Selling internationally must seem more complex than ever. Supply chains are more elongated than ever, making them vulnerable to disruption, and volatile consumer sentiment makes it difficult to predict demand months in advance. Then there’s potential for energy shortages, labor unrest, the impact of climate change... Geopolitics is also a factor, with the risk of so-called trade wars on the rise. Many of these factors are beyond any one company’s easy control. But, those things notwithstanding, what you can do is make sure your business is set up to address the full spectrum of operational and technological challenges associated with your supply chain. Ultimately, these are just as critical to your success as your local page load speed.
The modern technology needed to address these challenges is, however, brilliantly flexible; here’s what to look out for before procuring it.
Business/operational stakes
Your vision might well be the architecting of an organization that can sell to anywhere from anywhere. Any why not: logically, this represents your best chance of selling all your stock at full price - i.e., with no/minimal need to sell remaining stock at a discount, or to see it go to waste (in the worst case, even to landfill).
But this is clearly not an “at any cost” objective; you need to adapt to the real world. Your planning processes, often dependent on ERP solutions, will make forecasts about how you think things are going to happen, based on the current global context. But the real world is an imperfect, imprecise place, and there’s always a gap between what you planned and eventual reality. This is where real-time, flexible supply chain management solutions, able to manage lots of rules and scenarios, come into their own.
Such solutions make it easy to change the rules, based on both short-term and long-term supply chain strategy updates. For example, you might quickly implement short-term contingency plans in the case of a temporary disruption in your supply chain. Or, you might devise and implement a large-scale strategy change in the event of long term changes in the global context.
Accounting for customs rules and fees
Depending on precisely where you might be shipping to (and from where), complying with multiple custom rules can be complex. For example, some countries prohibit the importation of certain products, components, or categories of items. Where importation is permitted – the majority of items, of course – there is still the issue of customs fees (including VAT, the rules for which can be especially complex) to be taken into account. Such additional costs affect the price shown to and paid by customers, but may also impact margins. Additional complexity is attached to the ‘undoing’ of transactions and fees should an item shipped internationally subsequently be returned.
Also in the real world, situations ‘on the ground’ can change unexpectedly, messing with even the best-laid plans. For example, at the time of writing this article, tariffs are being applied (and withdrawn) to (and from) a variety of products by administrations around the world. Industries and organizations caught up in such tariffs are faced with unpredictability, at best.
To address this particular challenge, ensure your Order Management System (OMS) can be set up accordingly, and note the extent to which it will make the calculations necessary to help you make (or automate) better decisions. This knowledge directly impacts the offer you display on each international ecommerce site.
By way of example, Kbrw developed a specific solution for C-Log – supply chain provider to brands Cache Cache, Breal, Bonobo, Morgan and Scottage brands – to help it assess the cost of international return for its clients. The policy is that customers of these brands return unwanted products to a local warehouse. Here, an assessment is conducted to determine whether moving the product into a warehouse in another country is worth the effort involved – i.e., financially viable – or whether the cost of doing so would simply be too high.
International-specific omnichannel workflows
Some aspects of selling internationally are impacted by cultural (including linguistic) and/or legal factors. For example:
- Some geographies may require a click & collect customer journey, mandating a degree of paperwork that may not exist for journeys involving, say, home delivery.
- Country-specific merchandising may be required: different packaging, instructions or other notices.
- Certain product attributes may be specific to particular countries or regions. A good example of this is garment sizing; a size L may mean something very different in Japan than it would in, say, the USA. Since labels are often sewed-in, this means you will need entirely separate sources of stock, labelled appropriately for the destination market.
- Some countries mandate that products must be shipped from a warehouse within the country for which the individual item is destined, having previously been imported (perhaps in bulk but not always so) to that warehouse. If the product is not in the warehouse, you need to find a viable solution – for example, shipping the product to the local warehouse first (and then, perhaps, for maximum efficiency, cross-docking).
