Advantages of using DDP and DDU mode of shipment
In our last article, we had understood the meaning of DDP / DDU shipments. In this article, we will explore the advantages of these shipments and know how these could help in increasing the profitability of the sellers.
Below are some key advantages of DDP / DDU shipments:
1) Capturing new buyers with ease
DDP shipment mode protects buyer interests as the responsibility of delivering the goods is on the seller. A lot of buyers hence prefer DDP; they can purchase products without the hassle of shipping.
As a case in point, a leading apparel export house based out of Gurgaon was initially executing FOB shipments (where the logistics post origin port is covered by the buyer). They decided to try a DDP shipment to cater to a new buyer request. After executing a DDP shipment through Intoglo, (a leading cross border logistics provider specialising in DDP shipments), the seller started using DDP mode of shipment as a mode while acquiring the new customer. Over the last 12 months, the number of shipments have moved up by 100% because of the DDP mode. The export house has been able to generate newer orders, and achieve significant increment in revenue.
2) Tapping in to Global e-commerce opportunities
Most global E- commerce marketplaces like Walmart, Amazon, Etsy ask their cross-border sellers to deliver goods to the destination warehouse through DDP mode from where they then do last mile shipping to end customers. Scaling one’s cross border business through ecommerce marketplaces is a great way to acquire new customers.
Amazon Global Selling is such an export focused program which offers Indian sellers an opportunity to sell their products globally. Sellers can ship their products to 18 global marketplaces and sell in 200+ countries & territories. Through Fulfilment by Amazon (FBA), a seller has to ship their products to Amazon’s global Fulfilment Centres (FC) and Amazon takes the responsibility of last mile delivery as and when orders are placed.
To deliver the products to the Amazon FCs, the seller needs a logistics provider that can deliver DDP shipments. There is also an Amazon Service Provider Network where sellers can choose Amazon verified vendors for international shipping.
Over 100,000 sellers across India are already availing these services to sell globally, and Amazon is planning to achieve USD 20 billion in revenue through Global selling from India by 2025.
Intoglo is also an Amazon verified service partner executing DDP shipments for multiple Indian D2C brands and MSMEs selling on Amazon globally. We have helped 50+ brands sell globally through Amazon till date. Right from appointment scheduling at Amazon FC to providing the proof of delivery, we are certified experts at Amazon FBA shipments.
3) Earning higher margins :
In DDP/DDU shipments, theseller undertakes risk to deliver the goods to the destination unlike Freight on Board (FOB) shipments where the buyer assumes the risk. In FOB shipments, the buyer usually chooses a freight forwarder of their choice but in DDP/DDU, the entire responsibility is on the seller.
Since the seller is assuming the risk, they can charge a premium over and above the shipping charges. This can be done via charging the shipping cost with premiums to the buyer or adding it in the margin itself. Hence DDP/DDU shipments give an opportunity to the seller to increase their profit margins.
4) Superior customer experience
In DDP mode of shipment, the seller can provide better customer experience since they take charge of risk of loss/damage. Choosing the right logistics partner, who is an expert at executing DDP shipments is key here.
By providing a clear visibility to the buyer on their shipment status, the seller can guarantee a superior customer experience. Additionally, the seller can have a control on the quality of the shipment since they would be choosing the shipping partners.
To know more about end to end or DDP shipping, please write to us at contact@intoglo.com
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