Often, shippers ask us to define the difference between Delivery Duty Unpaid (DDU) and Delivery Duty Paid (DDP).
When shipping a package DDU, the seller is responsible for the safe delivery of goods, paying all transportation expenses, and assuming all risks during transportation. Once the goods arrive at the delivery point, the buyer becomes responsible for paying import duties as well as further transport costs.

customs money packages calculate dutiesWith DDP, the seller accepts all the responsibility, risk, and costs associated with transporting goods until they are received by the buyer. The seller pays for shipping costs, export and import duties, insurance, and any other expenses incurred during shipping to an agreed-upon location in the buyer’s country.

When you sell globally, there is no avoiding value-added taxes (VAT). Depending on the market and destination, both DDP or DDU will work, and in some cases a combination will be best. Whether you ship DDU or DDP will be based on the de minimis value set by each market you are shipping to. For example, in both Australia and Russia, duties and taxes don’t kick in until the package value reaches $1,000 USD. But in Brazil, the de minimis value is just $50 USD for DDU entry, and in the EU it’s as low as $25 USD.

The most crucial step to satisfying your international customer is to eliminate any surprises. Regardless of destination, shoppers want to have a complete understanding of the impact of DDU or DDP on their order in the product selection process. The responsibility and charges of duties and taxes should be clearly stated before they are asked to click “pay” at checkout.

It is vital to set the right expectations for the consumer and let her decide if she prefers a landed costs model such as DDP, or pay the potential duties and taxes at arrival with DDU.

That said, your best bet is to work with a shipping partner who understands the duties, tariffs, taxes, and de minimis values of each market you ship to.

With a huge consumer market eager to purchase international goods and services, Brazil is drawing the attention of savvy brands all over the world. About three-quarters of Brazil’s 140 million internet users have purchased on international websites at least once.

As the largest economy in Latin America, Brazil represents about 42 % of all B2C e-commerce in Latin America, and e-commerce sales there have increased 38 % from 2014 through 2017. With 130 million active Facebook users, Brazil is ranked number three worldwide. There’s good reason that e-commerce giants including Alibaba, Amazon, Walmart, and Wish are investing significantly in this market. Merchants in Brazil need to charge their customers more because of high taxation costs imposed on them. It’s cheaper for Brazilian consumers to buy from international websites than to buy domestically-sold goods.

Brazil shopping bagCross-border e-commerce merchants selling to Brazilians collectively experienced the highest sales volume in November 2017. Brazilian consumers made 33 % of their annual cross-border online purchases during September, October and November. In fact, Singles Day e-commerce sales were 177 % larger than Black Friday in 2017 in terms of sales volume generated by e-commerce merchants selling to Brazilians. Global e-commerce sales in November are heavily fueled by Brazilian employees receiving a thirteenth salary. This additional income is required by law and is usually received in two installments at the start of November and in December.

While Brazil could be a cash cow for global e-commerce sellers, it also comes with red tape. Localizing in Brazil means lots of planning, calculation and understanding the whole environment before you come in. Delivery service companies face challenges in the Brazilian market, says the International Trade Administration. This is due to numerous barriers, including high import taxes, an automated express delivery clearance system that is only partially functional, and a lack of a de minimis exemption from tariffs for express delivery shipments. Brazil’s 50 USD de minimis exemption applies only to postal service shipments to individuals. There is an exemption for gifts sent via postal delivery, which merchants try to circumvent by making an order appear to be a gift. But those shipments can be stopped in customs when they see a commercial invoice.

But on the bright side, Brazilian e-commerce customers have been taught to wait for products from China for 30–60 days or more and have not been caught up in fads such as same-day delivery. Also, Brazilian consumers use national payment methods for about 90 % of their online purchases. Brazil’s online payments market is restricted by law, dominated by a few local banks, and has its own standards. Therefore, before going all-in on Brazil, it is suggested that you work with an in-country online payment processor, or a payment processor that works with these few Brazilian banks.

Sources: Ebit, EBANX, PagBrasil, Multichannel Merchant, International Trade Administration, Euromonitor International.

For the tenth consecutive year, PostNord has published a study of the Nordic e-commerce market. The report E-commerce in the Nordics 2018 is based on surveys with consumers aged 18–79 years, carried out monthly in Denmark, Finland, Norway, and Sweden. The total number of respondents was 92 656.

map & statistics E-commerce in the Nordics 2018

(click for larger image)

The report contains detailed information on both the Nordic market as a whole, worth EUR 22 billion, as well as the four countries individually. Here are some important findings from the new 2018 study:

Mapping the entire customer journey increasingly important

As Nordic consumers adopt an increasingly digital life style including most aspects of life, it is becoming more and more important for e-commerce players to follow and map the entire customer journey in order to keep track of how consumers behavior, expectations and preferences are changing over time.

