Unlocking the secrets of successful Direct-to-Consumer businesses

Introduction

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Winter is coming ;) and in a few weeks, people will be sharing love (and gifts). The holiday period is well known as the busiest and most important time of the year for shoppers and e-commerce brands.

The holiday season accounts for 20% of the retail industry’s annual sales, and it is often responsible for up to 30% of some independent retailers’ total sales.

Holiday e-commerce sales account for $126 billion in 2018 worldwide, a 16.5 percent increase from the $108.2 billion generated in 2017. It actually had an average growth of 15.8% over the last four years, and it is also expected to grow in 2019.

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For some online retailers, the holiday season is the most stressful one of the year. While for some others, it can be a huge opportunity to capitalize on and exceed your business goals. With Black Friday, Cyber Monday, and Christmas, you have more than one occasion to attract new customers and grow your sales.

So to ensure that you succeed during this period, you will need to prepare and plan every aspect of your business, from marketing to customer service. You will have to make sure that every process in on point for the big rush in operations.

To help you out with that, we prepared for you a list of 6 mistakes to avoid during the holidays period.

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1. Not ordering enough inventory

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This period of the year is high in demand, and more demand requires more inventory. However, too often customers add items to their cart only to find out that it is out of stock. Stockouts can generate a lot of frustration, especially for potential new customers who are visiting your website for the first time. 

To avoid that, make sure to forecast demand so that you know approximately how many products you will sell. If you were in business in previous holiday seasons, you can use historical data to predict sales levels this year. You should also take into consideration other factors such as the products you will mainly showcase, your marketing campaign, and discounts. 

Diving deeper into these numbers will give you some insights into how your products are going to perform.

Once you know approximately how many items you will sell during the season, you can then order enough items for the holiday rush and hopefully, your stock will be full enough by mid-November.

If you are externalizing your logistics processes and inventory management to a logistics provider, make sure that his solution connects to your shop and gives access to real-time data. This is essential if you want to monitor and track your orders, stock levels, and other important metrics.

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2. Ignoring shipping deadlines

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This time of year, I can guarantee you that most of your customers want to receive their orders before December 24th, especially if it is a gift they intend to offer to one of their relatives. 

Since transportation carriers are overwhelmed during the holiday season, they all set deadlines and cutoff dates to when an order should be placed, to ensure it arrives on time for Christmas Eve. 

To set the right expectations with your customers, make sure to highlight your shipping deadlines. Try to communicate around it on your website so that your customers know when they should place their order by and which shipping method they should choose. So don’t forget to add your deadlines to your shipping policy, your checkout confirmation page, and your FAQ.

According to ShipStation, while customers prefer free slow delivery for themselves, they are also 76% more willing to pay for fast delivery when they are buying a gift. 

This means that the closest we are to Christmas, the more customers will be willing to pay to have their family’s gifts shipped on time. In this case, offering a fast delivery option is a clear opportunity to stand out for your competitors, meet your customers’ expectations, and drive more sales.

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3. Spoiling the Christmas surprise

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One of the biggest mistakes that e-commerce brands make during the holiday period is spoiling the Christmas surprise. After all, your customer might live with their companion, and he doesn’t want the gift to be revealed by your beautiful branded boxes. 

To avoid that, make sure to offer a gift-wrapping option on your check-out page. This will help you distinguish yourself from your competition and show to your customers that you care about every little detail. 

Instead of ruining the surprise, opt for making it even special by adding a small “thank you and Merry Christmas note”. This will not only surprise positively your customers, but it will also show them that you care.

Undercutting your prices is not the only way to differentiate yourself from your competitors. You can choose to focus on other factors such as quality of service, convenience, and empathy. This will help you to build long-lasting relationships with your customer base, attract a loyal following, and succeed in the long-term.  

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4. Not providing live support

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During this period, everyone is in a rush to get gifts fast and make their purchase before the sales are over. To help your customers through that consideration phase, you will need to ensure that they have all the information needed to make the right purchase decision.

Taking a proactive approach to customer support is crucial if you want to drive more sales for your business. For that, you will have to optimize your product pages and update your FAQ with all the questions related to shipping, returns, discounts, and special offers.

You can also implement live chat support on your website. By doing so, you will be able to answer customers who are often looking for fast answers and are in a hurry to move on to the next sale or product on their gift list.

Think about automating your support process, as it can help you to respond faster to your visitors and convert these visitors to customers. There are many solutions on the market like Zendesk, Gorgias, or Botmind that can also help you to automate your chat.

Finally, make sure to train your customer support team properly before the rush period arrives.

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5. Not extending your return's deadline

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Since a big part of the products purchased during the holidays are gifts for relatives, more than 11% of all items ordered during that period are returned.

It is, then, crucial for you to extend your returns deadline and give people more time than usual to make returns or exchanges. This will make your customers feel more secure with the purchase and have more trust in your brand. 

Making returns painless will help you boost loyalty and encourage your customers to purchase more items from your website, as it will act as a major differentiation point in the eyes of your customers

In this case, don’t forget to highlight your extended return policy on your website and communicate around it via email and social media. This will help you more exposure and attract more customers.

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6. Neglecting shipping addresses validation

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One of the biggest mistakes e-commerce brands can make during the holiday period is neglecting to check and validate shipping addresses. 

Actually, with the rush and all the buzz around sales and special offers, many customers accidentally place their orders with the wrong shipping address. 

Shipping to an incorrect address may ruin the whole experience. It will leave you with no choice than having the package returned to your warehouse, which means more costs, less profit, and unhappy customers. It also slows down the efficiency of your logistics during the time of the year when you need it the most.

So remember to validate the shipping address before making the delivery of the order. This will help you avoid last moment confusion and will give you the opportunity to fix it proactively by contacting your customer and changing the address. 

This also shows your customers that you care about them and about their experience. Thus, you will be able to build trust and ensure they come back for more.

Finally, even if checking every shipping address is a huge and tiring task, in the long run, the extra time it takes is worth the pain it saves. You can also opt for some tools like Bigblue, which does it automatically.

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Conclusion

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The holiday period can be really intimidating for e-commerce owners. It is a really busy period, competition is fierce, and the customers’ expectations reach an all-time high.

To ensure that you survive and you succeed during this period, taking a proactive approach is crucial. Letting your customers know that their packages will arrive on time is also essential if you want to drive more sales and boost conversions.

As mentioned earlier, focusing on price discounts isn’t the only way to differentiate yourself from your competitors during the holidays. You can opt for other factors such as personalizing items with gift-wrapping and thank you notes or extending your return policy deadlines. 

Avoiding these mistakes and implementing these solutions is no easy task. 

For sure, it takes time, but this will be a time well spent!

Gone are the days when business decisions were made based on gut feelings and personal preferences. Nowadays, entrepreneurs and managers rely on data to gain a clear and accurate understanding of their businesses and make informed, objective decisions. This is true for businesses of all sizes, from multinational brands to small e-commerce shops. By collecting and analysing the right data, businesses can learn more about their customers and offer greater value through their offerings.

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In the world of e-commerce, logistics plays a key role in the buying experience. This is why it is crucial to track the right KPIs related to logistics. This allows you to gain insights into how every aspect of the funnel is performing and make better decisions to ensure your brand can scale in the right direction.

To help you out, we've selected six logistics KPIs that every e-commerce business (regardless of what you sell) should track:

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1. Delivery Lead Time:

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It refers to the amount of time between the moment an order is placed and when it is delivered to the customer.