You will want to be certain that your solutions enable such workflows or are, at least, sufficiently customizable to provide this degree of flexibility, enabling you to create specific, fully optimized workflows.
Other challenges
Not every country uses dollars, euros or pounds. Check that your OMS will enable pricing in the appropriate currency.
Note, too, that not every individual in your organization dependent on and using your OMS will be an English speaker. Ensure that your OMS includes the specific language options necessary for your plans.
Technological stakes
Those, then, are some of the direct business and operational challenges to address. There are also technological stakes to consider, which can have a strong, albeit more indirect, impact on your customer experience and brand image abroad. Here are some of them.
Compliance with local laws and regulations
Providing your preference is for a single, unified information system – by far most people’s preference – then you need to operate a technological solution that complies with all the different rules and regulations applied by different countries or regional trading blocs. Consider these aspects of your solutions and verify their compliance, depending on the countries where you’re active or expect to be active:
- you may need to retain personal data within a particular jurisdiction. For example, the PIPL regulations in China require the personal data of Chinese citizens to be kept within the country’s borders. This architecture requires local storage to host that data, while the servers supporting a SaaS solution may be located elsewhere.
- In the United States, the SOX regulations contain provisions that directly address the falsification of financial data. This has an impact on processes associated with the treatment of such data, including third-party control of those data.
Performance
Suppose your OMS is hosted in France, and that it is responsible for providing the ATP (available to promise) figure for your ecommerce site in Australia. For reasons entirely related to physics and the limits of current technology, it takes longer for this ATP data to be delivered to the web page viewed by the Australian customer than for a customer viewing the German ecommerce site.
The delay might appear to be very small in absolute terms. But the web is awash with statistics regarding the effect on bounce-outs, conversion rates and customer satisfaction of ecommerce web pages that a customer perceives to load unduly slowly, with the 3-4 second time span considered particularly critical.
Check that your solutions will be unaffected by virtue of having servers on, at least, all continents where you intend to operate; or that they deliver such high performance that, even with long-distance connections, there’s no discernible latency for customers.
Support
Arguably a human factor more than technological, but 24/7/365 support is more or less mandatory. This is because modern e-commerce is also 24/7/365 and things can and will go wrong occasionally. Your customers won’t wait for 9am in the country from which your solution comes if they have an issue.
It’s simple but important: ensure your solutions providers offer adequate support whenever you might reasonably expect to need it to ensure customers are not left frustrated or disappointed.
An extension of this thought process will take you to the question of solution updates. This is far easier to manage when you operate only in a handful of countries in closely adjacent time zones; not so simple when you’re global. Ensure your solutions providers can guarantee minimal service disruption, perhaps by working with you to determine the time(s) that best suit you.
Your final checklist
By way of recap, here is the final supply chain management checklist for selling internationally.
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Business/operational challenges
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Accounting for customs rules and fees
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Ensure your OMS can be set up accordingly, and note the extent to which it will make the calculations necessary to help you make (or automate) better decisions.
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✔
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International-specific omnichannel workflows
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Ensure your solutions enable such workflows or are, at least, sufficiently customizable to provide this degree of flexibility, enabling you to create specific, fully optimized workflows.
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✔
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Currencies and languages
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Ensure your OMS will enable pricing in the appropriate currency and that it includes the specific language options necessary for your plans.
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✔
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Technological challenges
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Compliance with local laws and regulations
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Carefully verify your solutions’ compliance with all applicable laws and regulations in the countries where you’re active or expect to be active.
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✔
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Performance
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Check that your solutions offer servers on those continents where you intend to operate; or that their performance mitigates any discernible latency for customers.
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✔
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Support
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Ensure your solutions providers offer adequate support whenever you might reasonably expect to need it to ensure customers are not left frustrated or disappointed.
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✔
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Of course, Kbrw’s OMS checks all these. For more information, explore Kbrw.
