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Gearing up for Cross-Border Growth in 2024 

kromkrathog-stock.Adobe.com

The global ecommerce market is expected to be worth $9.3 trillion by 2027, indicating a wealth of opportunity for brands across the world to broaden and grow their customer base. Not only are U.S. customers willing to look further afield for the right products at the right price, but the global market is increasingly looking to U.S. brands to fulfill demand across retail verticals such as beauty and cosmetics, fashion, sportswear and apparel.  

De minimis strategies such as Section 321 also unlock growth opportunities for brands wanting to sell into the U.S., but find themselves overwhelmed and constrained by customs paperwork and fees. Section 321 offers a border-friendly path to fulfillment into the U.S. by acting as a threshold to enable businesses to have a faster, lower-cost way of exporting goods into the U.S. duty free and tax free by way of Canada or Mexico, all in full compliance with established regulations. This also allows brands and retailers to revisit their supply chain strategy to better navigate the rise or variability in import duties and reduce costs without a negative impact on the customer experience.  

Taking advantage of a global economy and the ability to effectively expand into international markets such as the U.S. is still not a simple task. It requires scaling up to be cost-effective, while ensuring customer experience remains front and center by localizing operations to fit the unique requirements of an international audience. 

Optimizing the Whole Customer Journey  

Gearing up for cross-border growth requires a seamless experience across the entire customer journey. On the front end, brands should be steering toward website localization while also ensuring pricing is presented in local currencies and alternative payment method options are available. It is also important that transparency and clarity are provided at the checkout around any duty or tax considerations that might be associated with the purchase, depending on where the package is going to and from.  

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On the backend, a distributed fulfillment operation should be a top priority for brands going global. The exact strategy, however, will be dependent on the stage of international expansion the brand is at and its goals for the future. For those just starting to expand into new markets, international demand can often be fulfilled via a single node of inventory. Yet as a brand starts to scale, it should look to engage a multi-node fulfillment operation leveraging international distribution centers (DCs) strategically placed across the globe.  

The purpose of a multi-node fulfillment network is to spread out inventory across multiple DCs as opposed to handling operations from one single facility. When combined with a robust distributed order management (DOM) solution, this concept not only enables brands to cover more ground in terms of audience; it also acts as a great contingency. Should an unexpected disruption occur at one location, orders can be routed to the alternative DC with no need for production to come to a stop.   

Embracing Flexible Solutions 

While the opportunities for cross-border growth are clear, investing in the infrastructure and necessary expansion of operations requires a strategic approach, particularly due to the turbulence the global economy continues to face. Temporary, cost-effective solutions such as pop-up DCs can be extremely effective due to their flexible nature. This solution – often used by brands to support peak demand – can be easily and rapidly implemented in different geographies to test new markets without committing to a more permanent and costly solution.  

Other flexible solutions include the transformation of existing physical store space to fulfill online orders. This can be achieved through the implementation of omnichannel order-picking technology that allows brands to adopt a hybrid store model to accommodate both physical and online retail.  

Keeping up with Local Duties and Tariffs  

Implementing an effective cross-border fulfillment strategy – whether that be through permanent or temporary infrastructures – must factor in any regional taxes and the associated red tape. Fortunately, the previously mentioned Section 321 could offer your brand the more cost-effective solution you require to take the leap. The high threshold with Section 321 means that most direct-to-consumer (DTC) shipments meet requirements for the exemption; however, certain criteria means that some retailers stand to benefit more than others.

With the right combination of an experienced third-party logistics provider (3PL) to ensure proper management of inventory and customs processing, brands can fulfill their orders without substantial upfront cost or drastic changes to their current operations.   

For those who can successfully navigate all of the requirements while scaling their operations, the year ahead holds endless opportunities for cross-border growth. And with the right 3PL partner, these elements needn’t be a barrier. Together, through a partnership built on trust, brands can truly go the distance and cross borders when it comes to global expansion – in 2024 and beyond. 


Stephen Beard is VP of Transportation at PFS, now part of GXO. A seasoned supply chain expert, Beard offers 30+ years working with the leaders in the transportation industry. In his role as VP of Transportation at PFS, he designs parcel and freight solutions that help brands and retailers employ the right balance of cost and quality service to support positive delivery experiences that encourage growth and customer loyalty.

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