Lead time has a direct impact on customer satisfaction. No one wants to wait several days to receive their new lamp, and no one wants to receive it later than expected.

Tracking your average lead time by country and by carrier will help you give the most accurate information to your customers and so set the right expectations. I'm not talking about the lead time the carrier is promising on its website, but the real one that you are analysing.

Another great way to optimize your delivery lead time is to work with the fastest carrier by country.

Let’s say for example that Carrier X takes 3 days to ship your lamps to Spain and 4 days to Portugal, while Carrier Y takes 2 days to Spain and 5 to Portugal. Then it is much more interesting for you (and your customers) to work with Carrier Y in Spain and Carrier X in Portugal. You can also work with the carriers in order to find ways to reduce your lead times, but you must remember that this shouldn’t come at the cost of quality.

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2. % of Customer Service Inquiries Related to Logistics:

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Refers to the amount of customer service inquiries related to logistics against the total amount of customer service inquiries.

This percentage will help you determine how effective your logistics processes are. If 90% of the customer service calls you receive are related to logistics, then it reveals that your logistics processes aren’t efficient at all (and that you should probably get a new logistics provider).

You can segment this ratio into categories: inquiries related to shipping, returns, delays, etc… This will also help you spot the problems that your customers are facing and complaining about, and solve them.

If 30% of all the inquiries are about the return process, then maybe you should take a look at your return policy and optimize it. 

The data collected by your customer service team is invaluable as it provides the most accurate insights on the main bottlenecks your customers and business are facing.

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3. % of Damaged Goods per Carrier:

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It refers to the number of damaged goods per carrier against the total goods shipped by the same carrier.

Receiving a damaged order is one of the most frustrating experiences that customers might face. Tracking the percentage of damaged goods for each carrier will highlight which ones are the most reliable and ensures that you work with partners that have the same quality standards as yours.

You will definitely want to keep the ones with the lowest percentage, thus the best quality of service, and stop working with the carriers that have the highest percentage.

Don’t forget to work closely with your transportation partners to brainstorm and optimize your processes. 

Since damaged goods means revenue loss, tracking this KPI will not only lead to improving your customers’ satisfaction but also reduce unpleasant costs and increase organic revenue.

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4. Safety Stock or Buffer Stock:

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It is an additional quantity of an item held in inventory in order to reduce the risk of stockouts. It acts as a buffer in case your item is selling faster than planned or your supplier is unable to deliver additional units at the expected time.

Here’s the formula to calculate it:

Safety stock = (Maximum daily usage * Maximum lead time in days) – (Average daily usage * Average lead time in days).

To help you understand it completely, let’s imagine you sell home furniture online.

Your average daily sales for the new lamp are 20. It takes 4 days, after the reorder, for the new inventory to arrive at your warehouse. During weekends and bank holidays, you can sell as many as 25 lamps per day. The maximum time for your supplier to deliver the new inventory to your warehouse is 6 days.

Safety Stock = (25 x 6) – (20 x 4) = 70

So your safety stock for the new lamps is 70 units. 

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Many growing e-commerce brands forget to update their safety stock thresholds. Don’t make that mistake!

If you’re scaling your e-commerce operations, make sure to update your safety stock thresholds every month. Since you’re growing and making more sales, you might want to adjust your safety thresholds according to your sales growth.

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5. Reorder Point:

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It is the inventory threshold that signals the perfect time to order new inventory. It helps you ensure that you reorder in time and avoid running out of stock. Here is the formula to calculate it: 

Reorder point = (Items sold per day) x (days it takes for new inventory to arrive) + safety stock 

To illustrate, let’s take the previous example with the lamps:

Reorder point = (20 x 4) + 70 = 150

In this case, the perfect moment for you to order new inventory from your supplier is when it reaches 150 units in stock. 

As already mentioned, many growing e-commerce brands forget to track and update their safety stock and reorder point which can result in stockouts, lost revenues, and frustrated customers.

In case you’re working with a logistics provider, make sure that his solution natively connects to your store. It is also essential to have a system that automatically updates your stock levels whenever a product is sold or returned. This will help you to accurately monitor your inventory and have an accurate decision-making.

It is important to set a threshold for each item so that you’re alerted automatically when the limit is reached. This will help you gain time and avoid checking your stock levels sometimes.

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6. Return Rate:

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It refers to the number of orders returned against the total number of orders shipped.

According to Statista, returns will cost 550 billion dollars by 2020 in the US only. This represents 15% of all revenues generated from e-commerce, and it reveals to be a clear conversion and profit killer. Despite that, online retailers are still overlooking this part of the process. And that’s a huge mistake. 

Returns, if managed properly, can be a great opportunity to showcase the quality of your services. Thus, racking your return rate is essential to better understand the state of your customers and your business. 

Here’s how to calculate your return rate:

Return Rate = Amount of products returned / Amount of products shipped. (hesitating between products and orders)

To illustrate, let’s take the same example of the lamps. Let’s imagine that you sold 348 tables and that 19 of those were returned. In this case, the return rate of the lamps is:

Return Rate = 19 / 348 = 5.4% 

Doing this for every product will help you spot which specific products are causing problems to customers. 

You will be able to point out any quality or communication concerns related to the specific products that are returned. Maybe some of them have mismatching product descriptions and don’t meet your customers’ expectations. 

Reducing the number of returns will help you to save costs, increase customer satisfaction, and gain additional revenue. 

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7. Conclusion:

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Running an online business is not an easy task, especially when the competition is fierce and customers are more demanding. Using a data-centric approach and basing your decision-making on accurate and objective insights is essential to provide great customer experiences and grow your business.

If you are externalising your logistics operations, make sure to work with a partner who has the same approach as yours, who connects natively to your shop, and who gives you access to real-time data.

Tracking these KPIs will help you improve the efficiency of your logistics processes. You will be able to better understand the state of your operations, spot the main bottlenecks, and design the best solutions. 

Optimizing these KPIs will ensure that you scale your business in the right direction and that you build the right foundations for future growth.

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In the e-commerce industry, logistics play a pivotal role in the customers’ experience. When a customer orders the new pair of socks you just launched on your website, he expects it to be shipped at his place quickly and for free.

In fact, 91% of consumers leave when shipping isn’t free or fast enough. Shipping is the main factor that customers take into consideration before making their purchase decision. 

To ensure that you actually get these customers to shop from your store, you will not only need to offer a convenient shipping experience to your customers but you will also have to inform them about it and make sure they have all the necessary information before the checkout process.

Having a detailed shipping policy that provides all the necessary information to your customers and is easily accessible will help you build trust in your brand, reduce cart abandonment rates, and drive more sales.

