When online shoppers rev up for Cyber Monday, a sea of Furbys, Barbies, and Kindles will start traveling across the globe at a rate that would make Santa’s reindeer take note, and many of them will get to their destinations with an assist from a local company.
Popular e-commerce sites such as ToysRus.com and Amazon.com are using i-parcel, based in Burlington, to speed up thousands of international deliveries. Through a matrix of technology and old-fashioned courier services, i-parcel provides service in 92 countries, processing orders and payments in 56 currencies.
International deliveries are becoming increasingly important to US retailers. Global business-to-consumer e-commerce sales are expected to exceed $1.25 trillion by 2013 according to Interactive Media in Retail Group, a trade organization based in Britain. That’s up from $961 billion in 2011.
“Right now we are in lock down, bracing for the storm,” said Jordan Welch, one of i-parcel’s five founders.
Billing itself as an alternative to FedEx, UPS, and DHL, seven-year-old i-parcel promises Internet merchants a less expensive and more customer-friendly way to move goods around the globe.
Here’s how it works. When a customer outside the United States buys something on ToysRus.com, i-parcel’s technology kicks in. Through geo-location software, the sale is translated into the shopper’s currency. That allows the online payment, including all taxes, shipping, and duty charges, to be processed and prepaid.
That way, Welch said, there are “no surprises when the package arrives.”
Once payment is secured, i-parcel picks up the order from a US Toys “R” Us distribution facility and transports the goods to one of three expediting centers the Burlington firm owns. Packages are logged in, scanned, labeled, and placed in containers for airline shipping. Local couriers on the ground in cities around the world then complete the deliveries. Customers can track the entire process online.
The 80-employee i-parcel is able to keep costs down because “we don’t fly planes or have people in uniform,” Welch said.
Because of lower overhead and a typical five- to seven-day delivery window — instead of costly overnight shipping — companies that use i-parcel can sometimes cut shipping charges for customers by up to 50 percent.
Having worked in the international mail delivery business for 22 years, Welch said, he knew overseas shipping was ready for an overhaul. “Large shipping companies were not designed for modern business,” he said.
Debbie Pereira, director of marketing for DrJays.com, an urban apparel company based in New York, said she is impressed by i-parcel’s response to fast-changing delivery needs.
“They are a bit more nimble in their ability to adapt and make changes quickly,” she said.
In the year-and-a-half DrJays has partnered with i-parcel, its online business has expanded to Brazil, Russia, and South Africa.
The difference between FedEx — which DrJays also uses — is like “apples and oranges,” said Pereira. “I-parcel is more personal. They are also more cost efficient and are able to give us more flexibility.”
FedEx decline to comment, but DHL said it works to make sure its international e-commerce business is as efficient as possible. Two years ago, it partnered with FiftyOne — a New York company that competes with i-parcel — according to DHL spokeswoman Bea Garcia.
For online retailers, collecting shipping, taxes, and duty charges up front is a big improvement over traditional ordering methods, Welch said. Most major shippers don’t calculate international charges in online shopping carts, he said.
“Oftentimes the Internet shopper doesn’t know what the costs are at the cart level. When the package gets to the door, they have to pay costs they may or may not be expecting,” said Welch.
Pereira said that can result in unhappy customers.
“You feel like you are getting slapped with something again,” she said.
Plus, as the e-commerce world gets bigger and the retail world smaller, she said, “some online shoppers don’t even know where their goods are coming from.”
Toys “R” Us, based in New Jersey, started using i-parcel for international e-sales last month. So far, the company said, it’s pleased with the results.
“Global expansion is an important part of our global strategy. They provide additional accessibility to more than 60 countries,” including Brazil and Mexico, said Milton Pappas, vice president of e-commerce customer experience for Toys “R” Us.
Pappas considers i-parcel “a logistics and technical provider,” making it easier for international customers to buy games, toys, and baby merchandise only offered on its US site.
“As shoppers worldwide search for items on our site, they are now able to browse for thousands more,” said Pappas.
Toys “R” Us has stores in 36 countries, but it needed i-parcel’s help to ship products from the United States to parts of the world where it doesn’t have a physical presence. Already, i-parcel has helped to double the international reach of Toys “R” Us,
“It’s very difficult for a US company to go into a new foreign market without having very specialized understanding,” said Mark Brohan, vice president of research and product development for Vertical Web Media, publishers of Internet Retailer magazine. “What these companies are doing is developing highly specialized skill sets in marketing, fulfillment, and technology to sell online overseas. This is a niche expertise.”
Many US merchants started courting international online business a decade ago, but quickly discovered “it’s more complex than they thought,” said Brohan. “A lot of US Web retailers tried it and canceled plans, because efficient delivery was not there,” he said. “The trend is accelerating because everyone is going global.”
And that means being prepared to take on new ordering and delivery puzzles. For example, as Toys “R” Us makes inroads in Brazil, i-parcel is experimenting with accepting the boleto, a payment method used there that is akin to an IOU.
“We are constantly trying to address the needs of local markets and offer consumers better ways to get these goods,” Welch said. “You have to be able to innovate in this space.”