Top 3 markets guide

How a targeted strategy in Canada, the UK and Australia
can help you go international with less effort.
Top 3 Markets Guide
CROSS-BORDER ECOMMERCE

2
©2020 Pitney Bowes Inc. All rights reserved. You may, however, share the content of this document, provided that you do not alter it and that you cite Pitney Bowes Inc. as the source.
Table of Contents
Introduction 3
7
13
18
Commonalities Across Countries
Ready, Set, Go!
Resources
Canada
The UK
Australia
22
24
25

3
Introduction
The average cross-border
order value is 10% higher
than domestic AOV.
Cross-border trade offers US etailers access
to entirely new customer bases. It’s an
appealing proposition for ecommerce
retailers that have already experienced
success in the US market and now want
to leverage existing web and
distribution infrastructures.
With comparatively easy currency
conversions, and few language barriers to
overcome, Canada, the UK and Australia are
often the three best choices for US
ecommerce companies that want to
expand their horizons.
For example, ecommerce companies can
leverage web store currency localization
for all three of these countries, and for
the same cost that they’d pay for
domestic transactions.
Cross-border selling introduces a new set
of complexities, and isn’t always worth the
trouble, depending on the country in
question. The good news is that three
countries highlighted in this guide are not
only easier to reach, but the average
order volume (AOV) for buyers in these
markets is comparatively higher.
Return rates for cross-border transactions
are lower (6% on average) and
companies that use cross-border strategies
in Canada, the UK and Australia can tap into
these gains without too much additional
investment or effort.1
On a per-order basis, the
average order value for
cross-border sales is 10%
higher than it is for
domestic transactions.

4
Establishing a cross-border brand on your
own is difficult, and it’s not getting any
easier. However, by prioritizing your targets
and focusing on countries that are similar to
the US in makeup, you can establish a viable
cross-border enterprise. And while the
growth of ecommerce penetration is
stabilizing in all three countries, a cross-
border expansion in Canada, the UK and/or
Australia can be a lucrative move, as their
consumers look, act and buy as US
consumers do.
According to research firm Research &
Markets, cross-border online shopper
penetration is the highest in Australia,
China, Canada, Mexico and the UK[VR1].
As you read throughout this guide, many
Canadian, Australian and UK consumers
want access to US goods. These cross-
border buyers are already savvy
ecommerce customers, with many of them
regularly making repeated purchases
outside of their country’s borders.
Customers in the UK, for example, know the
different intricacies of shopping throughout
the European Union, while Australia’s
geographic location and lack of
domestically produced goods makes it a
smart choice for a US etailer looking to
expand its reach in countries where citizens
generally know how to read and translate
prices in US dollars (USD).
Cross-Border Expansion
Developed markets in
the US and UK display a
strong preference for
global stores or those
that are in their
own languages.
By targeting the English-speaking countries
outlined in this guide, the etailer can avoid
one of the biggest hurdles to successful
cross-border commerce: language barriers.
The top product
categories purchased in
international online
commerce include
clothing, electronics,
beauty and health
products.

5
The top categories for these purchases are:
68%
Clothing/apparel, footwear
and accessories
53%
Consumer electronics,
computers/tablets/mobiles
and peripherals
53%
Toys and hobbies
51%
Jewelry and watches
For global shoppers, the US is one of the most
popular cross-border destinations.
What Does the Global Shopper Want?
21%
of all online shoppers buying from US sellers.
When consumers are asked why they shop from merchants
outside their own countries:
76%
Want to be able to pay in
their own local currency
72%
Looking for better prices
49%
Want access to items that
they can’t get in their
own countries
34%
Enjoy discovering new and
interesting products

6
Cross-border trade is complex and full of
risk. For example, ecommerce companies
that are selling cross-border must know the
Harmonized System (HS) codes for all of
their products to meet the country’s duty
and tax requirements. This not only ensures
that all requirements are being met, but it
also helps etailers determine successful
selling strategies for specific markets.
When shipping outside of the US, for
example, boots may be taxed differently
than shoes.
These requirements all have to be factored
into your cross-border strategy.
Also, when assessing which goods can or
can’t be shipped to other countries, it’s best
to avoid perishable goods, pet foods/
medication, any over the counter drugs that
exceed a 90-day supply or any pesticides/
insecticides. Other products to avoid include
roots, plants or other soil-reliant products
that could unwittingly bring contaminants
into the country.
This guidebook will help you navigate the
process and maximize your success. As with
any new business opportunity, there are
rules and regulations to factor in, subtleties
to understand and processes to follow.
Read on for the etailer’s
ultimate guide to all
three markets.
Your Ultimate Guide

