De minimus crackdowns, a change in tide for return policies, and a closer look at how search functions can make or break online sales
Greetings everyone,
Chinese importers and customs brokers are sweating as the crackdown related to de minimus continues. Will laws change to remold the nature of China-US e-commerce trade??
The Suez Canal remains in turmoil as hostility in the Red Sea remains, but the rising of water levels in Panama is a bright light for cargo shippers as the canal raises its draft limits and volumes begin to climb back to normal as the rainy season approaches.
In other news, customers are starting to take notice of changes in return policies. What is the right balance to strike between cutting return losses for your business, and giving customers return flexibility?
Plus, a dive into what’s driving the success of the online marketplace that’s beating out Amazon in shoppers, and how reexamining search functions could help you boost sales and retain customers better.?
What happened in e-commerce logistics in May 2024? Let’s review.
In logistics news…
Spotlight on de minimus creates a headache for Chinese e-commerce shippers and customs brokers.
The US Customs and Border Protection agency is taking a hard stance on Chinese low-value imports.?
Several customs brokers, including Seko Logistics, have been suspended due to their alleged failure to comply with the standards set under the expedited entry-type 86 program.
Entry type 86 allows the import of goods into the USA with no patent of taxes or duties, provided that the value of the shipment is under 800 USD - AKA the de minimus amount.?
At the end of this past month, a shipment was seized that allegedly belonged to Chinese fast-fashion mega-retailer Shein. The seized shipment has many Chinese e-commerce retailers delaying shipments and nervously contemplating the future of sales to US consumers.
The de minimis has been a contentious problem for a while now. Add that to problems importing fentanyl and drug-making tools, and it looks like customs clearance is about to get a lot trickier for Chinese companies importing to the US.?
Panama draft limits are raised ahead of schedule and before the start of the rainy season. Will the positive changes last throughout the year?
The draft has increased, and the amount of ships allowed through the canal daily has risen from 24 to 32. Draft restrictions have been in place in the busy canal for over a year now, limiting the amount of cargo that ships can carry by about 10-15%.
Authorities are optimistic that the drought has broken and that things will begin to return to normal in the region as water levels in the Gatun Lake, which feeds the lock, continue to rise.
Amazon makes changes to its return logistics. But it's part of a global trend…
According to the National Retail Federation, 1/7th of the 5 trillion worth of retail goods sold in the US in 2023 were returned.?
Amazon used to let you keep many items that you wanted to return. The company's return policies are now similar on paper, but returning items has become more challenging.
Instances of customers getting messages warning to return items they've already returned have gone up. The company has excellent customer service reps who can get these things ironed out, but at that point, the barrier to return has already been created.?
This could be a mistake, but it's something that customers are noticing more and more of late. Plus, Amazon has increased instances of directing a customer making a return to take their return parcel to a wholefoods store, UPS location, or other storefront that they have to physically travel to.?
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Why is this happening? This strategy is often referred to as friction. Amazon cannot take away its famous free returns or at least allow returns, but it can make them a little less convenient.?
Lax return policies facilitated the growth of e-commerce success…so how and why are return policies swinging the other way? If someone as big as Amazon is making changes, you know free and easy return policies must be unsustainable.?
Still, it’s a delicate balance between good customer service and unaffordable return policies.
In e-commerce news…
Is Facebook marketplace the online platform you should be paying attention to in 2024?
Astonishingly, Facebook marketplace has four times the customers as Amazon.?
Even if it may seem that Facebook is dying in popularity compared to some other social media platforms, the site continues to grow. At the end of 2023, the number of users worldwide was clocked at 3.07 billion active users, and 40% of those users shop on Facebook marketplace.
Although primarily a second-hand sale site, the platform has also become a place where small businesses can sell and market products with zero upfront investment. Particularly for companies looking to market products in a local area, selling on Facebook Marketplace could be a good move to get the word out about your product.
Poor search functions may be bringing your sales down?
A 2024 UK study shows that one-third of shoppers abandoned their purchase because of poor search functions.?
What does this mean? It’s linked to the way that most people, but particularly the younger generations, shop online. For instance, when someone sees a particular fashion trend on Instagram, and they try to search for a similar item on google.?
It is clear that shoppers want a better way to search for items and trends that they see online.
The solution? Use AI personalization to “bridge the gap between inspiration and purchase”.
Retailers can use AI-powered tools like search personalization, storing info on what they’ve looked at and purchased, and recommending personalized choices.
From CBIP
We’ve published the following blogs this last month. Give them a read if you have a couple of minutes.
Want daily updates from CBIP? Make sure to follow me via Twitter (@Nbartlett_CBIP) and CBIP (@CBIPLogistics) for thoughts and conversations on the industry every week.
Until next month,
Nick Bartlett
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