will typically manage fulfillment in-house, or partner with a local fulfillment provider.
Other Considerations:
Level of comfort shopping cross-border
Understanding your target markets and how comfortable they are shopping cross-border is crucial when considering a cross-border or localized fulfillment strategy.
For example, in Portugal, 13% of the population shops domestically only, according to PayPal’s 2016 Cross-Border Consumer Research Study. In Japan, 95% of the population shops domestically only. Understanding these nuances can help guide your fulfillment strategy, showing you where to invest time and resources.
Product Regulations