8
Canada
In Canada, 2019
cross-border ecommerce
adoption was 72%.
The US shares much more than a 5,000-
mile border with Canada. With a common
language, similar household attributes and
lifestyle characteristics and economic
interconnectedness, Canadians are
Americans’ kindred spirits when it comes to
conspicuous consumption.
With a population of 37.7 million, Canada
presents an excellent opportunity for a US
ecommerce company that wants to gain
access to new markets. In fact, many
Canadian television stations in the Toronto
market carry US feeds, which means
consumers are also accustomed to seeing
ads for American products while watching
their favorite shows.
Canada United States
8%
only shop cross-border
56% 27%
Consumers that shop both domestically and cross-border: Shopping online is popular in Canada, where
eMarketer says domestic retailers were slow
to invest in the necessary ecommerce
infrastructure. In 2019, ecommerce
experienced a 20% growth, with double-
digit annual gains expected for years to
come. Retail ecommerce reached $64.56
million (CA) in 2019, up 21.1% from 2018
and representing 10% of all retail sales. By
eMarketer’s estimates, a “significant portion”
of consumers in Canada shop from
international sources, mainly US sites.4
Direct-to-consumer brands like Warby Parker
and Allbirds are just two examples of etailers
that invested in their online brands. Both
experienced success in the cross-border
market where foreign consumers are always
looking to buy more from US etailers with
which they have an existing relationship (or,
that they recognize through good
branding/marketing).

9
Canada
According to the Canadian Internet
Registration Authority, on orders of less than
$100, 53% of digital buyers in Canada
transacted with US sites (versus 15% on
Canadian sites).5
In Canada, a significant
proportion of ecommerce spending
goes to non-Canadian websites, according to
the independent financial news source
The Paypers, while 45% goes towards
purchases from non-Canadian websites.
One-third of the total is spent in the US, and
the trend of Canadians shopping overseas is
driven by lower prices and better
selection in other markets. For example,
Canadians can purchase products at a
discount from Amazon’s US website,
where prices remain favorable even when
duty and taxes are added.
One effective way to accommodate the
Canadian consumer’s preferences is by
establishing a Canadian version of your
existing brand. One large clothing retailer,
for example, set up a .ca website that
appealed to Canadian consumers, but that
relied on the firm’s existing marketing,
finance and logistics operations.
In Canada, the items
most frequently
purchased online include
clothing, books,
consumer electronics,
footwear, children’s toys,
personal care products
and jewelry.6
United States
VS
China
A recent International Post Corporation’s
Cross-Border Ecommerce Shopper Survey
found that of cross-border digital buyers
in Canada sourced goods from:
53% 30%
What the Costumers Want
Where Canadian consumers already know
that they’re going to take a hit on the
exchange rate based on the value
of the US dollar—and they know they’re
going to pay taxes and shipping – they don’t
want to pay duties. That means
that if you’re not suppressing or subsidizing
the duty, even the most impressive
Instagram, Facebook or Twitter
following won’t be able to make up for the
lost sales and abandoned shopping carts.
This approach not only helped customers
“feel” like they were buying from a local
Canadian retailer, but it also allowed the
brand to offer a high level of transparency
around shipping costs and duties (e.g., listing
prices in Canadian dollars, offering free
shipping for orders over $50, etc.). This
independent Canadian site wound up
quadrupling its business versus the rest of
the countries that the apparel retailer served.
With American retailers like Walmart, Target
and Nordstrom all setting up shop on
Canadian soil, consumers in the
country are well-versed in the process of
buying from US brands. In fact, a significant
percentage of international retail stores are
situated in the country. These consumers
are also very aware of assessorial or “add-on”
costs, and know how to cross-compare total
landed costs before making buying decisions.
One of the best ways to address this issue is
by working to eliminate or “mask” the duty
on your website, and ensuring that the
shopper pays only for the product, tax and
shipping (all of which they would have
to pay for anyway).

