What is Guaranteed DDP? | FlavorCloud

Two top concerns cross-border consumers have are high shipping costs and long delivery times. These worries are so important that customers often abandon their shopping carts. Merchants can easily address these concerns by offering DDP shipping. This gives your customers what they want—the best shipping costs, shortest delivery times, no surprises, and an excellent customer experience.

Customer experience is an essential element of ecommerce business success. According to Forbes, 74% of consumers are more likely to buy, spend more, and remain loyal customers because of a positive customer experience.

DDP shipping may address the top two consumer concerns, but it increases the burden and risk for merchants, because DDP means the merchant is responsible for all landed costs. These costs include the cost of goods sold, insurance fees, freight fees, customs duties, domestic and import taxes, overhead costs, brokerage fees, and shipping fees. Accurately estimating these is no easy task and merchants will receive additional bills from carriers or customs after the fact.

An easier solution is guaranteed DDP shipping through FlavorCloud. We accurately calculate complete landed costs, with savings due to custom clearance networks in each country, while providing the best-negotiated shipping services at heavily discounted rates for every route through our global carrier network. We offer a fully managed service that takes responsibility for automating the entire customs clearance process all the way to delivery at consumer door.

By integrating FlavorCloud into your shopping cart, you can increase international conversion rates. Our customers experience an average increase of 2x in conversion rate!

What is DDP?

Delivery Duty Paid (DDP) shipping is where the merchant takes responsibility for all landed costs (duties taxes and fees), and collects these charges upfront from consumers at time of purchase so the consumer never receives additional bills from customs or carriers at time of delivery. This involves the merchant classifying products accurately, calculating and collecting all shipping and customs related costs through delivery, including transport, export, and import duties, shipping insurance, VAT if applicable, and any additional fees. It also means navigating customs, potential shipment inspections, and bearing the risk of damaged goods costs or replacement.

Calculating and collecting shipping and customs charges then discounting or offsetting them during checkout is incredibly difficult. It involves correctly classifying a product, calculating duties and taxes based on country and commodity-specific rules, and discerning complex fee structures. So, there’s lots of room for error, potentially leading to unexpectedly increased costs after the package is shipped.

Guaranteed DDP through FlavorCloud is 99.9% accurate due to our customs clearance network and reliability, so there are no unexpected costs to the merchant or consumer after fulfillment and that parcels are expedited through our clearance network in each country.

How does Guaranteed DDP work?

Guaranteed DDP shipping is a managed service offered by FlavorCloud, where we take responsibility for your goods clearing customs. We accurately classify products, calculate landed costs at checkout and provide the best-negotiated shipping rates and routes through our global carrier network optimized for DDP.

With FlavorCloud, all shipping costs, fees, and taxes are correctly calculated at checkout when the customer completes their online purchase. This means costs are transparent for the customer, reducing cart abandonment rates while increasing conversions and revenue.

Guaranteed DDP ensures that landed costs served at the time of checkout and paid by the consumer are accurate, so they won’t receive any unexpected bills from customs or the carrier when the shipment is delivered. If for any reason the customer would receive such an invoice at the time of delivery, we request that they refuse to pay it and contact us to resolve the issue.

FlavorCloud automates the shipping process, including the classification of goods with the correct HS code and the creation and automation of invoices, labels, and customs documentation via the FlavorCloud Global Network. This enables the merchant to avoid costly errors and delays in customs clearance, so deliveries meet customer expectations.

Are shipping rates at checkout guaranteed?

No. Shipping rates and landed costs are guaranteed at time of fulfilment (shipment creation by warehouse). Guaranteed DDP through FlavorCloud helps merchants simplify the shipping process, but there are times when shipping rates at fulfillment may vary from those served at checkout. Keeping the following scenarios in mind enables the merchant to prevent and mitigate these discrepancies.

When do landed costs change at fulfillment?

FlavorCloud invoices the merchant for the same landed costs provided to the consumer at checkout at time of order fulfillment. The reasons charges to the merchant would differ include:

  • The order quantity or value change at the time of fulfillment. This can occur when an order content is changed, it is split, partially fulfilled, or short on inventory.
  • HS code updated.
  • Changes to the destination address.
  • Shipping charges changed at the time of fulfillment.

When do shipping rates differ at fulfilment?

FlavorCloud shipping rates are NOT guaranteed at checkout, but they ARE locked in at the time of fulfillment. In most cases, rates served to the consumer at checkout will match rates at fulfillment with the following exceptions:

  • Weight discrepancies between what is entered in-store versus scaled weight of packages provided at the time of fulfillment. To avoid this, we recommend that accurate weights be updated in-store with a buffer to prevent out of pocket expenses.
  • Package dimensional (DIM) weight is greater than actual weight. We recommend entering the greater of two at the SKU level to mitigate this scenario. FlavorCloud also can apply a weight correction factor over time to ensure it is within 5% on average across orders as we learn more.
  • Partial fulfilments, multi-box shipments, or split shipments.
  • All FlavorCloud rates are dynamic so carrier outages, route changes, or rate changes could result in different rates between the time the order is placed and when it is fulfilled.

Summary

Guaranteed DDP through FlavorCloud makes it easy for the merchant to address consumer concerns, increase cart conversions, and keep costs predictable. It removes the burden and risks to the merchant associated with managing DDP shipping on their own while leveraging the superior customer experience associated with this shipping strategy.

FlavorCloud is the only company that offers guaranteed DDP as a managed service worldwide, getting your customer’s package expedited through customs. It’s like TSA Pre-Check for packages!

Looking for an easy way to implement DDP on your ecommerce platform? Schedule a demo today to see how simple it is to get started.