02/15/2022
Expand Globally with Seamless DDP Logistics
Provide total cost transparency and fast global deliveries with GEODIS Delivery Duty Paid. Unlock your international eCommerce success.
Key takeaways
- Delivery Duty Paid (DDP) provides your customers with transparent total landed costs upfront, building trust and reducing cart abandonment for international eCommerce sales
- DDP reduces customs clearance times and eliminates surprise fees for customers, resulting in faster deliveries and fewer refused parcels compared to Delivery Duty Unpaid (DDU)
- Successful DDP implementation requires clear international shipping policies, a strong carrier partner, integrated shopping cart calculations, and end-to-end parcel tracking
- GEODIS simplifies international DDP shipping by using our global expertise, eCommerce experience, customs clearance knowledge, and integrated technology platform
Boost international sales with Delivery Duty Paid (DDP)
Cart abandonment is an issue for every eCommerce retailer. Around seven in ten customers abandon their online shopping cart before completing a transaction. Cart abandonment is especially pronounced in certain eCommerce niches, including luxury, fashion, childcare, and DIY.
Some of the main reasons for cart abandonment are related to additional hidden fees, including shipping, taxes, and other costs. This is particularly true when selling across international borders, where customers will often have to pay additional duties and other taxes. Depending on your eCommerce brand's shipping method, the "total landed cost" (the total cost of the purchased item, including associated taxes and duties) may not appear in the checkout process.
These international customers will be surprised by the total cost of their purchased items. When they discover the total landed cost, it's possible they will abandon the cart. In some cases, duties and taxes may not even be paid during the checkout process, meaning that the customer pays additional fees when their products are delivered—causing a refusal of delivery and additional return costs.
U.S. eCommerce brands selling internationally must solve the issue of cart abandonment and refused deliveries. Otherwise, you risk high return fees and negative brand impacts. One of the best ways to deal with unexpected fees and cart abandonment is by using a Delivery Duty Paid (DDP) parcel shipment method.
DDP provides much more transparent total landed costs, which helps build customer trust and reduce cart abandonment. If you want to boost international eCommerce growth, DDP could be the solution you need.
As an experienced logistics manager, you know the importance of efficient, transparent international shipping. Let GEODIS handle the intricacies of DDP so you can focus on expanding your global sales.
Understanding Delivery Duty Paid: The key to transparent international shipping
U.S. eCommerce brands and their customers will need to pay varying taxes and duties for the import and export of goods. These fees are based on:
- Where you're shipping internationally
- The value of the shipment
- The items you're shipping
- The tariff rates and associated duties for those products
Depending on your shipment method, taxes and duties might be paid by you or your international customer. The two most common shipping types for international eCommerce parcel shipping are Delivery Duty Unpaid (DDU) and Delivery Duty Paid (DDP).
Delivery Duty Unpaid is when your U.S. eCommerce brand does not pay duties or taxes when sending goods overseas. Instead, the international customer must pay those fees to receive their shipment. DDU puts the responsibility for paying taxes and duties onto the customer, which can be frustrating and upsetting for them. DDU doesn't allow you to show the total landed cost as part of the checkout process, leading to higher cart abandonment rates.
In contrast, Delivery Duty Paid requires your eCommerce business to pay all relevant taxes and duties when sending the product. You can calculate and show the total landed cost as part of the checkout process, giving your customers complete, upfront information on how much they will need to pay. You can recoup your tax and duty fees as part of the final cost to the customer.
While DDU can cost you less than DDP during check-out, DDU lacks transparency and directly impacts the customer experience and cart abandonment. DDP helps you avoid messy returns and unhappy customers.
Breaking down DDU vs. DDP
Delivery Duty Unpaid:
- Does not allow you to display the total landed cost during the checkout process
- Requires the customer to pay duties and taxes when they receive the products
- Can lead to customer frustration and inconvenience
- Incurs additional fees through refused deliveries and reverse logistics
Delivery Duty Paid:
- Allows you to display the total landed cost to customers when checking out
- Means you can collect those duties and taxes as part of the checkout process
- Lessens customer inconvenience because there are no surprise fees
- Reduces the likelihood of deliveries being refused or products being returned
- Creates a more positive customer experience
Over the long term, DDP helps you build customer trust, streamline shipping, reduce returns, and get repeat buyers.
Slash cart abandonment with DDP's upfront pricing and speedy delivery
Delivery Duty Paid is central to lowering international cart abandonment rates. That all goes back to calculating the total landed cost within the eCommerce buying experience.