To help you out with that, we will share with you some ideas that will help you optimize your shipping policy:

1. Share all the necessary information:

The primary goal of using a shipping policy is to provide your customers with all the necessary information regarding your shipping processes and how your products will arrive at the front of their doors. Information such as:

• Courrier options:
  This covers all the shipping companies that you use to get your products delivered to your customers. It will help your customers understand who your partners are and have a better idea of your service.‍
• Service types:
  Here, it is crucial for you to cover all the logistics related services. So you will have to share all the different shipping options that your brand offers such as same-day shipping, standard, or click and collect.
  Providing many shipping options to your customers will help them choose the most convenient ones according to their preferences and needs.‍
• Transit time:
  Okay, this might be obvious for services such as same-day shipping or overnight shipping, but it certainly is not when it comes to standard and international shipping. Your customers want to know how much time they’ll be waiting before they get their products. So in order to reach their expectations, it is crucial to share the average lead times per region and how many business days it will take to receive their items.‍
• Pricing: 
  According to the Baymard Institute, the main reason (53% of the times) behind cart abandonment is extra costs (shipping, fees, taxes) that made the total cost either too high or unclear for the customer. Try to think about it, do you know anyone who likes to pay a certain amount and then discover later that he has extra expenses? Or who likes to pay more for the shipping than the product itself? No one wants to pay a 15$ extra cost, especially if the new pair of socks they bought costs 11$.
  So if you want to ensure that your customers aren’t running away from your site before making the purchase, try to include all the shipping related costs to your policy. 
  If you offer free shipping, make sure to highlight the conditions like the minimum order value or the products that qualify for free shipping. This will help your customers to better understand your pricing and will have fewer surprises.‍
• Tracking:
  Customers expect you to keep them updated about the state of their order. Showcasing all the information related to tracking is, thus, mandatory. We’ll cover that deeper in the following paragraphs‍
• Restrictions:
  If you cannot ship your products to some places or if your products are prohibited in some regions (don’t worry, socks are just fine everywhere), you might want to share that with your customers. You don’t want your customers to through the whole checkout process only to find out that they can’t receive your products after all. 
  

Providing all the necessary information to your customers will ease the work of your customer support team, as they will have fewer inquiries to answer. (Of course, this doesn’t mean that you should not leave your customer support email, in case they want to contact you.)

By giving the right information straight from the beginning, you’ll be acting proactively and you will avoid any bad surprise for your customers, and that from the moment they hit the purchase button till the moment they receive their parcel at their doorsteps.

2. Highlight your shipping policy:

It is crucial to make your shipping policy easily and quickly accessible for your customers. Think about adding it to the header of your website and thus make it visible from any page of your website. This will allow your customers to check it at any stage of their experience and to find the information they’re looking for at any time.

Also make sure to showcase it in your cart, products and checkout pages. This will help your customers to find all the needed information before making their purchase decision and thus build trust with your brand.

Another good way to highlight your shipping policy is to attach to the order confirmation email so that your customers can easily find it even after they make their purchase.

3. Follow up information:

One of the most important parts of your shipping policy is the follow-up and the tracking system that your customers will use to know where their products are, by that I mean, at which stage of the shipping process is their order! 

According to Metapack, 81% of customers check the tracking page at least twice for each order. In order to meet their expectations, you will have to give them the opportunity to track their shipment online and in real-time. 

The main purpose of tracking emails is to facilitate the tracking of your customers' orders, so it is necessary to add the related data:

• The link of the tracking page
• The expected date of arrival of the package
• The tracking number
• The summary of the order
  

This is an important step to ensure proactive support and it will help your team to avoid answering the same question (where is my order?) hundreds of times again. Actually, 47% of online customers choose not to buy a second time because they didn't know where their package was either during fulfillment or delivery. 

Since tracking emails have a really high open rate (64%) and customers visit follow-up pages 2.4 times on average, you could take advantage of it by showcasing complementary products that might push your customers to make another purchase. 
Don’t forget to add to your policy page all the information and links related to the follow-up and tracking system. This will relax your customers before and after they make their purchase.

4. Leave your contact details:

Packages get lost or are misplaced even with the best shipping processes in place. After all, you give them to your courier and he could deliver them to the wrong address or the packages could be lost in transit. 

So many things might happen between the time you hand the packages to the carrier and the time it gets to your customers, and when it does, you want to make it easy for them to contact you and give you all the necessary details. For that, make sure to add your contact details in your policy page and tracking emails.

Establishing good communication processes is an important factor in delivering the best customer experience ever.

5. Don’t forget your return policy:

While a shipping policy might include some information about returns, it clearly isn’t a return or refund policy. If your customers’ packages are lost or damaged, creating a detailed return policy alongside the shipping one is crucial to guide customers through your reverse logistics processes and avoid any more inconvenience.  

According to Invesp, 92% of consumers will buy something again if returns are easy. Having an effective return policy is a clear opportunity to turn a negative experience into a positive one. 

Your return policy should help you cover all your bases by making clear what your company’s stance is regarding damaged product returns, return shipping costs, and incorrectly delivered purchases. Taking this proactive approach when it comes to returns will help you build trust, showcase your quality of service, and ensure that customers are coming back to your website.

6. Conclusion: 

Logistics is at the core of the e-commerce customer experience whether you are selling sock or fridges online. This had led customers and other online businesses to set high expectations related to shipping and returns. Amazon, for example, changed the whole industry by launching its Prime Delivery. To meet these expectations, you’ll need to provide the best experience possible and this starts with your logistics (shipping and return) policies.

Remember that if you provide your customers with the right information to support their decision, you will not only drive more sales but also gain satisfied customers and that is the fundamental purpose of a shipping policy: break down clearly and simply all the shipping related information to support the customer before, during, and after the purchase decision.

The payment industry is often regarded as a complex and quite opaque ecosystem. For someone who has not been initiated to the payment world, it can be pretty hard to understand who are the different players involved in transaction processing, what are their roles and how the different pricing models are built. In this article, we are going to answer these questions and we will see how you can actually build a payment structure that drives revenue and supports your growth.

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1. Understanding the payment process

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Let’s start with the basics. To be able to optimize your payment performance, the first step is obviously to understand how transactions are actually processed. There are multiple players involved in an online transaction to make the money transfer from the customer’s bank account to the merchant’s. There are two steps in the transaction: the Authorization Process and the Settlement Process. During the Authorization Process, the bank of the customer is queried on the capacity of the customer to pay the amount corresponding to the purchase. Note that during the authorization, the transaction’s value is deducted/put on hold from the customer account. The settlement (capture) can be requested up to 7 days later by the merchant. The diagram below presents the different actors and how they cooperate:

• Authorization Process: 1 — The customers communicate their card information through the payment gateway (Payment Gateway providers can be Stripe, Adyen, Checkout.com…). 2/3 — The acquirer sends the authorization request to the bank of the customer through the Card Network (card networks can be Mastercard, American Express, UnionPay…) 4/5/6 — The issuing bank analyzes the transaction and accepts or declines it. It communicates the answer to the acquirer through the card network. The Issuing Bank’s answer is then communicated to the merchant and its customer.
  
• Settlement Process:
  7 — The merchant sends the card information of the customer to the acquirer to allow it to make the money transit.
  8/9/10/11 — The Acquirer collects the funds from the issuing bank and sends the money to the merchant.

What is important to understand is that the communication between the Acquirer and the Issuing Bank is the critical part of the whole process. As a merchant, you obviously want the Issuing Bank to authorize the transaction. We will see later that some Acquirers have better connections with some Issuers, which increases the chances of the transaction being accepted. One of the key KPI of your payment performance is your Authorization Rate (successful transactions / total transaction requests).

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2. Work with the rights Payment Service Providers

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Before thinking of any optimization actions, the first thing you have to do is to find the most relevant Payment Service Provider(s) for your business.

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The parameters you need to take into account

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Payment Service Providers (PSPs) allow merchants to accept a wide range of Payment Methods, most of the time in several areas.

The services provided by Payment Services Providers mostly differ on:

• The payment methods supported (credit/debit cards, direct debits, online banking, wallets…)
• The currencies supported by the gateway
• Features & integrations provided
• Security and uptime (Be sure to work with a PSP that has the relevant certifications: PCI DSS Level 1)
• The pricing (most of the time, a flat fee + a percentage on each transaction)

The first step is thus to analyze your customers, or potential customers, to make the best choice. You also have to take into account your development strategy if you plan to open new markets and to accept payments in more areas in the future.

