The benefit of using shipping consolidators to help navigate customs and restrictions will help keep them alive amid the availability of international shipping provided by many e-commerce sites.
Shipping consolidators, such as OneNow, Borderlinx and MyUS.com, allow customers to receive goods from online shops that do not provide international shipping. Customers use a local shipping address provided by the consolidator. The company then forwards the goods overseas to the customers. Most of the shipping consolidators allow customers to buy from multiple online shops, which they then repackage into one shipment to send to the customers.
For Anja Smith, web and marketing director at Sabai Technology which sells VPN routers online, shipping consolidators complement the company's international shipping service to customers.
"About 40 percent of our products are shipped internationally. We sell a product that helps users get around internet restrictions in their host country. We do a lot of shipping to China, the United Arab Emirates, Singapore, Mexico and Canada," he said, adding that the company has sold products to over 110 countries.
Even with international shipping, Smith said many of its customers use a shipping consolidator to avoid heavy scrutiny at customs. "Ecuador, for instance, is very difficult to get electronics through. So many of our customers use a consolidator to grease the wheels at customs as a [package, with multiple items inside,] attracts less attention," Smith said.
"We have had reports of some items not even being checked by customs when they come in through these [consolidation companies]," he added.
Users like cost savings of consolidators
For Therese Chan, a media coordinator in Singapore, shipping consolidators' delivery charges can sometimes be cheaper than the direct shipping provided by e-commerce stores.
She shared that the US$129 Pocket360 e-book reader which she bought from PocketBook, required an additional US$40 in international shipping fees. In contrast, her latest purchase--which she estimated was heavy--required only S$30 (S$24.4) when sent by a shipping consolidator.
Besides her own purchases, Chan said her friends can also split the shipping costs by combining their purchases into one package.
John Wright, vice president of shipping consolidation company MyUS.com, agreed that consolidating purchase from different e-commerce sites to one location and into one shipment makes it less expensive than having all shipments sent individually.
Wright played down the competition posed by international shipping services provided by e-commerce sites. "We see it as two different businesses. Our customers are buying from those same sites that offer international shipping and using us to consolidate shipments [compared with] having one shipment sent from the Web site," he said.
Bridget Kow, a PR professional in Singapore, uses consolidators for online stores that only ship to within the U.S.
She highlighted a lesson learnt from her first time using the service. "I did not realize they charged shipping by volumetric weight, I ended up paying for quite a bit of empty space in the box because I did not bother to pay for the service to repack them into a smaller package," Kow said.
While e-commerce sites have clear pricing plans of shipping charges, Wright said these stores often billed customers at the highest duty value-added taxes and exchange rates.
While shipping consolidators could find it hard to match online shops with free or cheaper shipping, Smith said trade restrictions between countries give consolidators an advantage.
"Whether they will be able to continue to fly under the radar on some of these restricted products is another matter. I think they depend on a high volume of other products that aren't restricted," he said.