10
Canada
On orders <$100,
42% of digital buyers
in Canada transacted
with US sites.
Delivery Expectations
85%
of customers nationwide
use standard
shipping
15%
use express shipping
Over half of all ecommerce orders are
shipping to Ontario, followed by BC, Alberta
and Quebec. Using a hub-to-delivery
method, 89-95% of all orders get to
Toronto, Ottawa and Montreal with four
days; 92% to Alberta within seven days,
and 3% to BC within eight days.
42% 15% 39% 15%
United
States
sites
United
States
sites
On orders
over $500
Canada
sites
Canada
sites
On orders of
less than $100
Canadians are willing to wait for
their ecommerce orders.
According to Deloitte, as ecommerce
sales have grown in Canada, consumers’
preferences and expectations for
delivery have also increased, though their
willingness to pay for shipping has
dropped. Canadian cross-border
shoppers have reasonable expectations
when it comes to delivery speed (less
than a week), but offering free or heavily
subsidized shipping is the key to winning
these consumers’ hearts.
Generally, lower-value orders are bought
from US sites, and more valuable items
are procured from domestic sites.
According to the Canadian Internet
Registration Authority, digital buyer in
Canada transacted with:7

11
Canada
When shipping to Canada, companies must
also factor in the duties and taxes (D&T)
associated with these shipments.
Canadian consumers are keyed into these
“additional” costs, with Delivery Duty Unpaid
(DDU) and Delivery Duty Paid (DDP) being
the two Incoterms that etailers shipping via
parcel need to know. These Incoterms
identify the party responsible for paying the
duties and taxes, with DDU signifying the
buyer/receiver as the payer and DDP placing
the company/seller in the position of paying
all duties, clearance fees and taxes on behalf
of the consumer.
Your approach to DDU and DDP is important
because it can directly impact shopping cart
abandonment rates. It’s not unusual for
Canadian shoppers to abandon their
shopping carts after filling them, getting to
the checkout page and realizing that DDU is
the only option available. With lowcost
items, for example, companies may assume
that it’s okay to let the buyer take care of the
duties and taxes, but this can drive up
One key consideration when shipping to
Canada is de minimis, or the value of goods
that can be shipped into the country without
having duties or taxes assessed on them.
With the new US-Mexico-Canada Agreement
(USMCA), this fee was raised to $40 (CAD).
The new agreement also raises Canada’s
duty-free shipment to $150. That means only
tax is now collected for goods valued
between $40 and $150 (anything higher and
both duty and taxes apply).
It’s important to note that the de minimis is
staying at $20 for postal clearance, which
means more companies will need to work
with providers that utilize commercial
clearance to take advantage of the new de
minimis threshold.
These changes expand the opportunities for
US ecommerce merchants selling mid-priced
items like clothing, small consumer
electronics, personal care items and books.
According to the Office of the US Trade
Representative, shipment values up to these
levels can enter with minimal formal entry
procedures, making it easier for more small
and medium-sized businesses to take part in
cross-border trade.8
Large US apparel retailers, for example, are
selling numerous items priced at under $150,
sometimes as low as $25, or possibly more
than the shipping, handling, duty and
taxes associated with that sale.
Where US ecommerce companies have a
built-in advantage is in the fact that there
won’t be duties on that $25 item, which
means Canadian consumers will pay only
shipping and taxes (which they’d have to pay
when buying from a Canadian online seller
anyway). This helps level the playing field for
a greater number of international merchants
to compete with domestic sellers and within
some of the same
product categories.
shopping cart abandonment while also
impacting sales.
A better approach is to use DDP, which will
result in an overall better consumer
experience: no surprises and fewer steps. On
the downside, it comes with the price of a
potentially larger landed cost at checkout
and fewer sales conversions.
Other Duties, Taxes and Tariffs
De Minimis Tax Rule

12
Canada
Staying Compliant
All products shipped to Canada need a
10-digit tariff classification code used to
assess duties and tariffs, and determine free
trade benefits for those shipments. Known as
the “customs tariff,” this classification system
is based on the HS and requires all products
to be properly coded before arriving at the
Canadian border.The HS serves as the
foundation for the import and export
classification systems used in the US and by
many of its trading partners. It assigns
specific six-digit codes for varying
classifications and commodities, and
countries can add longer codes to the first
six digits for further classification. The US
uses a 10-digit code to classify products for
export (known as a Schedule B number) with
the first six digits being the HS number.
There is a Schedule B number for every
physical product, from paperclips to
airplanes.9
Canada’s de minimis may have increased, but
that doesn’t mean that the rules and
regulations around the trade itself have
lessened. Etailers still have to do all of the
compliance work, which includes calculating
and paying taxes, submitting the right
The majority of Canadian
online consumers shop
on US sites.
The bar for localization is
low—and transit times to
key metros can be
manageable.
As of July 1st 2020,
retailers using
commercial clearance
gain a significant duty
benefit on orders <$150.
Summary:
paperwork, determining the HS codes and
meeting any other customs requirements.
There are also trade restrictions on fish and
wildlife products, and specific restrictions for
companies shipping products to Canada that
include lithium-ion batteries or other
materials that are labeled as “hazardous”
by customs.
These are all important points to keep in
mind when implementing a cross-border
shipping plan for Canada.

