Amazon not only sold $2.5 billion worth of goods, it introduced Prime members to new services. How should rivals compete in 2017?
The toy e-retailer says the sales haven’t cost it a dime.
Toy e-retailer HobbyTron.com began accepting orders from customers outside the United States about two years ago, and now orders coming from Canada alone account for about 10% of the e-retailer’s sales, says HobbyTron.com vice president Ben Ibarra.
HobbyTron.com, No. 498 in Internet Retailer’s Top 500 Guide, launched international sales by working with Bongo International, an international payment and shipping vendor. International consumers who go to checkout on HobbyTron.com are connected to a HobbyTron.com-branded page operated by Bongo where they select their shipping options and complete their purchases. Bongo then conveys the order information to HobbyTron.com, which ships the order to Bongo’s U.S. shipping center. Bongo forwards the order to the consumer and files all the customs paperwork. Delivery to Canada usually takes about a week, Ibarra says.
HobbyTron.com pays nothing for the service, as Bongo makes its money on the shipping fees it charges shoppers. A Canadian consumer can expect to pay about US$21 to have a 2-lb. package delivered. Consumers get package tracking information as soon as an order leaves HobbyTron.com so they can track a package’s progress from HobbyTron.com to Bongo and on through delivery. Bongo usually ships using express services from FedEx and DHL, Bongo says. Bongo says Canada is the top delivery destination by volume for orders placed with U.S. e-retailers, with 26% of orders placed using its Bongo Checkout service heading north. Australia and the United Kingdom take the number two and three spots, respectively.
Ibarra says setting up its systems to work with Bongo was easy, as Bongo did most of the heavy lifting and provided the code HobbyTron.com had to add to its web site to transfer international customers to Bongo’s payment and shipping site, and to communicate order information and payments back to HobbyTron.com.
HobbyTron.com gave Bongo the product information for its 5,000 products up front and Bongo calculated the shipping rate for each product according to its size and weight, and so it could provide customs officials with the information required to bring the product into the country. To enter Canada, for example, entry paperwork needs to include information about where a product was manufactured. When HobbyTron.com adds new products to its site, Ibarra says he downloads the new information and sends it to Bongo. “They make it very easy to do,” he says.
Ibarra says it doesn’t actively conduct online marketing aimed at Canadians; it’s more that Canadian consumers find HobbyTron.com. Much of the site traffic from Canadians comes through HobbyTron.com’s efforts on social media like YouTube. HobbyTron.com posts about five videos a week to YouTube, which consumers pass along. “We do review videos, funny viral videos and they all promote the item within the video,” Ibarra says. “We get a lot of customers from all over from those.”
Roger Hardy, CEO of eyewear e-retailer Coastal Contacts will talk about international e-commerce at the Internet Retailer Conference & Exhibition 2012 in Chicago in June during a session titled “Border crossings: How to get orders to customers across borders.” The IRCE $200 early-bird discount expires March 31.