Customers want transparency when making their decisions. They expect to see everything upfront and know exactly how much their order costs. With DDP, there are no surprise fees for the customer. The eCommerce merchant displays the total landed cost upfront in the shopping cart, increasing the likelihood of a purchase. DDP also reduces the time parcels remain in customs, reducing total shipping time. Lastly, the customer is not expected to pay any hidden fees, reducing the friction of an unhappy customer returning their parcel.
With DDP, carrier partners provide a more transparent view of the shipping process to both the merchant and the customer. According to PayPal Cross-Border Consumer Research, 24% of consumers avoid purchasing from other countries due to slow delivery times. When the U.S. brand handles all duties and taxes, items get through customs faster, resulting in speedy customer deliveries.
According to Coresight Research, "Free shipping is the factor most likely to prompt shoppers to complete their purchase, a promotion code was the second highest factor, and transparent pricing was third." DDP creates a frictionless customer experience by eliminating surprise fees and returns. This helps maximize customer satisfaction and increases operational efficiency.
Navigating the complexities of international duties and taxes doesn't have to derail your global ecommerce growth. Work with GEODIS to seamlessly integrate DDP and boost customer satisfaction.
Four essential strategies for DDP success
Here are four approaches to help you make the most of DDP and grow your international eCommerce business.
Share transparent, clear policies on international shipping and pricing
Let your international customers know what to expect from cross-border shopping and shipping. Point them to your guidelines on:
- How you calculate and handle taxes and duties
- Your shipping policy and speed
- What to expect in the shopping cart
- FAQs on cars, checkouts, payments, and confirmations
Find a strong carrier partner
It's important to find a strong U.S. carrier partner who can scale as your eCommerce business grows. Look for carriers who will integrate seamlessly with your systems and who provide strategic, transparent, and data-driven DDP services.
Integrate the eCommerce shopping cart
Brands need to integrate total landed costs and parcel tracking into online shopping carts. Look for carriers with deep integration capabilities who can provide real-time calculations based on international fees.
Provide end-to-end parcel tracking
Brands should work with carriers who provide full tracking of parcels shipped via DDP. Brands and customers can use that tracking to monitor shipping and ensure on-time deliveries.
Simplify international DDP shipping with GEODIS
GEODIS makes it easy for eCommerce brands to go global. Our small parcel shipping service currently ships to 27 European countries, Great Britain, and Canada, with guaranteed delivery in four to six days. We do this by using our global parcel expertise, eCommerce experience, deep understanding of customs clearance processes, and integrated technology.
We'll help you strike a balance between speed of delivery, and total landed cost. We offer an end-to-end global transportation network and a fully integrated digital platform to make DDP a breeze for you and your customers.
FAQs about Delivery Duty Paid
DDP provides upfront total landed costs, including duties and taxes, during checkout. This transparency eliminates surprise fees, building customer trust and reducing cart abandonment.
With DDU, the customer is responsible for paying duties and taxes upon delivery, which can lead to refusal and returns. DDP shifts this responsibility to the seller, streamlining the customer experience.
GEODIS offers end-to-end DDP solutions, including global transportation, customs clearance, and integrated technology. This simplifies cross-border logistics, enabling you to scale globally with ease.
While DDP may have higher upfront costs compared to DDU, it can ultimately save money by reducing cart abandonment, returns, and customer service issues. GEODIS can help optimize your DDP strategy for cost-effectiveness.
How GEODIS can help
As an experienced eCommerce manager, you understand the importance of a reliable, efficient, and transparent international shipping partner. GEODIS simplifies your global eCommerce growth with our comprehensive DDP solutions:
- Seamlessly integrate our advanced technology with your systems for real-time total landed cost calculations and end-to-end parcel tracking
- Use our extensive global transportation network and strategically located hubs to reach customers in a quick and cost-effective way
- Benefit from our deep customs clearance expertise and strong carrier partnerships to speed up cross-border deliveries
- Optimize your international shipping costs and processes with our data-driven insights
- Focus on expanding your business while we handle the complexities of duties, taxes, and regulatory compliance
- Scale your operations with ease using our flexible, customizable DDP services tailored to your unique needs
- Trust in our proven track record of success, with millions of international DDP shipments processed every year
Accelerate your global ecommerce growth and enhance your customers' cross-border experience with GEODIS. Contact us today to discover how our DDP expertise can help you expand into new markets with confidence.