14
The UK
With a population of 67.8 million people, the
UK represents an excellent market
opportunity for ecommerce companies
looking to expand their horizons. English-
speaking and already accustomed to doing
business with American companies, UK
citizens also enjoy shopping online and
understand the complexities of cross-border
transactions.
While Brexit is at some point going to
minimize advantages that UK shoppers had
when buying from other EU-based
companies, this major shift will also open up
opportunities. US ecommerce firms that want
to embark on a cross-border trade initiative
in the UK, can effectively level the playing
field for non-EU firms to sell to online
customers in England, Scotland, Wales and
Northern Ireland.
Etailers looking to increase their revenues by
selling to more UK customers should
consider product categories like clothing or
sporting goods; household goods; books,
magazines and groceries; and electronic
equipment, all of which sell well online in
the country.
Savvy shoppers who are familiar with US
goods and brands, UK buyers present both
an opportunity and a challenge for retailers
seeking to win their loyalty. For example,
competition is strong, advertising is costly
and consumer expectations are high. From
contemporary high street shops to vintage
markets on Brick Lane, retail shopping in
fashion-focused London and in the rest of
the UK offers ample choices and an eccentric,
global flair.
With ample internet access and high
smartphone and social network adoption,
the UK presents a compelling opportunity for
vertical brands that can compete on
differentiated products (versus just
promotions and promises of fast shipping).10
Market Size
Consumer ecommerce now accounts for
over 1/4 of the total retail market in the UK
(when including groceries and convenience
stores), and expected reach 1/3 by 2024.12
According to The Paypers, 48% of UK online
shoppers have made an online purchase with
a retailer based outside the UK, which ranks
among the largest cross-border B2C
ecommerce exporters worldwide. The most
intense trade flow takes place between the
UK and US.13
Internet shopping pre-
pandemic was already
more popular in the UK
than in any other major
country, with consumers
in the UK spending online
in 2018 (up 18.2% versus
the prior year).
England is one of the most densely
populated countries worldwide, and
immigration is boosting population across
the UK. In 2012, seven million foreign-
born residents called the UK home—
11.4% of the total population (up from
7% in 1993). Foreign-born residents
constituted 2.8 million of Inner London’s
population in 2012, with India the most
common country of birth.

15
The UK
What the Customers Want
The UK is home to the most English-speaking
people outside of the US, about 95% of its
population (interestingly, Polish is now its
second most-spoken language). And the UK
ranks third in terms of visitors to the US. As a
result, UK consumers are highly familiar with
US customs, pop culture, holidays and retail
trends. UK shoppers are familiar with US
brands and enjoy the ease of shopping
online, especially for items that cater to their
cosmopolitan style and budget.14
Specific to cross-border trade, the most
popular categories are:
A majority of the brands and retailers sell
third-party label products (62%), with
over 36% that sell mostly independent-
label products. The remaining players
operate online marketplaces, according to
Cross-Border.16
60%
Clothing and
sporting goods
49%
Household goods
34%
Books, magazines
and groceries
29%
Electronic equipment
20%
Housewares
40%
Clothing and
fashion accessories
16%
Jewelry
Delivery Expectation
UK consumers that are
already buying cross-
border throughout the
EU understand that it
takes at least a few days
to get the goods from
Point A to Point B.
However, they also reside in geographically
smaller, denser countries, which means
they often have higher expectations when
it comes to getting their orders quickly.
US ecommerce companies can leverage
both sides of the spectrum, understanding
that, while they may not always be able to
offer same-day and next-day delivery
options, the consumers that they’re dealing
with have likely seen their fair share of
having to wait a few extra days to receive
their orders.
By last count, 60% of the population in the
UK shops online, in these top categories:15