Broadly speaking, keep in mind that Payment Service Providers are more likely to deliver a good performance with issuers the most represented in their domestic market as they have better technical connections with local issuers than a foreign player. To have more complete information on the parameters to take into account, you can read this article about how to choose your Payment Service Providers.

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How to compare different payment service providers

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You can split PSPs into 2 different categories. On one hand, you have historical players of the payment industries: the banks. They will often provide good pricing for acquiring and processing services but they don’t have the agility to provide the best level of user experience or the most features. From our experience, integrating their APIs can be challenging because they tend to be a bit archaic. On the other hand, you have the “new generation” of payment providers. They are focused on their payment service and often provide a more “developer-friendly” integration and easy-to-use dashboards. They will also be more willing to provide good acceptance performance on multiple markets and to better manage cross-border transactions. These newcomers can however be more expensive, as you may assume!

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Talk to your industry peers

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A good way to gather insights about which Payment Service Providers will meet your expectations is to talk to your counterparts. There are plenty of world-class conferences that bring together all the stakeholders of the industry (payment teams, PSPs, banks...). Among the most famous ones, with several dates per year all around the world: Merchant Payments Ecosystem Conference, Money 2020, Merchant Risk Council. Here is a list of the best events you can go until the end of 2019, you can also check The Paypers.

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2 great tools to benchmark the PSPs:

• Chargebee, which provides a subscription billing solution created a free online comparison of different Payment Service Providers. It gathers some of the key elements about their offers (pricing, settlement process, compliances, payment methods and currencies supported, etc…).
  
• Telescope by ProcessOut: a tool you can start using for free that allows you to audit your payment infrastructure and to compare your payment performance with those of your industry peers and competitors. It doesn’t require any technical integration and it gives you some recommendations about how you could start optimizing some KPIs.
  

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Understand the pricings

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The price you pay to a PSP for processing a transaction can be hard to understand and quite opaque. There are two major kinds of pricing: tiered pricing and interchange pricing.

Tiered pricing is pretty easy to understand. You define with your payment provider what is a standard transaction for your business and each of these transactions will be charged the same way, with, most of the time, a flat fee + a percentage (entry tiered pricing is 2.9% + 0.3cts per transaction in the US and 1.4% + 0.25cts in EU).

Interchange Plus pricing is a bit harder to obtain from a provider and addresses companies with a high or a fast-growing volume of transactions. In a few words, your PSP will take a markup on the fees charged by the other players involved in the transaction. You can read Interchange Plus pricing vs. Tiered pricing to understand ‘who charges what’.

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3. Use at least 2 PSPs

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Optimize on acceptance performance

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If you want to start optimizing your payments, it’s essential to work with, at least, 2 Payment Service Providers. Some big players in the e-commerce industry are using more than 50. All the idea of payment optimization is to identify some patterns of transactions and to find the best partners to process these different groups of transactions. Apart from a few very specific businesses, it’s impossible that one PSP can deliver very high performance on each of your transaction patterns. Their performance will vary according to the areas, the payment methods, the issuing banks, etc…

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Optimize on pricing gaps

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Moreover, one of the biggest optimization leverage is the pricing of your providers. Similarly to the technical performance, you can find out which of your providers will charge you less for each kind of transaction.

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Be ready for the next step of optimization

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We’re going to see later that working with multiple providers will allow you to “retry your transactions”, using a third-party provider. It means that if your ‘PSP A’ can’t get the approval from the issuing bank for processing the settlement, a ‘PSP B’ and even a ‘PSP C” may try, maximizing significantly your Authorization Rate.

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4. Identify your strategic payment KPIs

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Depending on your industry, business and transaction parameters, you have to identify what are your most strategic payment KPIs. PSPs give you plenty of data, a good way to analyze this data with relevance is to aggregate it in a single place. Some payment analytics platform will provide this service. At ProcessOut, we have built Telescope this way: an audit and monitoring tool you can start using for free without any technical integration.

Here are 3 examples of KPIs you could start monitoring and improving:

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• Authorization Rate

= Successful transactions/total transaction requests

By analyzing your Authorization Rate per country, per card network, per gateway, etc., you will understand which transactions fail and can start to work on it. If you want to go deeper to this topic, you can read Money's on the table, check your Authorization Rates!

• Net authorization rate

This is authorization rate when removing duplicated transactions (automatic retries or users retrying at a later time). It is not easy to compute, but Telescope does it automatically.

• Average Fees Paid

= Overall amount of fees paid on transactions/number of transactions

In the same way, you can analyze it in different timeframes, according to your different PSPs, the amount of the transactions, etc… And start to think which patterns of transaction you should process with which PSP.

• Chargeback Ratio

= Number of chargebacks/number of transactions

If you’re not familiar with what is a chargeback, you can read what is a chargeback. This KPI helps you identify how much your business is impacted by fraud.

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5. The power of payment ‘Smart Routing’

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As the payment challenges of companies selling online continue becoming more and more strategic over the years, payment teams have started to do what is called ‘Static Routing’ and ‘Dynamic Routing’ (also named Smart Routing) to improve their payment performance. The global idea is to route your transactions to the PSPs that will deliver the best performance at the lowest price according to their parameters.

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What is Static Routing

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The purpose of Static Routing is to define Routing Rules to send your transactions to different payment providers. In practice, Data Teams work with Financial teams to determine these rules according to the strategy and the KPIs the merchant wants to improve.These routing rules could be:

• Route the transactions that come from a German Issuing Bank to PSP B
• Route the transactions < 25$ to PSP A
• Route the transactions > 199$, from the Card Network X, to PSP C

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What is Smart Routing (Dynamic Routing)

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Smart Routing is about using data and algorithms to reach the highest level of performance.

The algorithms will learn from the transactions of the past and from how these transactions have been processed to identify patterns and smartly route transactions to the best processor.

You can find third-party providers, FinTechs that do not actually process the payments but are focused on building the most powerful Smart Routing technology.

With the emergence of the internet and e-commerce, selling goods internationally has never been this easy. A customer could be sitting on his couch in Paris right now and still buy a product from Thailand instantly. This reveals itself to be a golden opportunity for e-commerce owners to grow their brand and expand their operations globally. 

According to Statista, global e-commerce revenues are projected to grow from 3 535 billion dollars in 2019 to 6 542 billion dollars in 2023 with a potential market of 4 billion people.

Expanding your e-commerce globally offers the opportunity to create a worldwide presence for your brand, which will drive sales and increase your revenues. 

You are at a point your sales are starting to be well established in your country and you are willing to grow outside of you frontiers, you may even have had your first orders internationally. We will put ourselves in the shoes of a European brand that wants to expand in the rest of Europe and further, though if you have questions from other countries, feel free to shoot me a message or to join our facebook community

Taking your brand worldwide comes with a little bit of apprehension, after all, you will be dealing with completely different processes. You will have to send your products to multiple countries and this implies dealing with different customs, tariffs, rules, and regulations while, at the same time, making sure that you still offer a pleasant experience for your customers. 

After all, customers still expect you to deliver their orders pretty quickly and for a small shipping cost (if not for free), that’s why you’ll need to

Here are some steps we prepared to help you implement cross border shipping, meet your customers’ expectations and ensure that your global expansion is successful: 

1. Choose the right service provider:

To ensure a successful global expansion, choosing the right carrier is crucial.

