This post is contributed by the team at APC Postal Logistics, a USPS Postal Qualified Wholesaler (PQW) offering one-click access to consolidator pricing through ShipStation’s platform.
So, you’ve built a successful brand in the U.S. and you’ve decided to ride the growth wave of cross-border ecommerce. Great idea. But as soon as you open up your site to international orders, your analytics show a spike in shopping cart abandonment. But it should be no surprise – high shipping costs are the number one reason customers don’t complete online orders.
Maybe you’ve tried a courier option to give customers the delivery confirmation they want but that $25 t-shirt ends up costing them more than double that at checkout. You may have tried 1st Class Airmail but even those rates on lower value goods can be a deal breaker and there is little to no tracking. It turns out that your cross-border customers want the same thing your domestic customers want: great service at a low cost. So how do you deliver?
Partnering with a Postal Consolidator can be a game changer in your overall shipping strategy by giving you access to discounted pricing, additional service levels, and tools to manage total “landed costs”. This, in turn, saves you and your customer from unnecessarily high and unexpected charges.
Consolidated Pricing and Service – How it Works
Postal consolidators combine parcels from many different shippers and then physically sort, bag and tag large sacks of material by destination country. All parcels are dropped off at one of only 5 USPS International Sorting Centers or are air freighted directly to the foreign post office for final-mile destination. This process leverages the efficiency of local residential delivery service while taking advantage of discounted commercial rates and services only offered to volume mailers. These savings are then passed on to you and your customers.
Access to USPS ePacket Service with Delivery Confirmation
One of the most popular services that fills the large gap between low cost postal delivery and the high cost of courier service is USPS Commercial ePacket. This service offers low rates with delivery confirmation but it is not available at the retail level. There are only a few postal consolidators in the country who are designated to offer USPS ePacket as part of a highly-vetted work share arrangement with the USPS. They have the designation of USPS Postal Qualified Wholesaler (PQW).
The USPS has strict compliance requirements, a key one being the ability to prepare and submit summary electronic manifests. What does that mean to you? Submitting data this way allows you to pull delivery scan information back through to your tracking site from the destination country for a fraction of the cost that courier companies pull signatures. This means that visibility is on the house.
Reducing and Managing “Landed Costs” (DDP vs DDU)
So, your customer in Canada orders a $100 pair of designer jeans from your site and pays the shipping fees. But when the package arrives at their door, they are greeted with an additional $20 for duties and tax along with a $25 collection fee. They may refuse the shipment and lose out on the jeans but you have lost out on the sale, the cost of freight, and any future business from that customer.
It is crucial to understand the “landed cost” of shipping, which includes taxes, duties and customs fees. As the seller, you have the option to collect duties and taxes up front (DDP-delivery duty paid) or to have the buyer pay them at the time of delivery (DDU-delivery duty unpaid). A postal consolidator can eliminate collection fees and also offer guidance on how to manage the collection of duties and tax to eliminate surprises at the time of delivery.
Tips to Selecting the Right Delivery Partner
- USPS PQW Designation
- Make sure your consolidator is a USPS Postal Qualified Wholesalers (PQW) to get access to wholesale pricing and commercial services through the USPS.
- Software Integration
- Work with a PQW that already integrates with your current software platform. ShipStation has partnered with some of the leading PQW’s to help streamline the process and give you one-click access to these rates.
- Multiple Facilities
- Select a PQW with multiple locations in the U.S. to reduce in-country transit times. This also ensures that your parcels will keep moving even if a localized natural or other disaster threatens to interrupt delivery.
- High Volume
- Partner with a consolidator who processes a high volume and dispatches shipments daily to make sure your parcels move quickly and there are no delivery delays.