UX Lab - Managing the fulfilment of bulk orders in international ecommerce

Thursday, 13 May 2021

Shipping internationally has always presented vendors with some issues, particularly when sending items in bulk. Trying to determine the weight and volume of any large shipment can be quite a laborious task and often requires manual intervention to calculate, particularly when factoring in other factors and surcharges. This tends to mean that ordering in bulk online requires setting a POA for larger shipments with the shipping costs only confirmed manually offline.

As we discussed in a previous article the UK's withdrawal from the EU has added further complications and legislation that must also now be complied with when shipping to any of their member states from the UK. This might also affect the necessary calculations the vendor has to make in order to account for duties and taxes. They have two basic choices; Delivered Duty Paid (DDP) where the vendor is responsible for any associated costs, and Delivered at Place (DAP) where the buyer is responsible for any import costs associated. Now, the easiest thing for merchants to do is make customers aware that they are responsible for any associated costs and carry on as normal, however, customers don't like getting a large bill for their goods on arrival (especially if they are not expecting it), and would rather know the total cost of their goods upfront, so calculating the complete landed cost when they pay for their goods is often the least disruptive and fairest way to avoid issues. It's one of the many reasons that businesses use customs agents, logistics companies and freight forwarders, but there is another way.

The Challenge

Many of our customers ship internationally, it's often a vital revenue stream for their business, and they are desperate not to upset those channels. Let's take Culpitt for example. They export goods to the majority of the EU, plus a couple of other European countries and regularly ship to Austria, Belgium, Bosnia-Herzegovina, Bulgaria, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Monaco, Netherlands, Norway, Poland, Portugal, Republic of Ireland, Romania, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland and Ukraine.

As the UK’s leading wholesaler of cake decorating supplies many of those orders are for large quantities of goods which can run to several pallets, so shipping costs, taxes, fuel surcharges and duties can quickly mount up. Despite all being in Europe, different countries sit in different zones for couriers meaning that the shipping costs and duties will also vary depending on the delivery address of the order. To provide their customers with transparency and ensure they weren't losing out financially they were marking those export orders as POA online and having a customer service agent ring back the customer with a delivery cost including any surcharges once they'd worked it out. This was quite a manual process, is open to mistakes, took each agent a bit of time & effort as they had to refer to a complicated matrix to calculate the costs and then contact the customer for payment (possibly days later due to the restrictions of office hours). However, worst of all, it's likely to result in people abandoning their basket when they realise they can't just place their order online. They wanted something more efficient which could be calculated on the fly, was not at risk of errors, and could be displayed to the customer automatically at the checkout, with payment processed online.

How it works

Each product has a weight and a cubic volume (how much space it takes up measured by calculating the height, depth and width of one unit) assigned to it. These are used to determine the total weight of an order, as well as the volumetric weight of an order, when all the products within it are combined.

Whichever of the two figures is highest, thus safeguarding the merchant's interest, will determine how many cartons or pallets are required to ship an order overseas (the weight of any pallets themselves is also included in the calculation). Any order that exceeds the maximum volume or weight of 5 cartons would require a pallet. Each pallet has a maximum volume of 1.92m3 and a maximum weight of 500kg, so if the amount of items added to an order exceeds either of those, another pallet is required, and so on.

Once the total number of cartons or pallets has been determined, the system then calculates where the items are being delivered to, whether any customs charges, tariffs or fuel surcharges are applicable, and thus the total landed cost of the goods. If the total weight of the order exceeds 3000kg, however, the system reverts back to POA and a customer service agent will call back with any charges.

In practice

So lets look at an imaginary example of a shipment to The Netherlands. The total product volume of the order is 0.211m3 and the total weight of the products is 127.7kg. The volumetric weight is calculated to be 72.263kg, so the higher number of 127.7kg is taken. The total volume of the product is less than 1.92m3 and the total weight is less than 500kg, so only one pallet required which weighs 20kg. There is a £10 customs charge but no fuel surcharge. So the total cost for delivery to the Netherlands for total weight of 147.7kg is £78 + 0% fuel surcharge + £10 customs = £88.00 delivery cost.

In conclusion

These calculations are all done in real time at the basket, meaning customers can checkout, knowing the fully landed cost of their order when they place it. It also means that customer service don't need to be involved, avoiding potential mistakes and freeing them up to deal with other issues. The key benefit however is that there is no risk of delaying the order, or possibly causing abandonment of their basket once they got to the checkout, as the customer can place their order then and there online, including outside of office hours.

If you're looking to improve your checkout capabilities for international orders, including calculating shipping, duties, and surcharges on the fly then speak to us about using tradeit for your international ecommerce requirements.