A payments option opens CompactAppliance.com to Canadian consumers
Looking for room to grow in its niche market of providing refrigerators and other appliances designed for consumers tight on space, CompactAppliance.com has overcome obstacles of selling into Canada through a Canada Post Borderfree system that streamlines the payment process, the retailer says.
Selling across national borders always requires extra work in dealing with foreign currencies and cross-border duties, plus additional shipping charges. But customers don’t see the full cost of a shipment until it arrives at a cross-border facility, and they cannot receive home delivery until all fees are paid, requiring them to pick up their package at the cross-border facility. This presents the merchant with the risk that its foreign-based customer will refuse to accept the shipment and pay for it, says Jason Roussos, vice president of strategic development. “Before using Borderfree, we weren’t able to sell into Canada, because we didn’t have the ability to calculate and charge complete charges up front,” he says.
Since it began using Canada Post Borderfree three months ago, CompactAppliance has been channeling sales to Canadian consumers who can now see their final price, including all duties, taxes and shipping charges, plus an estimated home delivery time, as soon as they place an order, Roussos says. “The Canadian customer doesn’t have to pick up the package or pay extra fees,” he says.
He adds that Canadian sales now account for less than 5% of overall sales, but he expects that percentage to grow after CompactAppliance begins more aggressive marketing to Canadian consumers.
Canada Post Borderfree, a service that became available in January 2003, serves more than 20 U.S. online retailers, including Crate & Barrel, Ritz Interactive and eBags.com. Although merchants have the option to build direct integration between their web sites and Borderfree.com to provide for automated updates of cross-border fees applied to individual products, CompactAppliance chose to start with a more manual process. Until it directly integrates its site with Borderfree, it uploads product files each night to Borderfee.com so they can be refreshed with accurate figures to accommodate any changes in the retailer’s pricing or Canadian fees and currency exchange rates.
Canada Post Borderfree is a joint venture of Ottawa-based Canada Post Corp., Canada`s national postal service, and Borderfree, an Internet technology company based in Toronto. Borderfree uses foreign exchange management software from New York-based E4X Inc.
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