There are many carriers out there, so make sure to choose one that has low delivery lead times to the markets you’re targeting. Shipping cost is also another factor to take into consideration. You don’t want your customers to pay for shipping as much as they pay for your products, especially when you know that high shipping costs is actually the top reason for cart abandonment.

Double check if your carrier has an efficient tracking system, this will help you ensure a constant communication with your customers about the state of their delivery. 

Choosing a carrier who covers a large network is also crucial for your global expansion, as this will help you to ship your products to almost anywhere in the world.

2. Understand international logistics and customs clearance processes:

Global expansion and cross border shipping require a minimum understanding the customs clearance processes and its legal requirements.

Customs clearance is the documentation given by customs authorities to prove that the shipper has paid custom duties and completed the examination and assessment of the goods he’s importing or exporting. 

To make sure you successfully go through these processes, it is important to understand every concept of it:

EORI Number: 

The EORI Number is a European Union identification number used by customs authorities to easily identify a business. The purpose is for statistics, fiscal declarations and security.

To ship abroad, you have to declare your business to the administration to get the EORI number, because all businesses going through EU customs must have one. So make sure to declare your e-commerce before starting your expansion abroad.

Harmonized System Code (HS Code):

The Harmonized System is a global system that classifies everything (yes, literally everything) on the planet with up to 10 digits.

The Harmonized System is an indispensable tool for international shipping and trade. It is considered as a universal economic language (used by over 190 countries) that is at the core of the customs clearance processes. The system is well structured and is supported by many rules and laws to make its usage uniformized around the world.

Customs officers need to use the HS code to clear all the goods crossing international borders. It is also used by governments for internal taxes, trade deals, controlling goods and quotas, and making economic research.

Failing to put the correct code for a product will lead your shipment to be delayed and could result in higher duty and taxes. If you’re in doubt about the HS code of your product, it is more prudent to consult customs directly or experts in the customs clearance companies for advice on the correct HS codes to use.

Customs fees:

Customs fees are fees that you need to pay to ensure that you product is cleared successfully at customs, they are divided into 3 categories: Tariffs, VAT and handling fees.

Tariffs:

Tariffs are taxes paid on foreign goods imported into a country. It represents a percentage of the CIF Value. The CIF value is the addition of the merchandise price, the transportation cost, and the insurance fees. 

Each country has a threshold for import, it means that under that amount, you won’t have to pay customs tariffs. The threshold in Europe is 150 euros, which means there’s no tariff applied to products valued less than 150 euros.

Note that there’s no tariff applied for products shipped inside the European Union.

Value Added Tax:

VAT is a consumption tax that applies to all commercial activities including services and goods selling. VAT is paid to the revenue authorities by the seller of the goods, but it is actually paid by the buyer to the seller as part of the price. It is thus borne by the final consumer. 

The VAT paid by the consumer is calculated as a percentage of the CIF Value. The percentage of VAT applied to different goods and services varies from one country to another.

Inside the European Union, it is applied on business owners and goods sellers based upon their Annual Sales Income (VAT excluded) in the destination countries. 

Each destination country has its own Annual Sales Income threshold. If your revenues in the destination country are under the threshold, the VAT applied will be the one from the departing country.

Knowing how complicated it can be to understand (I know the struggle), let’s illustrate that with an example. As said in the beginning, let’s suppose you’re an e-commerce based in France and you want to expand your business to Europe and more specifically to Czech Republic. The Annual Sales Income threshold in Czech republic (your destination country) is 44 873 euros and your revenues in the country are below the threshold, the VAT applied in this case is France’s one.

When it is over the threshold, the VAT applied is the one from the EU country of destination. Taking the previous example, if your revenues are above 44 873 euros in Czech Republic, you will have to pay the VAT in Czech Republic.

Outside of the European Union, VAT will be charged based on the Incoterm you chose to use.

Incoterms are a set of rules which define where a transfer of responsibility occurs between the buyer and the seller regarding merchandise, customs, insurance, and costs. Incoterms are published by the International Chamber of Commerce (ICC) every 10 years.

There are 11 incoterms but when it comes to the e-commerce and B2C shipments outside the European Union, the 2 most used ones are DDP and DAP:

• DAP: Delivery at Place
  Here, end customers need to pay the customs fees upon pledge arrival before being able to collect their parcel. The selling price on your website should be free of VAT.

• DDP: Delivery duty paid
  Here, the sender (you) pays the customs fees in advance to the carrier. End customers collect their parcel without paying any additional fees on arrival. In this case, you can add VAT to the selling price on your website.

To provide the best experience possible for your customers, I advise you to opt for DDP as you’ll avoid any bad surprise for your customers won’t have to worry anymore after their purchase is made and this makes life easier for them.

Handling fee:

The handling fee is the amount charged by the carrier for the customs clearance. If the carrier has provided his help in managing and sorting all the customs related documents, it is natural that he’ll charge some fees for the service provided.

Now that we’ve gone through all the fees that you have to pay related to customs, we’ll move to the document that you’ll need, such as invoices, customs declaration, and certificate of origin.

To illustrate all the points above, let’s imagine that your brand is doing well in Europe and you want to expand further, you sold a shirt to a customer based in Brazil and here’s your context:

• Shirt value: 38€.
• Shipping fees: 8€.
• The tariff for the product to enter Brazil is: 35%
• The tariff threshold: 45€
• VAT for fashion in Brazil is: 17%
• Handling fees: 2€
  

Based on these data:

• Your product value is: 38€
• Your CIF value is: 46€ (38 + 8)
  

Knowing that your CIF value is above the 45€ threshold, so you’ll have to pay the tariffs.

• Tariffs = 46€ x 0,35 = 16,1€
• VAT= 46€ x 0,17 = 7,82€
  

If you chose DDP, the total amount you’ll have to pay as customs fees will be: 25,92€

(In this case, VAT should be included in your selling price and the customer should pay it during the purchase on your website)

If you chose DAP, the total amount you’ll have to  pay as customs fees will be: 18,1€ and your customer will have to pay the 7,82€ for VAT.

Customs Documents:

In order to go through customs, the officers will look at the paperwork needed for your shipment to cross the borders. Here’s the list of documents you’ll need for the customs clearance process:

Invoice:

A commercial invoice is an important document needed to clear your package through customs when shipping internationally. It is a proof of transaction between you and the buyer. It needs to be prepared by the seller (exporter) and can be submitted in any language, however, an English version is recommended to ensure a smooth customs clearance process.

The commercial invoice contains basic information such as the name and the address of the seller and the buyer, the date of issue, the invoice number, the name and the quantity of the goods shipped, the CIF Value, the HS code, the terms of delivery according to the appropriate Incoterm, etc…

When it comes to non-commercial shipments like gifts or samples, you can use a proforma invoice. It provides an estimate for the final amount of an order and can be used in importing and exporting to declare the value of goods for customs. A proforma invoice looks almost exactly the same as a commercial invoice. However, it should clearly state that it is a proforma to show that it is only an estimate and that the amount hasn’t been paid.

Customs Declaration:

Devided in 2 parts:

CN23:

CN23 is a customs document used for international trade when goods (which commercial value is under 1000 euros) are being transported outside of the European Union. It contains the nature of the goods, the country of origin and the customs tariff number. The document informs customs of the contents of your shipment and helps them to check it for prohibited or restricted items. Not providing the declaration may lead to delays on your shipment or your goods to be seized by Customs. 

SAD: 

The single administrative document (SAD) is a form used for customs declarations for shipments, in which commercial value exceeds 1000 euros. Just like the CN23 it is used for exports outside the European Union. 

