CC Collect opens the doors to increased business for eRetailers
The logistics fulfilment sector has long debated the pros and cons of DDU versus DDP. Most larger retailers around the world use DDU (Delivered Duty Unpaid) as their modus operandi for sales beyond their economic borders. With DDU the buyer must pick up the in-country import duty and VAT charges before their purchase can be delivered. With DDP (Delivered duty Paid), the buyer pays the duty and VAT on their purchases up-front, at the time of purchase, effectively within the purchase price.
One simple payment and the buyer is done; with no need to reach for their credit card again. It’s an elegant solution. So DDP looks like the winner every time, right? Or does it?
Let’s look a little closer at what it takes to deliver a first class DDP solution.
DDP – an investment too far?
Let’s say you’re a top global retailer, whose products attract a premium. Perhaps you stock designer brands; or maybe your own brand is strong and well-established. Perhaps you have heavyweight backers. If that’s the case, you’re in luck, because you may have access to spare capital. You’ll need it, to operate that first class DDP solution.
To operate DDP, the eRetailer must make an up-front deposit of a substantial sum with their chosen logistics partner, to offset the costs of all the international deliveries and their associated duty and tax demands. Then they’ll need continually to top-up this capital, to keep pace with sales.
That’s a whole lorry-load of working capital tied up, from before they make even one single international sale – and continually, from that point forward. The sum they keep on deposit will reflect the scale of each retailer’s global ambitions. But it’s easy to see that to compete on a truly global basis, the impact on cash flow, for anything but the more substantial and solidly funded business, is likely to be prohibitive.
Global eRetailers need choice
These are exciting, dynamic times. In a world where eCommerce is experiencing explosive growth, many fledgling eCommerce businesses are taking advantage of internet and mobile technology, and an increasingly tech-savvy customer base. With DDP being simpler and easier for the end customer, it’s hardly surprising that it’s seen as the more desirable solution. But only if they have enough capital to make it work.
Many new enterprises haven’t yet evolved sufficiently to have access either to the capital investment for DDP, or the in-country stock capacity (where sales are deemed to be ‘national’ and not complicated by international borders – like Amazon, for example). Those eRetailers without the necessary scale or funding will need to use the more cost-effective DDU option. Not only that, but many larger eRetailers would, given a workable alternative, choose to escape from the financial shackles of DDP.
What was needed was a solution which could bridge the ‘perception gap’ between DDU and DDP, for those enterprises who either cannot fund their own DDP solution, or, importantly, for those larger enterprises who could operate DDP, but would rather not tie-up bank vaults of their working capital in the supply chain.
One of the downsides of traditional DDU is the fact that the retailer effectively loses touch with the buyer, once the parcel arrives at the destination port. That’s because it’s the responsibility of the customs broker to collect the import duty and tax and liaise with the final mile delivery agent. But by recommending CC Collect at the time of purchase, the retailer can maintain that valuable connection with their buyer. When the customs broker requests payment of the duty, the buyer, already familiar with CC Collect, is confident in making payment and has an efficient tool with which to do it. This speeds up the process, providing a seamless delivery experience for the buyer and enhancing the retailer’s brand reputation.
CC Collect delivers DDU – payment processing re-imagined for the 21st century
CC Collect has created such a solution, which re-imagines DDU for the 21st century eRetailer and eCommerce shopper – using smartphone and tablet apps to deliver a frictionless collection environment.
CC Collect provides any eRetailer of any size with the means to offer DDU, attractively packaged for their customers, self-contained and elegant in a recognisable app format, with which everyone today is now totally comfortable.
CC Collect is built in-the-cloud, so can accommodate global traffic from all regions of the world. App-based, duty and tax can be collected at any time and wherever the buyer happens to be. This shortens the time it takes for collection and reduces the lag in terms of delivery, compared to the DDP equivalent.
The system has been designed specifically to make it an attractive option for global eRetailers who now have no need to go down the costly DDP route.
CC Collect Pay is the answer for many eRetailers who wish to offer their customers a better all-round delivery solution without it negatively impacting their bottom line. It also provides another customer touch-point – enabling the eRetailer to continue a more personalised conversation with their customer.
CC Collect in action
Would you like to see how easy it is for your customers to use CC Collect Pay? Our short film highlights a scenario in which a buyer uses the CC Collect app to pay the tax and duty they owe on an international purchase.
If you would like to offer the CC Collect system to your clients at zero cost to you, please complete our partnership form and we will get in touch with you.
A message for the eShopper
The reason you’ve download our app or visited our website is because your eRetailer has chosen to use a logistics partner who has incorporated CC Collect into their collection process.
If they had not, you would have received a letter in the snail mail and would be waiting longer for your goods to be be delivered. The fact that you now have access to the CC Collect app on your smartphone or tablet means that in future your purchase will arrive even more quickly, as you can store your credit card information inside the app or by using your existing PayPal account.