16
The UK
Ecommerce Nuances Duties, Taxes and Tariffs
The average online order value of online
shopping orders in Great Britain varies
according to the device used to place
the order. The average smartphone order is
$63.24 USD, for example, while tablet users
spend $78.12 per order. Traditional, offline
orders average $82.67.17
There is uncertainty in the UK market
surrounding the fine details of Brexit during
this guide’s development. With the UK
leaving the European Digital Single Market,
that uncertainty passes along to online
buyers and sellers as well. Any company
already selling into the UK can expect those
sales to become more complex in the short
term, as the country figures out its ultimate
exit plan.
For now, any parcel being shipped to the UK
may be charged a value-added tax (VAT) or
excise duty. Ecommerce companies will also
have to pay tax on US goods whose value
exceeds a certain threshold. To calculate the
exact rate due, you’ll need the HS code, with
any VAT being charged on the shipped
goods’ total value (inclusive of import duty).
If you are exporting to the UK, you’ll pay VAT
at the prevailing UK rate on most goods —
currently 20%.19
VAT is not charged if the
value of the goods excluding shipping and
insurance does not exceed 15 GBP ($25
USD), and duties aren’t charged if the value
By 2021, roughly 93% of
UK internet users are
expected to shop online
and at that point will
represent the highest
percentage of online
shopping penetration rate
in Europe.18
This presents a good opportunity for US
ecommerce companies that put time and
effort into developing successful cross-
border selling strategies in the country.
of the goods excluding shipping and
insurance does not exceed 135 GBP
($230 USD).20
While a weaker British pound could force
some buyers to rethink their purchases, the
door of opportunity could open for American
companies looking to support their UK
customers during this time of transition.
This, in turn, could help boost sales during a
period of uncertainty for the country’s
citizens. Key changes could include tax shifts,
new duties or other moves that will impact
international transactions.
US ecommerce companies can drive some of
the Brexit driven uncertainty out of the
picture by always quoting current duties and
taxes upfront, creating website content
that includes local currencies and doing
everything they can to create a level of
confidence in the consumer’s mind.
Anything you can do to take the risk off the
table at this time will help support your
cross-border sales strategy.
It’s important to remember that the UK’s exit
from the “Eurozone” puts American
merchants on an equal footing with
European merchants in terms of duties and
taxes. If the cost of goods from continental
Europe rise as expected—and
with some buyers experiencing “sticker
shock” when buying from outside of the
UK—the cost of US goods will become
even more palatable.
With continental Europe no longer holding
the pricing advantage, the opportunities for
US etailers will surely expand.

17
The UK
Staying Compliant
Ecommerce companies that are expanding
their cross-border operations into the UK will
at minimum need to:
• Get an Economic Operators Registration
and Identification (EORI) number; businesses
and people wishing to trade must use the
EORI number as an identification number in
all customs procedures when exchanging
information with customs administrations21
• Get the right commodity code for your
goods; this may require you to apply for a
Binding Tariff Information (BTI) ruling, which
is a written tariff classification of your goods
• Check to see if you need any import
licenses for your goods, and apply for them
as needed
• Arrange transport logistics
• Declare your goods to customs—or have a
freight forwarder or customs broker do this
for you
• Pay any required duty or VAT before your
goods will be released by
customs authorities22
Like any country, the UK has specific
requirements around what can and cannot
be shipped into the country. Protective of its
natural environment, the country doesn’t
allow any products that might bring bugs or
animals into the region, and it requires wood
to be fumigated. Food products, controlled
medications and dangerous goods (including
swords that exceed 22” in length) are also
prohibited. Finally, baby products made
outside of the EU are not allowed to be
shipped to Great Britain.
The UK also has strict regulations on the
import of perfumes, aerosols and other
flammable products. The list of prohibited
goods doesn’t end there, which means that
all etailers should have good visibility into
exactly what’s in the packages that they’re
shipping and whether any of those goods
will be held up at customs due to non-
compliance.
The UK was already
leading the world in
ecommerce
penetration before
the pandemic. Now,
it’s accelerating.
Brexit is causing UK
shoppers to look
twice at US brands,
which are now more
cost competitive.
Beware of unique
and strict import
regulations regarding
certain products.
Summary:
To avoid problems in this area,
ecommerce companies should put on
their “global hats” and think beyond US
borders when writing product
descriptions and using marketing
language. Boil the message right down to
the product function by using language
that customs officials speak to ensure
that your products get through the
intake process as quickly as possible.