Certificate of Origin:

An important part of the customs clearance process is to prove the origin of items that are shipped, in order to do so there are 2 ways:

• Invoice Origin Declaration:

If the CIF value is smaller than 1000 euros, then you can use the Invoice Origin Declaration, which certifies the origin of the products easily and directly on the invoice.

• Certificate of origin:

If the CIF value exceeds 1000 euros, then you’ll have to use a Certificate of Origin. It is a document declaring in which country the good was manufactured. It contains information regarding the product, its destination, and the country of export. It represents an important form because it can help determine whether certain goods are eligible for import, or whether goods are subject to duties.

PS: The origin of your product is the last country where a transformation occurred.‍

3. Conclusion:

Expanding your e-commerce brand to a global scale takes a lot of time and effort, you will need to ensure that you products arrive in a fast way to satisfy your customers expectations, for that it is necessary to understand and master all the cross-border processes. This might be easy to manage if your volume is low but in case you have a bigger volume, I advise you to partner with a logistics provider who will be able to automate all these processes and will generate automatically all the documents needed for customs clearance.

Consumers nowadays are flooded with options when it comes to online shopping, this makes it so hard for e-commerce brands to differentiate themselves from their competitors.

Forget the time when advertising was the main way for brands to attract customers. Today, running 2 or 3 campaigns per year will not help you anymore into growing your business and that’s because consumers’ behaviour have changed.

Consumers, now, are educated, well informed, and have access to an unlimited amount of information and data thanks to internet but, despite connecting us to the entire world transactionally, internet has created a huge social gap that is left unfulfilled. 

The most successful e-commerce brands understood it: it’s not about advertising and selling. Even if it still helps, it is not what will make you stand out from the crowd (and omg the crowd is huge). It is about filling that social gap for the customers. It is about creating a more “human” experience, it is about building a relationship that is beyond just a simple transaction. 

The recipe for success is about serving customers, solving their problems, educating them, building trust, and bringing them together behind a larger cause. The recipe for success is about building a strong community behind your brand.

In fact, marketing today has become so intrusive that people are tired from it. I mean come on, who enjoys being interrupted by 3 ads while watching their favourite YouTube channel?

Let me give you the answer: absolutely no one. (Yeah not even the person who made these ads!!)

Consumers today want to know what makes your brand different, and it has nothing to do with the 50 cents discount you launched yesterday. They want to know about your values, your story and what you do daily as a business to make the world a better place. 

"People don't buy what you do; they buy why you do it. And what you do simply proves what you believe” - Simon Sinek

To stand out from the crowd, to reach and attract more customers, building a community should be at the center of your priorities. That’s why we prepared for you this list of X ways to help you build and grow your community but before we dive into it, let’s first define what a community is:

Community is a group of people that care about each other and feel they belong together. - Fabian Pfortmuller

To put it in a business context, building community around your e-commerce brand is about caring and creating a strong sense of belonging with your customers. This means that it is less about you and your business and more about the people you’re serving as a brand.

Now, let’s move to the 5 steps guide to build a community:

1. Build your brand identity:

It is clearly impossible to build a community around a business that you don’t understand, so the first thing to do is to build your brand’s identity internally. 

For that you will need to define what your brand stands for and what makes it different from your competitors. Think about why you launched your e-commerce in the first place (hopefully, it’s not just about making money) and what is the added value that you want to bring into your customers’ lives. It could be anything ; you might have created shoes for travellers like Tropicfeel did because you did not find the right product when you were travelling, or maybe 

During this phase, you will have to work on your brand’s purpose and core values. These will be the pillars on which your community will be built upon. 

To help you during this phase, you can ask yourself some of the following questions:

• Which problems are you trying to solve everyday?
• For which purpose did you create our brand?
• What are your values? and which ones do you want to convey as a brand?
• What is your vision for the future and how do you want to shape it?
• Which impact do you want to have as a brand?
  

Once you define your values and your purpose as a brand, don’t forget to formulate in your communication efforts to make it easy for people to understand what your brand is all about, so that they understand which purpose they’re supporting when they choose to buy your products.

Another important point is to design your brand’s visual identity which should embrace and visually translate your brand’s personality and thus make it easy for people to recognize your brand (just like the swoosh!)

Tropicfeel, for example, has built a strong brand identity. They aim, through their products, to build a positive relationship with the environment by becoming a carbon neutral company.

They also encourage their customers to make responsible travel the common way. This helped them create their community of fellow travelers who share the same passion and are now ambassadors for the brand.

2. Understand your target audience:

Understanding your target audience is another important step for building a strong community around your brand. During this phase, you’ll need to make a deep analysis of your data to better understand who your customers are and what they are interested in.

This will help you to tailor the right messages and to better align what matters for you and what matters for your customers.

Take a look at the existing data on your website and social media and analyse their demographics (age, income, country, stage of life…). Try to bring out trends and averages, this will help you get a first insight on how your typical customer looks like. 

You can also contact some of your most loyal customers and schedule an interview with them. This will allow you to take a deeper look into your customers’ minds and will help you get more details about their behaviours and interests. You also have the opportunity to run surveys via email or on your website. Think about adding a promo-code or a coupon as an incentive for your customers who fill the survey.

To illustrate, Beardbrand found out, after analysing the results of a survey they launched, that a big part of their community members consider travelling as one of their biggest passion. To serve them better, Beardbrand decided to launch small and travel-friendly products specifically made to  optimize the experience of their customers while they are travelling (that’s what we call serving customers!!!)

3. Be a knowledge source about your industry:

Now that you have established your brand identity and that you perfectly understand your customers and their interest, the most important is to create content that brings an added value to them. 

Customers nowadays want to see unique, original and exclusive content, and since you already know their interests; make sure to create content that educates them, solves their pain points, and helps them in their daily life. This will show them that you care and thus will help you attract more members to your community and drive more engagement towards your brand.

Ensure that your content is aligned with your brand’s identity and it serves your customers.

This will help you become a knowledgeable source about your industry and will clearly differentiate you from your competitors.

4. Use storytelling and User Generated Content:

User generated content and storytelling are two great ways to attract more people and generate more engagement from your community.

User Generated Content is defined as any type of content that has been created and put out there by customers. It can refer to pictures, videos, testimonials, reviews, tweets, and blog posts. It is the act of users promoting a brand rather than the brand itself.

Sharing user-generated content on your website and on social media shows that you value your customers and their experience with your brand. It is also a great tool to build trust and reinforce the relationship between you and your customers. (and I mean come on, you don’t have to put any effort into it, customers do everything for you)

The easiest way to implement user-generated content is by creating a proper #hashtag for your brand on social media and encouraging your customers to use it while sharing their pictures, videos, and testimonials. This will allow you to have access to a large amount of real life stories, that you can use to storytell around the impact of your brand.

Storytelling about the origin of your brand and its continuous development helps you illustrate your beliefs and your cause and thus makes it easier for people to relate and create an emotional bond.

You can also reach out to influencers who are in your niche and who care about the same cause as you. These influencers have already a well established community that could also be interested to join yours. Actually, their influence is so considerable that 30% of consumers are more likely to buy a product recommended by an influencer as they relate more to them and value their opinions.

Daniel Wellington, for example, is one the brands that invested early in influencers marketing and user-generated content. Their content focuses on storytelling and sharing their customers adventures.

Their strategy proved to be so successful that the brand has almost 5 million followers on instagram and more than 2.200.000 posts overall with the hashtag #DanielWellington. 

Using these strategies will help you to grow your community by leveraging the power of social media and word of mouth.