Five countries dominate when Nordic consumers shop from abroad

China and the United Kingdom are the most popular markets to buy from, followed by Germany, the US and Sweden. Top three categories being bought from foreign markets are the same in last year’s report – Fashion & Shoes, Home Electronics and Media products.

Shopping by phone is growing steadily

E-commerce is rapidly becoming more and more mobile with Sweden taking the lead in the region. More than four out of ten Swedish consumers state that they have made purchases online with a smartphone, compared with just over one third in the Nordic region overall.

Learn more about Nordic online consumers by ordering a free copy of the 2018 report.

Global ecommerce is no longer the future – it’s already here. Even without trying, most U.S.-based ecommerce sellers will notice that about 10% of their orders are being shipped outside the country.
So as an ecommerce seller, where should you focus your international selling efforts? Global ecommerce is not a one-size-fits-all proposition, and it’s not as simple as targeting BRIC countries (Brazil, Russia, India, and China).

Here’s a look at four steps you should consider before you go all-in with global ecommerce.

Go where your customers are

global e-commerce world mapThe BRIC countries may be the global ecommerce hot spots. But if your customers are not coming in from those countries, don’t make them your primary focus. Look at your international order history first. The countries with the most orders are your low-hanging fruit. Then check out your analytics for visitors outside your country who are certainly browsing, but not completing orders. If visitors from a specific country are abandoning at the same part of your site, you can target those customers once you make the necessary fixes.

Determine shipping and delivery factors

Those above-mentioned roadblocks could be due to shipping costs, or it may be because of regulations in those specific countries. For that matter, not being set up for international delivery may mean you’re losing money whenever a customer from a specific country buys from you. Your rates are affected by several variables, including duties and taxes, package dimensions, specific country commodity restrictions, and handling charges and terms and conditions put in place by the carriers.

Tap the easiest markets first

Making sure your ecommerce site can be clearly understood in other countries is a must. We could recommend starting your global expansion by targeting countries where English is native or common (go for the easy first).
If your customers are in countries where customers prefer their native language, then a localized website is necessary. However, a localized website means you need localized customer service, and agents who speak that language.

Make payments easy

Another important thing marketers need to keep in mind is the shopping habits of the country they are looking to sell to. How do customers like to pay for online goods? Credit cards are the most popular form of payment in most countries. But many customers in for example Russia and Eastern Europe prefer to pay by cash-on-delivery, while customers in Japan prefer to buy online and then pay for their goods at a convenience store kiosk or cash register. Also, digital payment methods such as PayPal, Google Pay, Apple Pay, and Amazon Pay can attract global mobile customers.

To summarize, global e-commerce is already a fact for most e-tailers. But to grow profitably takes some effort, which is why it’s always good to start with the low-hanging fruit.

PostNord recently published the study “Behind the Mind 2”, which looked at how our subconscious responds to administrative communication, such as invoices. The communication items examined were both in physical and digital form, and the focus of the study was how design can affect the perception of such communication and how people want to receive such information. The study was conducted in Sweden using eyetracking and brain scanning, as well as traditional interviews. The results showed that people are sensitive in terms of how we take in administrative communication and that digital communication has the best impact if it is digitalized – according to the recipient’s terms.

Behind the Mind 2, PostNord study“We have been aware of the benefits of the physical channel for some time, such as greater focus and longer viewing values. We are also aware of the relatively high cognitive stress of digital channels, which makes it difficult for the recipient to absorb large amounts of information. However, what is interesting in this study is that we see a competitive alternative with the digital mailbox, which in a number of aspects is as effective as printed administrative communication,” says Nordic Insight Manager at PostNord’s Communication Services business area, Karin Nilsson.

The study’s results can be summarized in three main points:

Use print to gain attention

Print is the channel that provides the most consistent positive emotional response regarding administrative communication. It is effective if the recipient needs to get an overview of the information, taking in the text and the message. Print’s visual attention leads to the information being read, both overall and regarding specific details in the message regardless of age group and gender.

Relationships rather than just transactions

When communication contains relation-enhancing messages, and not just transaction details, the emotional response increases. Unique and individual communication helps the recipient to find the transaction-related information, i.e. the recipient does not need to read for as long. Special print also wins in terms of personalizing the message, which allows the recipient to more easily take in the transaction-related information.

Adapting to digital

Each digital channel has its particular impact. The digital mailbox is especially promising for administrative communication. The cell phone is a channel that requires the content to be extremely adapted to the platform, focusing on speed, choice and relevance.

“The result is interesting for companies and organizations that wish to use their administrative communication to carry out more than just a transaction. By adapting the content to also include elements that form the basis for establishing a relationship between recipient and sender, we can improve the receptiveness of the recipient,” says CEO of the communications agency House of Friends, Magnus Widgren, who developed the test material.

“Behind the Mind 2” was carried out by PostNord in collaboration with Ipsos, Neurons Inc. and House of Friends. For more information, see the short clip on Youtube.