How Implementing DDP Can Simplify International Shipping For Ecommerce Businesses
The fundamental goal of every eCommerce business is customer satisfaction. With stiff competition all over the internet, providing the best and hassle-free service to your customers has become all the more important. That includes hiring a logistics service company in India, having the most high-quality products, quick feedback, etc.
Now imagine a customer has ordered a few of your products. That’s great, right? The customer is international. You have the products in stock and a good logistics provider to provide timely delivery. So, that’s not a problem either. But what if your customer has to pay duties separately on arrival after prepaying the package at the checkout.
It becomes quite complicated. The high amount of duties may even influence the customer to look for the product at some other place. Who wants to pay import duties excluded from shipping charges anyways. So how do you tackle this situation? DDP comes to the rescue here. Read on to know what actually DDP is and how does it simplify international shipping.
What is DDP?
Delivered Duty Paid, commonly known as DDP, makes it the duty of the seller to pay everything in the buying process. That means as a seller, you will pay for every aspect of the buying process. You will, in turn, charge the customer inclusive of all costs at the checkout. The responsibilities include:
- Arrangement of export packaging and clearance
- Approval of sales contracts and documents
- Providing products for sale
- Getting proof of delivery
- Get custom clearance done
- Paying shipping fee
- Paying storage fee to the fulfillment center
- Paying import duties
If you choose the DDP method, you would have to charge the buyer for the product, shipping, duties, and any other cost incurred. Almost all international transactions are prepaid through an online payment. In this method, the seller has to calculate all the charges beforehand. You need to list the final cost on the website and lack of knowledge can result in losses.
DDU (Delivered Duty Unpaid)
This method splits the responsibilities between the buyer and the seller. The seller has to safely ship the products to the buyer’s country’s customs office. He has to pay the shipping and other charges including that of fulfillment center in India until that point. The buyer then has to pay the import duty and transportation costs of the customs office to their home.
In this method, the seller only has to charge the shipping cost and product cost at checkout. This method is uncommon in eCommerce businesses. Official and necessary documents can be sent this way. DDU does provide a comfortable experience to the seller because of less responsibility.
But the downside is that the buyer doesn’t know the import duties beforehand. They might get hit hard by excessive import duties or delays at customs office which can lead to a sour relationship with the seller.
Benefits of DDP
- Customer Satisfaction
No customer wants to buy a product that comes with hidden costs. A customer never wants to pay additional charges that can substantially increase the original price. Then with competition increasing by the day, he would always find companies that sell them the same product without hidden charges.
And why would you let such a small barrier become your negative point? Once you knock down this barrier, you would notice the increase in international orders at your store.
- Optimized Checkout
Customers are quite dicey when ordering from a different country than theirs. Listing the breakup of charges and clearly stating international duties on checkout will make your store look trustworthy and knowledgable.
They wouldn’t have to do extensive research on the internet to know about the charges. It addresses cost-related questions and makes the buying decision easier.
- Improved customer relationship
Many customers don’t read about additional charges on the checkout page. They may think that they have ordered the product and paid for it already. Customers would naturally get quite annoyed when they receive a text that their order has reached the post office and awaiting payment of duty.
Some customers may rant on your seller page or even cancel the order. Even the best logistics service company in India would still charge you for shipping the order up to that point. It will be a double-sided loss in such a case. DDP can easily prevent that.
- Emulate the Big Dogs
All the eCommerce giants like eBay, Amazon and Target use DDP for international shipments. Once you employ this method in your business, it will be a good step forward towards credibility and legitimacy.
How to calculate the importing duties and other costs?
It can be a tough task calculating dwindling import duties and covering all the charges involved in shipping in various countries. A good logistics services company in Pune like Quickshift can assist you in this. The experienced professionals in such companies have real-time information on shipping costs, import duties, etc. They also provide you with fulfillment centers in Pune for safe storage and packaging.
Understandably, DDP improves customer satisfaction and credibility of your brand. It simplifies online shopping from international websites for the buyer. This makes your brand more reliable and helps you build healthy relationships.