In our Leaders section, the GELF team interviews Anthony Khedaywi, CEO of Indestructible Dog and one of the panelists from GELF LA ’16. Anthony also participated in the Q3 ’16 GELF Research Study and is quoted in the resulting white paper, Ready to Deliver More Authentic Cross-Border Shopping Experiences? Start with Smarter International Shipping!
We encourage you to download the white paper at the research sponsor Yakit’s site. Thanks all.
Sure, Indestructible Dog was founded in 2010 as an online-only niche business venture and still mostly is. How many times have you hear, “my dog destroys everything!”? As dog lovers, we’ve heard this many times and knew there were products that genuinely last, but there wasn’t anyone focusing specifically on this challenge. We really see ourselves as the store of last resort for many dog lovers – and for dogs that love destroying toys. And both segments are global, so we know that we needed to be global from Day One.
We are a Shopify customer, so it was easy to get our ecommerce business up and going. We only advertise in the US, yet word got out globally and intn’l growth has been very steady. Before we knew it we were seeing 10% of our revenues from cross-border.
We started first with Canada and offered flat rate intn’l shipping via USPS and used UPS for bigger orders to Canada. But we found that this was very expensive especially considering surprise fees from tariffs and import taxes. Before we started working with Yakit, we used to preauthorize orders for $250 and then gave them a real cost that was more like $20. But that was a very bad experience and we found there was no way to ship a ten-dollar dog toy cost effectively.
There were lots of other moving parts and one especially big challenge was all the restrictions for edibles like treats and chews. We built our own processes and systems as we moved more volume to international markets, but our platform wasn’t set-up for screening for border restrictions. For instance things like animal flavorings could trigger red flags at the border.
[See chart below for ID’s international ecommerce sales map today]
We just sell direct to consumer and not via intn’l marketplaces. Possibly we will, but we’re not sure. Part of the reason we’re not using marketplaces stems from the fact that a lot of our value-add comes down to consumer education and finding the right product for the right dog. We are much more knowledge-based than the big box retailers that sell pet products and the same idea extends to marketplaces, which are often like big boxes in that they offer lots of commodity-type products.
Engaging content is required to tell the Indestructible Dog story and this extends beyond just explaining how tough and durable our products are. Take for instance our return policies. Once a dog touches most doggie products you can’t return them. But we are different because we offer a 60-day return policy which is very unique in our industry. This key point of differentiation kind of gets lost easily in marketplace environments.
For now, it’s just the US site and we are shipping internationally from the US. But if we had the right platform we might consider building localized sites. And the main reason would be to display the right currency and non-restricted products. The ideal trajectory for us would map to the framework you GELF guys have developed.
We see some local operations in our future. For instance, dimensional weight is a big challenge now so we are exploring how to stage inventory internationally.
We own our own warehouse which handles about 95% of the volume. But we are revisiting the drop shipping especially due to the dimensional weight issues I mentioned. Consider dog beds which are rather lightweight but are bulky and that means they are expensive to ship. This ties up money because if it’s going to an international customer, we have to ship it to our warehouse and then back out again and this is a waste. It’s kind of crazy that we get an order from Australia and the supplier ships it from LA to our NC warehouse and we turn around and ship it back to LA and then Australia.
The impact on the bottom line is significant when you consider that an eight-pound bed is billed more like a forty-pound parcel. USPS priority would have shipped for $80 to $90 and FedEx express would cost $150 but it would get there really quick. Yet by working with a consolidator like Yakit we could immediately get it down to $30. And we think we can get it down even more with Yakit.
Focus on providing more transparency during the checkout process. Make sure you eliminate any surprises like unexpected tariffs and taxes being due upon delivery. And explore free intn’l shipping.
Before we started working with Yakit we had a flat rate we charged to cover taxes and tariffs into Canada. Sometimes we won and sometimes we lost. After we started working with Yakit, we were able to pass along the real time exact price for tariffs and so forth, so that really took the hedge off, so to speak.
The biggest thing for us – and you don’t see this a lot – is getting the landed cost right before checkout. As the shoppers add to their carts, we are now able to look at their location and send that data to Yakit. Then Yakit is automatically providing a real-time cost estimate all the way to their door. It’s just such a better customer experience.
And now we are exploring flat rate shipping and are looking at the threshold around $99 for free international shipping and $49 for domestic orders. For popular products, we may have to absorb some costs to make free shipping work, but it will definitely improve the customer experience.
Everything we are doing in Yakit’s world is DDP. Everything is estimated up front during the checkout and this process is really the keystone of Yakit’s value add.
Setting expectations with customers is key; if they know during checkout there will be no surprises and will be able to avoid any brokerage fees and other hidden costs, it is a much better shopping experience. If we ship to a country Yakit doesn’t serve, we may end up using USPS and we have to do DDU. So it’s just not the best customer experience.
Of course, transit times internationally depend on destination. For first-world countries it works quite well; for the most part 6 to 12 business which is pretty good – although earlier is always better. In fact, sometimes we luck out and it takes five days.
Order tracking is really important, especially when dealing with USPS because their tracking stops in most cases after the parcel leaves the US. We find that as long as the customer can confidently track where the package is, it takes the anxiety out of picture.
Customer service is another really big challenge. My guys manage customer service for Indestructible Dog and another retail partner of ours in Brazil. We provide chat support, phone, email and social media and when we need to deal with foreign languages, we use Google translate – and apologize in advance. This all usually works quite well and we get nice feedback. In fact, we have a lot of dog lovers from Australia that send us Thank You! Messages. First off, they thank us for existing, which is nice.
Communicating about who will do the final mile delivery is another great customer service tip. Yakit is using the delivery agents that people are used to working with in their market and this is a really good experience.
We are super happy with Yakit – it’s been our first experience working directly with a third party shipping solutions provider. Others have wanted to put an intn’l checkout button on our site or they wanted us to ship to their warehouse where they forwarded the order. But this just didn’t feel right and wouldn’t scale.
When we think of shoppers, we naturally start with dog owners. In some parts of the world people with a dogs are different – maybe it’s a working dog in one country or maybe in India they are just starting to spoil their dog pet. And in the other parts of the world, the dog is a family member.
Millennials are important too. Most are waiting longer and longer to have kids so their first joint ownership of a life is a pet. When they are young and don’t have extra money, well when they get some extra money, they spend it on themselves. But as they get wealthier, they may not be ready to fund a kid, but spending on a pet is a different story.
As incomes increase and the global middle class rises – a lot of whom are Millennials — we think people will spend like crazy on pets. So we can sell much higher quality dog collars for 50 bucks – in England and Australia, they will spend that kind of money on a dog collar. In the US and Canada and Australia, they can throw some mad money at their pets! But on the other hand, we don’t do much with China.
11.Thanks Anthony! Any other parting thoughts as you peer into your crystal ball?
Hey thanks guys. Love what you’re doing with GELF. When I think about the experience that Yakit helps us provide cross-border shoppers, I see a world where someone making purses in Kansas will be selling stuff to people in Poland without even thinking about it. The border crossing will always be an issue that won’t go away, but there are shipping solutions that address the challenges.
In the next few years, I am guessing that intn’l will still be somewhat mysterious. Selling online domestically is so easy but once you take people out of the domestic realm you have to explain the innovations required to sell cross-border to people that aren’t so tech savvy. It takes a lot of education to sell internationally!