5. Collaborate with like minded companies:

Working with companies that share the same vision and culture as yours is a great way to grow your community. It gives you the opportunity to leverage each company’s community and will help you reach a bigger audience. At the same time, it is a big statement about your engagement towards your cause and the people that support it.

The perfect example to illustrate this is the collaboration of Red Bull and GoPro. Both companies teamed up to produce incredible video content captured by GoPro’s technology during Red Bull’s events. According to Nick Woodman, the CEO of GoPro, this collaboration allowed them to upgrade their storytelling to a whole new level and helped them reach a broader global audience.

Collaborating on marketing campaigns with partners that share the same values and purpose is definitely a great way to create engaging content and leverage both communities to reach an even bigger audience (don’t worry the cake is big enough for everyone).

6. Conclusion:

To conclude, remember that building a community around your e-commerce brand doesn’t happen overnight. It is a task that takes time and effort, so make sure to constantly listen, communicate and remind your audience (and yourself) about your shared purpose. 

The key factor of success is to stay true to your values and to keep serving customers, this will undoubtedly pay its dividends.

And since I'm advising to build a community, who would I be if I was not applying my advice (the youtube ads guy maybe), feel free to join our community on facebook.

Congratulations, after months of planning, stress, and hard work, you’ve finally made it. You reached your crowdfunding goal. 

This means that you’ve got the market validation, the customers, and the funds (really soon). Three essential factors for any successful brand. Now that your campaign is coming to an end and you’ve got all these elements by your side, what’s next?

One of the logical routes to follow is to keep moving forward with your project and create your own e-commerce brand.
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Cards Against Humanity, Tropicfeel, Nomatic, many successful crowdfunding campaigns have grown into wildly flourishing e-commerce businesses, and today it might be your turn. Because of that, we want to make sure you’re prepared for it ahead of time.

Here is a guide to help you transition from crowdfunding to e-commerce:

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1. As soon as the campaign is funded:

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• Communication:

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Between the moment your campaign is funded and before it ends, make sure to update your backers about the advancement. Give them details about manufacturing, shipping, and stretch goals. This will build trust between you and your backers, who as long as they have a clear understanding of how things are developing, will remain supportive and flexible. It will also help to set clear expectations.
Don’t forget to communicate with your community about your future plans of expanding into e-commerce. 
Communicating clearly and consistently with your backers will give them a sneak peek of what it’s like to be your customer and how good they, their friends and family will be treated.

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• Anticipate demand:

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Exceeding your campaign funding goal often means that you have enough funds to get going until you start selling. These funds should help you invest in your e-commerce business and cover your manufacturing costs.
So make sure to take this opportunity and to anticipate the demand and integrate e-commerce quantities in your manufacturing plans.
This will allow you to have enough quantity to fulfill all your backers’ rewards and keep a certain amount of your products to kickstart (yeah, if crowdfunding is a kick-starter, e-commerce should be called a grow-bigger) your e-commerce operations.

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• Focus on marketing:

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One common mistake that creators do is forgetting marketing and promotion once their campaign is funded. So make sure to continue your marketing efforts to attract more and more backers and to raise more funds and at the same time start to prepare your branding and tailor your messages for your e-commerce. This is also a great opportunity to grow your email list and have great exposure
A good thing you can do is to design flyers, stickers and promo material to redirect and attract people to your e-commerce and insert them in your backers' parcels. By the time they will receive their rewards, your website will be fully operational and this will help to anchor your brand into your backers’ minds and redirect them to your e-commerce for other purchases.

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During this phase, don’t over-promote your e-commerce (I mean, you don’t have the e-commerce yet anyway) and focus your marketing efforts on your crowdfunding because your campaign is still running and the more you raise, the better it is for the future anyway.

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2. As soon as the campaign is over and manufacturing starts:

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• Choose your e-commerce platform and launch your website:

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You can opt to hire a developer and design your website from scratch or choose a CMS to create your e-commerce. I personally recommend the second option. It's cost-effective, it helps you gain time (1 or 2 days to fully set up your store), and it offers all the features needed to run a high performing e-store.
There are many CMS out there and the most known are Magento, Shopify or WooCommerce.
Since this is a highly important choice, I advise you to check out all the options available before making your choice. There are many factors to take into consideration such as features, SEO, customization, or scalability. So make sure to choose a platform that checks all the important boxes.
Launching your website as soon as your campaign is over will help you keep the momentum and take pre-orders. It is also the perfect opportunity to redirect potential backers (and future customers) who might have missed your crowdfunding to your website. This is the perfect way to take advantage of the traffic generated from Kickstarter to your website and gain early exposure.

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To know more, check out the article: The 9 best CMS to start your online business‍

• ‍Choose a logistics provider:

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Your campaign won’t be successful unless you deliver the rewards to your backers' doorsteps, and for that, you’ll need to choose a logistics provider that can fulfill your rewards worldwide for a pretty attractive cost and this represents the prelude to your e-commerce fulfillment.
So make sure to choose a provider that is able to handle both your crowdfunding and your e-commerce orders. Having the same provider for both of them will help you in negotiating a better deal (price-wise) and create a strong relationship over the long-run.
Choosing the right provider will also give you access to resources and knowledge you might not have had access to by yourself. Due to his expertise, you’ll be able to offer much more shipping solutions to your customers and you’ll have fewer things to worry about and thus you will be able to focus on other core areas of your business such as marketing and product development.
There are many factors that you need to take into consideration before choosing your logistics provider like scalability (highly important for all your future partnerships), worldwide shipping, ability to integrate with your current CMS, and the area of expertise. For example, some providers are specialized in shipping big size furniture while you’re selling board games, this is clearly not a great match (so, swipe left).

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To know more check out the article: How to choose the perfect logistics provider for your e-commerce

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3. As soon as the manufacturing is over and delivery starts:

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• Deliver rewards to your backers:

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Even if it might seem obvious, I wanted to stress on this phase because exceeding your crowdfunding goal doesn’t mean it’s the end of the adventure, there’s still a big step before the (crowdfunding) finish line: delivering the rewards to your backers (as promised). 
Successfully delivering rewards to ALL your backers is crucial for the development of your project since you need to meet the heavy expectations you have on your shoulders. Once you’ve done this, it also means that your crowdfunding is over and that you can now fully focus on your e-commerce operations.
Failing during this stage would lead to another bigger failure in the e-commerce world. To illustrate, let’s take a look at the Coolest Cooler campaign, which raised 13 million dollars in 2014 on Kickstarter, due to some logistics and planning problems the company failed to deliver the rewards to the backers. After 2 years, they decided to start selling on Amazon, no need to tell you that the brand received so many negative feedbacks and reviews that they almost didn’t sell anything after all. 5 years later, Coolest Cooler still didn’t deliver their backers and is now known as one of the biggest failures in the crowdfunding world.
So rather than taking this part as a pain, see it as an opportunity to attract and retain your backers. Think of rewards’ delivery as if it was for e-commerce and make sure to provide personalization to your backers. You can, for example, include special items (gifts, miniatures…) to their rewards or provide customized packages, you can use Packhelp for instance, a customization service that helps you create branded boxes. Don’t forget to join the flyers and free stickers that redirect your backers to your website and try to include coupons and vouchers to encourage them to buy from your e-commerce.

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To know more, check our article on how to provide free shipping during your crowdfunding campaign.

• Organize your data:

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Now that your crowdfunding fulfillment is successfully done and your campaign is officially over. You can focus all your efforts on your e-commerce. At this point, you should already have a big amount of data so make sure to organize it.