18
Australia

19
Australia
With a population of 25.5
million people, Australia
has become one of the
top 10 ecommerce
markets in the world.
With 53% of its population shopping both
online domestically and cross-border, and
with 8% of its online shoppers only using
cross-border shopping, Australia represents a
significant opportunity for US.23
Australia has good ecommerce penetration,
with almost 70% of the population buying
online. The market is well supplemented by
mobile commerce; purchases via mobile
accounted for nearly 30% of all online
shopping purchases.
Australian consumers are also comfortable
with cross-border ecommerce, and are
among the most likely online consumers to
shop from overseas.24
Many Australian retailers with physical stores
have capitalized on their brand recognition
by migrating offerings online to lower their
overheads. The opportunity is strong for US
etailers to do the same. This consumer
behavior demonstrates an appetite for online
offerings from known brands. Australian
consumers might experience such brands
while visiting the US or via online media.
Australians who have lived in the US and
moved back, or American ex-pats living in
Australia are likely to gravitate to these
brands.2
Market Size
Limited in terms of its natural resources and
industries, Australia is water-locked and
therefore accustomed to waiting for
shipments to arrive from other countries. As
such, its consumer base is tolerant of longer
delivery times.
in a world where many others are not. This
puts the US ecommerce company in an
especially good place, being that it needs
days or even weeks to get its goods to
Australian shores.
In 2018, Australians spent a total of $28.6
billion AUS ($20.3 billion USD) shopping
online. As of early-2019, online shopping
was responsible for 9% of Australia’s total
retail sale.
By 2021, Australia’s ecommerce market
penetration rate will reach 85.2%, and the
number of people buying online will be 22.0
million.25
Second only to China, the US is currently
Australia’s largest online trading partner. In
2018, 21% of all ecommerce purchases
involved US merchants.
The biggest share of those sales went to
fashion (25%), consumer electronics
(17%) and health and beauty products
(15%).26

20
Australia
What the Costumers Want Ecommerce Nuances Duties, Taxes and Tariffs
Australia is cross-border retail’s second-
largest market, with top product categories
including shoes, dresses, tops, coats, pants
and bags.
Australia exempts foreign websites from
charging a 10% general sales tax on
consumer purchases under $1,000 AUS. This
is an advantage for Australian consumers
who are interested in international brands,
and helps inspire the growing number of
cross-border transactions, compared with
domestic ones.27
Based on their geographic isolation,
Australian consumers are not put off by the
slower speed of cross-border purchases, with
36% of them expecting cross-border
shipments to take two weeks or longer.
Australian consumers also have a lower than
average returns rate of 3%, compared to
almost 6% globally.28
As of May 2020, Australian
consumers have increased
online shopping 49%
year-over-year.29
In 2018, the Australian government passed
a law that extends the 10% goods and
services tax (previously reserved for $1,000
or greater) to most low value imports,
with exceptions to the tax including
perishable goods and health aids. The impact
is only on taxes (not duties) and does not
vary by region.30
This was done in the name
of leveling the playing field for domestic
merchants who found themselves unable to
compete with online, cross-border sellers.
With a demographic makeup that’s similar to
that of Canada, Australia requires a
customized marketing approach that
almost makes consumers “feel” like they’re
buying locally. To offset the 10% tax that the
government recently imposed on all
incoming orders, for instance, some
merchants got creative and offered coupons
to offset that tax. The strategy worked well
and people began to get into the cross-
border ecommerce pool after temporarily
steering clear of it due to the tax hike.
This is just one of many ways that online
sellers can use market intelligence to learn
what their customers want and
how they’ll react to government-imposed
triggers, and then figure out ways to
circumvent them and keep their
customers happy.30
To establish your cross-border business in
Australia, you’ll need to obtain an Australian
Registered Body Number. This is a nine-digit
number assigned by the Australian Securities
and Investments Commission when an entity
registers as a foreign company with it.
This number will be used on all
communications with government agencies
and other entities about your company and
its products. You’ll also need an Australian
Business Number. Required for all companies,
this 11-digit number helps streamline
communications with governmental and
tax offices.

