Global Distribution Strategies
A look at how two direct marketers fulfill products overseas
You’ve spent countless hours and dollars on your promotional marketing efforts and have succeeded in pulling in orders. Now it’s time to make good on your offer and fulfill the order.
Not only do you have to contend with the intricacies of fulfillment, but you must decide how you are going to transport your product overseas and do it cost-efficiently.
There is no sure-fire way to save on the back end of international direct marketing. How you fulfill largely depends on the product you are shipping and your allowable turnaround time.
Here’s a look at how a publisher and an association get their goods to customers overseas.
Agora & Boardroom
As a consumer publisher with numerous newsletter and book titles on topics such as alternative health and alternative investment strategies, Agora International has explored several options to reduce postage and delivery time since it began marketing internationally in 1992. Today, more than 15 percent of its customers reside outside the United States.
In 2003, Agora partnered with Boardroom Inc. to sell Boardroom products overseas. It currently promotes two newsletters—Bottom Line Personal and Bottom Line Health—and six book titles, including “The World’s Greatest Treasury of Health Secrets,” “The Complete Encyclopedia of Natural Healing” and “Bottom Line’s Book of Uncommon Cures for Everyday Health Ailments” worldwide.
According to Grace Epperson, Agora International’s director of research and development, Boardroom’s first international book mailing to Australia cost the publisher more than U.S.$19 per book to mail the hardcover format from the United States. With a price point of only U.S.$40 per book, it took more than a 4.5-percent response rate to break even.
Because postage is based on weight, softcover books are significantly less expensive to mail than hardcover books. Epperson says Agora convinced Boardroom to test softcover versions of its books, and discovered the format change had little effect on order refund requests. Subsequent book mailings to Australia have been softcover versions, which have cut fulfillment costs considerably.
“We saved 25 percent to 30 percent in postage costs by printing Boardroom’s books [with a] softcover, thereby lowering the individual fulfillment package weight by approximately 1 pound,” indicates Epperson.
Agora also learned that depending on the volume of product, local fulfillment can be more cost effective, and, according to Epperson, it also can significantly decrease delivery time and improve customer service. Because the cost to print books in the United States and ship to customers in Australia was extremely high, Agora prints multiple titles of similar lengths and sizes together in Australia to gain print efficiencies, and mails through the local postal stream.
Mailing within the country greatly shortens delivery time. For the remainder of the world, Agora notes that delivery can take four to six weeks. Epperson feels it is important to be up front about delivery times to head off customer service calls.
So it can more accurately estimate a delivery time, Agora also provides e-mail notification when the product ships to those customers who give their e-mail addresses.
Demand for newsletter subscriptions is scattered around the rest of the world and doesn’t command as large a volume per individual country, so Agora prints and mails subscriptions from the United States.
To maximize postal discounts, worldwide distribution of newsletters are mailed using the services of a consolidator. A consolidator benefits mailers by commingling smaller mail volumes that don’t have the ability to meet a postal administration’s requirements for mail preparation discounts.
Newsletters headed north to Canada, which commands its biggest mail volume, are printed in the United States, trucked to the border and mailed using Canada Post’s Publication Mail service. However, it currently is investigating the possibility of using a distributor in Canada because of problems with shipments being held up at customs (because of premiums). In the meantime, Agora adheres a sticker to each fulfillment package indicating the goods and services tax (GST) already has been paid and includes Agora’s GST number.
The International Airline Passengers Association
The International Airline Passengers Association (IAPA) is a world travelers association that offers its 400,000 worldwide members a range of travel savings and benefits. Its members are business travelers and frequent fliers who pay U.S.$49 to U.S.$299 a year to take advantage of membership perks such as discounts on hotels and car rentals, travel insurance, a lost luggage retrieval system, and a loyalty program that allows members to build miles.
IAPA’s fulfillment operationis responsible for mailing its quarterly newsletter First Class, new membership and renewal kits, and an annual directory.
The newsletter is mailed four times a year to a circulation of 100,000 worldwide—not all members qualify to receive the newsletter.
According to Daniel Rutenberg, IAPA’s director of marketing, the eight-page newsletter is IAPA’s primary communication vehicle to members.
As such, it often includes as many as eight inserts, including a reply device encouraging members to provide updated and supplemental customer information. Also included in the package is a postcard for the customer to provide an opt-in e-mail address. The complete package mails in a 6 inch by 9 inch window envelope and weighs approximately 2 ounces.
IAPA’s newsletters currently are printed in Europe. Newsletters bound for the United States are mailed via direct entry and bear a U.S. indicia.
Rutenberg says it is important that indicias look domestic—particularly when mailing newsletters from Europe to members residing in the United States, saying that U.S. members respond “more favorably to a U.S. indicia.” For the rest of the world, he claims, the indicia doesn’t have as significant an effect on response.
The remainder of IAPA’s newsletters are presorted and mailed direct entry in Europe using both priority and standard services.
IAPA also prints and mails a hefty annual directory to its members. Mailed in a 4 inch by 10 inch rectangular envelope, the directory weighs approximately four or five ounces. Currently, IAPA also prints and mails the volume from Europe to points around the globe via direct entry, although it is investigating alternate delivery options for both its newsletters and directories.
To reduce delivery time, membership and renewal kits are mailed from one of IAPA’s three customer service centers in Dallas, Hong Kong and London, depending on the member’s geographic location.