International expansion can be one of the most exciting—and challenging—moves a retailer can make. Having the right partners in place is vital for a successful launch in any market, but especially when that market is overseas. Your fulfillment provider is one of the most important members of your international team. From accessing competitive parcel rates, to navigating customs, VATs, and in-country regulations for your destination, your fulfillment partner can make the difference between a smooth transition and an expensive disaster.
Here are six questions to ask to ensure your fulfillment provider can rise to the challenge.
1. How much experience do you have with international ordering and delivery?
Even some of the largest domestic 3PL and order fulfillment companies—those with robust domestic footprints in the US—nevertheless have very little experience in international markets. A fulfillment provider of any size can quickly get in over their heads if they don’t have experience in the relevant market. If your provider does have experience, ask them to share with you the size and capacity of their current overseas operations, as well as references from satisfied international clients.
2. Do you have an established delivery network in the country (or countries) we’re expanding to?
Every country has its own delivery networks, and traditional US options (UPS, FedEx and USPS) often are not available or very expensive. Even where a familiar carrier is available, they may not be an acceptable option to your customers. An established network of local carrier relationships provides a significant cost savings and customer satisfaction benefit.
3. Where are your distribution facilities located for this region?
It’s not necessary to have distribution facilities in every country to which your products are offered, but a strategic distribution center location can provide significant benefits. For instance, when entering the European market, a distribution center in the Netherlands provides deferred tax benefits that are not available in any other country. Proximity of facilities to your markets also provides cost and delivery time savings.
4. Will there be a local operations manager, or will the relationship be managed from the US?
Either way may be sufficient for your needs, but it’s important to know this information. For smaller operations, a US-based manager may be perfectly sufficient. For companies planning to open substantial in-country markets, it may be beneficial to have an account manager on the ground, who knows the market well and can manage operations in-country. Additionally, some countries place thresholds on how much sales revenue you can legally collect before requiring that you open an office in-country. It is helpful to know that your fulfillment provider can accommodate these needs as they arise.
5. How will your systems interface with ours?
If you’ve previously handled fulfillment in-house, you likely have a well-tested internal inventory management and quality control system. Even if you have an existing relationship with the outsourced fulfillment provider, the international market opens up new complexities, including new online market platforms, customs and duties, country thresholds, packaging laws, and much more. Ask your fulfillment provider’s IT team to walk with your own IT team through how all these systems will integrate with the systems you’re already using to ensure you have the visibility and accountability you need.
6. What other services can you offer?
Language, cultural preferences, in-country laws and regulations—these are all a part of the landscape when making the international move. Some fulfillment providers may be able to help navigate even seemingly non-fulfillment-related issues. Ask about in-country relationships that may help solve your customer service, marketing, and packaging challenges.
Knowing is half the battle. Before you get into a long-term partnership with a international fulfillment provider, be sure to ask the right questions for your business. At SP Express, our experience is the result of years of challenges and successes. Mistakes and corrections. With a proven capability to serve our clients in the U.S. and abroad, we welcome the hard questions and logistical challenges our clients pose.
More questions? Our international expansion team is on stand-by to help. Contact us now.