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E-commerce In The Global Supply Chain
Kinghood International Logistics Inc | Updated: Dec 26, 2016

   The growth of e-commerce over the past ten years has been nothing less than phenomenal.

   E-commerce is now dominating consumer sales here in the United States and is working its way into most countries on all six continents. In the U.S., it has in many ways both replaced and supplemented retail sales distribution outlets, which had traditionally been the main place consumers go to find and buy everything they need.

   Historically, e-commerce has been in the 5 percent to 10 percent range of sales for the majority of companies, but it has now grown in some industry verticals to more than 50 percent of overall sales volume. And perhaps the most phenomenal part is that it’s still growing.

   These days every global supply chain impacts the cargo shipping industry via air, ocean, truck, and rail as much as any aspect of commercial business activity. In other words, any companies not thinking about e-commerce as a factor in overall sales at both the consumer and commercial levels will be left behind.

   Based on our experiences in helping companies enter into or further develop their e-commerce markets and unique supply chain requirements, we have come up with a few recommendations.

   First, determine the viability of your product sales country by country before committing to any larger initiative. International e-commerce sales can be very different than U.S. domestic e-commerce sales. Test marketing and local resources can assist you in this evaluation stage.

   Next, determine whether your company’s website can be accessed on a local basis. Consumers in many countries have limited, or even no access at all to external internet resources. In some countries, the best access may be through internet trading platforms such as Amazon, Alibaba, Newegg and Overstock.

   You’ll also need to investigate an array of issues when selling into a new market overseas, including competing products and their approach to sales in that country; legal issues regarding the sale of your products in that country; any intellectual property rights issues or concerns, import documentation requirements, other government agency requirements, such as that country’s equivalent to our USDA, FDA, FCC, BATF, etc.; packing, marking and labeling requirements; denied party listing review; and web site entry, either your own or one provider by a third party.

   Amazon has made very clear its plans to use unmanned aircraft systems, commonly referred to as drones, as a delivery mode. The e-tailer and potential aspiring logistics provider began testing the technology for parcel delivery in 2015 and will continue to do so into 2017.

   By comparison, this has become more of a challenge internationally, as many countries do not have the same kind of mature domestic infrastructure for sales and deliveries to consumers and their homes. The importance of resolving this issue comes down to cost. E-commerce sales only works when the cost of shipping from origin to destination is significantly minimized.

   Globally, those companies that have been successful in e-commerce sales in an array of foreign countries have been able to master the cost of logistics and distribution. In order to do this, we recommend the following actions:

   • Partner with service providers that have defined expertise in e-commerce sales and distribution;

   • Consolidate shipments in the U.S. and ship overseas in larger bulk orders to reduce the cost of the international leg;

   • Proactively obtain all the necessary information on packing, marking, labeling and documentation requirements;

   • Make sure the websites you are utilizing contain all the necessary shipping information and costs relative to the buyers;

     • Arrange for competitively priced customs clearance along with the last-mile delivery requirements;

     • And maximize utilization of technology that can bring additional efficiencies to your ordering, shipping and customer service portals.

  Of course, this is much easier said than done. Customs clearance costs and home deliveries are typically an expensive component of the overall sale or purchase.

   As such, e-commerce companies have had to be creative in resolving these costing and business process concerns, especially for low-cost consumer items typically handled individually. Within the context of the global supply chain, e-commerce is being defined by its own expertise in logistics and transportation management and its impact will continue to grow as the e-commerce “freight train” continues full steam ahead.

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