Try to segment your database and extract which are the main characteristics of your target persona. Separate backers from e-commerce customers. Segment them by age, interests, platforms they used to reach out to you, which channels do they use the most or prefer to get contacted through.

Since backers were there with you from the beginning of the adventure, they’re your biggest support and they can play a big part in helping you attract more and more customers. 

Backers feel a strong sense of belonging to the crowdfunding community, so you can be sure they will be there to help you. Don’t hesitate to ask them for feedback about your product, your marketing, or your project as a whole. You can also ask them for reviews (and if all the steps above went well, you’ll be flooded with 5 stars reviews).

Make sure that your marketing efforts are interactive, try to focus on 1 or 2 communication channels and make sure to redirect all these customers to your website. Create content and focus on SEO to gain more domain authority and thus rank higher on search engines.

Finally, succeeding during your crowdfunding campaign gives you all the necessary tools to succeed in your e-commerce journey. You have the funds, the customers, the market validation and a product that people want and this makes it the perfect recipe for success, the only thing that remains to be done is to go for it ;)

You’ve been a board game fan for years, you’ve played 7 Wonders or Pandemic. Slowly you started to develop game ideas, then you decided to make your own board game as a hobby. It’s going pretty well; your family loves it, your friends like it, your fellow gamers at your board-game cafe enjoy it, and the board-game community endorses it.

After facing positive feedback from your circles, you decide to unveil your amazing boardgame to the world, commercialize it, and why not make a living from your passion. 

And here’s when challenges start! 

Launching your own game is a journey full of challenges, you’ll need to find a manufacturer, a warehouse, and then send your product to customers and retailers.

All of this implies dealing with customs clearance, which is a scary and overwhelming step for every newcomer in the industry. Let’s face the facts, no one likes to deal with customs and all the administrative tasks it implies, but if you want to succeed in your game quest, you still need to go through it.

In today’s article, we prepared for you all the necessary information for a painless custom clearance and importation process to avoid getting your board game stuck in European customs.

First, let’s start by defining what is a toy and what isn’t a toy because this is what will determine the documents needed for customs clearance.

1. Toys:

According to the European Commission, a toy can be any product designed, whether or not exclusively, for the use in play by children under 14 years of age.

To avoid any confusion, we’ll go deeper into the definition. 

In Europe, games are categorized depending on the target audience’s age. So games that are meant to be played by children under 14 years of age are considered toys and consequently are subject to the requirement of The Toy Safety Directive.

The Toy Safety Directive is a directive that lays down the safety criteria that toys must meet before they can be marketed in the EU. Toys must also comply with any other EU legislation applicable to them. The essential safety requirements cove

- General risks: the health and safety of children, as well as other people such as parents or caregivers
- Particular risks: physical and mechanical, flammability, chemical, electrical, hygiene and radioactivity risks

However, if your game is destined for +14 years old players, then your product isn’t considered as a toy and thus isn’t subject to the same requirements.

In case your game is targeting a large audience of children and teenagers between 12 and 16 years old, you’ll still need to comply with the requirements of the Toy Safety Directive even if your game isn’t exclusively designed for children under 14 years old. 

To put it simply, if your target audience includes players younger than 14 years old, you’ll have to comply with all the special requirements of the Toy Safety Directive (TSD). 

2. The importance of respecting the TSD:

Respecting the Toy Safety Directive is highly important if you want to successfully sell your game in Europe and has many advantages:

• It ensures that your product won’t accidentally harm children.
• It helps to avoid fines and product recalls.
• It can reveal product-related problems before going to market, therefore, it helps in saving money.
• It helps in increasing customers’ trust in your brand and your products.
• It shows that you are committed to safety and that you care about your customers (and you’re not an as***le btw).
  

Taking a look at these advantages will help you understand that TSD shouldn’t be seen as a pain anymore but as an opportunity to prove that your game is on point with the safety standards and that it won’t harm any child’s life.

3. Marking:

Now that you understand what differentiates a toy and a game and you grasp the importance of complying with the TSD. Let’s get into the heart of our subject and explore the marking process that you need to go through so that your games won’t be stuck at customs because of your new (warm and welcoming) friend (the customs officer).

Here are the mandatory requirements for marking:

• Age restrictions: minimum or maximum age of the user
• Warnings must also be included in the product. It has to be preceded by the words “Warning” or “Warnings”.
• Identification number: Toys made available in the EU market must have a type, batch, serial or model number or other element allowing for the identification of the toy.
• Contact details: it shall indicate the name, registered trade name or trademark of the manufacturer and the address at which they can be contacted on the toy.
  If the toy is marketed under another person’s name or trademark, that person will be considered as the manufacturer.
  

Note that these requirements apply for any game even if its target audience is above 14.

Forget one of these 4 requirements and your products will be stuck at customs for a while. It will lead to a more in-depth inspection of your cargo (which will probably take some time). Whereas a well-done marking will facilitate the identification of your products and will lead to a quick and smooth clearance process.

You can also add non-mandatory marking to your products such as the maximum weight of the user or if the toy must be used under an adult’s supervision.

4. CE Marking:

The CE mark is a mandatory legal mark applied to all toys (remember, toys are designed for kids under 14 years of age) sold within the EU, It is often described as the product’s trade passport mark. CE Mark proves that your product conforms to the minimum standards needed to be sold within the EU.

If your product’s target audience is older than 14 and your product holds a “+14 mark”, you don’t need the CE Mark to be sold within the EU.

The CE mark has to be visible and readable on the packaging and should be placed next to other warnings or instructions of use.

In order to apply the CE mark, your product needs to go through the EN71 tests.

IMPORTANT : CE mark has to come with a Declaration of conformity and EN71 test reports.

5. EN71 Standards:

EN71 is a set of safety standards that applies to all toys sold in the EU and this test also covers the requirements to sell on American soil (if uncle Donald doesn’t decide to change them). It ensures that all the toys sold in the EU meet minimum safety standards. The EN71 is made up of 13 parts, but the first 3 parts are mostly used:

• EN71-1: Mechanical and physical properties
  This part is about checking to see if any physical or mechanical feature of the toy can injure a child. It helps in determining if there are share points on the toy or if there are parts that can easily be swallowed.
  

• EN71-2: Flammability
  This part tests the number of different factors that could lead to an injury to a child because of flammability. It helps in determining the presence of flammable materials in the toy, how long the item burns and how quickly the fire spread across it.
  
  
• EN71-3: Specification for migration of certain elements
  This part restricts the amount of lead released AND identifies eighteen additional other toxic elements that can be even more harmful than lead.
  

The tests can be done in two ways: either send your product to a lab and let them do it for you (usually starting from $500) or do the certification by yourself. I advise you to go for the first option. Self-certification is quite complicated and the regulations you need to follow are hard to find.

Once you’ve successfully completed the tests, you’ll get the EN71 report which you need to present to the customs officers (your warm and welcoming friends).

6. EC Declaration of conformity:

It is a written statement drawn up by the manufacturer to demonstrate the fulfillment of the EU requirements related to the product he manufactured and who’s bearing the CE marking.

You can find a template of EC declaration of conformity.

7. Summary

Here’s a picture to help you summarize everything:

Once you’ve gone through all of these elements and made sure that your product has all the above-mentioned requirements and markings, your board game is ready to be sold in the EU and you can be sure your cargo won’t be stuck at the customs (at least not for these reasons).

Congratulations! You’ve become an expert in board games customs clearance!