21
Australia is a fast-growing
ecommerce market,
where online adoption
has yet to peak.
While import taxes have
risen in recent years,
Australian consumers still
demand US products.
Consumers generally have
lower expectations
around cross-border
transit times than
counterparts in Canada
and the UK.
Summary:
Australia
Staying Compliant4
Over the last few years, the Australian
authorities have become increasingly
stringent on customs clearance. For
example, any item that includes the words
“freezing” or “frosty” in its description may
trigger a separate, $120 (minimum)
inspection. The more documentation that’s
required, the more expensive that inspection
becomes. In cases where it’s more expensive
to ship back the merchandise than to destroy
it, the destruction fee is $25 per item.
Use the auto brake replacements of a 1962
Chevrolet as an example. While the cars no
longer use asbestos brakes, the vehicle was
made before 1970 and requires an asbestos
certification before the shipment can be
released. (This has to come from the
manufacturer itself, versus the freight
forwarder or logistics provider). As a result, a
red flag up goes to Australian customs.
Similar to the UK, collectible swords
exceeding 22” in length will be rejected by
Australian customs authorities, which
consider these to be weapons. The country is
also strict with seemingly innocuous
products like microscope slides, which often
include biological ingredients and must go
through a certain process of clear staining
and sealing before they can be shipped
to Australia.
Ecommerce sellers should also avoid
shipping unfinished wood products to
Australia, which requires a fumigation
certificate.
Any product that includes animal hair (e.g., a
horse saddle) will also need a fumigation
certificate. Finally, Australia doesn’t not allow
the import of any seeds for planting, food
supplements, pharmaceutical products or
fertilizers.
In general, it’s important to understand that
all countries are protective of their natural
habitats, natural resources and citizens, and
that the customs rules put in place are
generally meant to protect one or more of
these entities from harm.

22
The countries highlighted in this guide all make good targets for cross-border
ecommerce companies. The three countries are all English-speaking, with each of
them offering their own “virtual” extension of a US retailer’s existing business,
workforce and infrastructure. Here are nine more commonalities across all three:
Commonalities Across Countries
Advertising is easier.
Social media and web advertising have made
it easier (and cheaper) for American
companies to advertise their products cross-
border. One Pitney Bowes client and major
US retailer, for example, used an Instagram
post to show off its new hoodie and received
55,000 hits within three minutes.
There’s uncertainty in the air.
Even pre-pandemic, the landscape had
already begun to shift. USMCA changed
Canadian duties; China-US trade tensions had
escalated; the UPU had begun to allow self-
declared rates. These changes have been
amplified by the uncertainty of
the pandemic.
The playing field is leveling.
There’s been a leveling of the playing field
for cross-border merchants in all but one of
the three markets, with Australia’s 10% tax
effectively leveling that playing field for its
domestic sellers. However, there are effective
ways to work around Australia’s 10% tax and
get consumers interested in your products.
Limit the need for localization.
By focusing on English-speaking markets,
you minimize the effort required to reach
the most consumers effectively. Cultural
similarities and shared trends provide
tailwinds when selling your
products internationally.

23
Create accurate product
descriptions.
Don’t try to get too fancy with this step.
The description should be tailored to the
product that you’re selling, and shouldn’t be
worded in a way that sets off any red flags
(i.e., don’t call your salt-and-pepper shakers
“grenade shakers”). The best description is an
actual, accurate description of the product
versus a marketing pitch.
It’s what’s in the box
that counts.
The major difference between shipping
domestically and dealing with cross-border
transactions is that for the latter you also
have to worry about what’s actually packed
in the box (and what materials went into
those products and the country of origin of
those materials). This will help you determine
whether the products can be shipped to your
cross-border customers, how much you’ll
have to pay in duties and taxes, and just how
quickly your shipment will clear through
customs.
A happy cross-border customer
is a repeat customer.
In the end, you have to keep your customers
happy if you want them to come back for
more. The last thing you want is for
customers to be disappointed because their
order was stuck at the border for two weeks,
or because they wound up having to pay an
additional fee when it arrived on their
doorstep. You also want to make the returns
process as frictionless as possible and be as
transparent as possible with pricing, knowing
that there will be duties, taxes and other fees
to factor into the total landed cost of
any product.

24
Ready, Set, Go!
Expected to make up 20% of worldwide
ecommerce sales by 2022, when it hits $630
billion, cross-border ecommerce is a good
way for US companies to expand their sales
without having to invest heavily in
infrastructure, people or technology. By
tweaking their existing platforms slightly and
taking the time to learn the nuances of the
three countries highlighted in this guide,
companies can effectively leverage the
opportunity and increase their sales by as
much as 10%.
The road to cross-border success holds risk
and roadblocks that not all domestic
ecommerce companies will be prepared to
handle on their own. To ensure optimal
success, you’ll need logistics processes and a
technology infrastructure that supports your
cross-border marketplace storefront. These
systems should be developed and tested well
ahead of launch. For those companies that
choose to go at it alone, this often means
new partnerships with logistics service
providers that specialize in both cross-border
trade and last-mile delivery. It also typically
requires custom integration development
that, along with your logistics processes,
must be tested at scale to ensure stability
during peak promotional periods.6
When selecting a cross-border parcel vendor,
be sure to find one that’s familiar with your
product catalog and can handle your parcel
volume. To ensure alignment, accurately
assess your shipping profile, manage your
systems integration and clearly define your
process mapping—the visual planning and
management of the flow of work for your
ecommerce supply chain.
Even if you’re already getting some level of
traffic from one or more of the countries
highlighted in this guide, the opportunity to
do more in these markets lies right in front of
you. All three countries are unique in that the
threshold you must hit to make cross-border
trade accessible is fairly low compared to the
rest of the world. However, if you haven’t
rolled out an official cross-border trade lane,
then you’re probably losing these customers
after the first sale and leaving money on the
table. Rather than miss out, follow the advice
in this guide and use it to develop your own
customized, highly successful cross-border
ecommerce strategy.

25
[1] https://www.invespcro.com/blog/ecommerce-product-return-rate-statistics/
[2] PayPal Cross-Border Consumer Research 2018
[3] Pitney Bowes Online Shopping Study 2019
[4] eMarketer, Canada Ecommerce 2019
[5] IPC, CROSS-BORDER E-COMMERCE SHOPPER SURVEY 2019
[6] Borderfree, Canada Country Report
[7] eMarketer, Canada Ecommerce 2019
[8] USTR, https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement/fact-sheets/modernizing
[9] International Trade Administration, https://www.trade.gov/harmonized-system-hs-codes
[10] Borderfree, UK Country Report
[11] Export.gov, https://www.export.gov/apex/article2?id=United-Kingdom-eCommerce
[12] https://www.emarketer.com/content/uk-ecommerce-2020
[13] The Paypers, Cross-border Ecommerce Opportunities, https://thepaypers.com/ecommerce-facts-and-figures/uk/6
[15] Statisa, https://www.statista.com/statistics/275973/types-of-goods-purchased-online-in-great-britain/
[16] Cross-Border, https://cross-border-magazine.com/uk-top-500-e-commerce-report-2020/
[17] Statista, https://www.statista.com/statistics/960448/great-britain-online-shopping-order-values-by-device/
[18] Statista, https://www.statista.com/topics/2333/e-commerce-in-the-united-kingdom/
[19] https://smallbusiness.co.uk/import-guide-2544119/
[21] https://ec.europa.eu/taxation_customs/business/customs-procedures/general-overview/economic-operators-registration-identification-number-eori_en
[22] https://smallbusiness.co.uk/import-guide-2544119/
[23] PayPal Cross-Border Consumer Research 2018
[24] https://thepaypers.com/ecommerce-facts-and-figures/australia/15
[25] https://www.webalive.com.au/ecommerce-statistics-australia/
[26] Australia Post, Inside Australian Online Shopping, https://auspost.com.au/content/dam/auspost_corp/media/documents/inside-australian-online-shopping-ecommerce-report.pdf
[27] Pitney Bowes’ 2017 Global Ecommerce report
[28] https://thepaypers.com/ecommerce-facts-and-figures/australia/15
[29] https://www.statista.com/outlook/243/107/ecommerce/australia https://www.adnews.com.au/news/online-shopping-orders-have-increased-49-this-year?utm_medium=email&utm_
campaign=PM%20-%20Thursday%20May%2014%202020&utm_content=PM%20-%20Thursday%20May%2014%202020+CID_df7283fe7600b185b182de9f6082cedc&utm_source=Email%20
marketing%20software
[30] https://thedispatch.pitneybowes.com/retail/recommendations-for-the-australia-gst/
[31] Forrester, https://www.forrester.com/report/Forrester+Data+Online+CrossBorder+Retail+Forecast+2017+To+2022+Global/-/E-RES137898

Top 3 markets guide

More Related Content

What's hot

Similar to Top 3 markets guide

More from Pitney Bowes

Recently uploaded

Top 3 markets guide