As the U.S. economy continues to remain soft, many companies have turned their focus on expanding globally. This is primarily due to the fact that off shore business is an untapped market for many companies.  According to Forester Research, 25% of U.S. web traffic comes from international shoppers, but the actual orders from these shoppers are only 4% of total U.S. web sales. Global expansion can often be a complex and challenging project for companies, which is why they focus on solidifying their domestic business first before they look to expand overseas.   Here are four key areas to think about as you focus on expanding globally and improving the off shore shopping experience for your customers:

Fully-landed cost for shoppers- This allows the off shore shopper to see the “total” cost—including retail price of the product, customs duties, local taxes and transportation charges—prior to submitting the order. It ensures a better customer experience and increases customer loyalty.

Purchasing in the consumers’ own currency- This also ensures a better customer experience as the company instead of the end consumer assumes the risk of currency exchange and the fraud risk.

Export and Import Regulatory Compliance- One of the complexities of Global business is dealing with Customs Compliance and all the rules and regulations that exist. The regulations change depending on what country you are exporting to as well as the type of products you are exporting. Companies normally outsource compliance to a 3rd party company or slowly build their own compliance department.

Global Returns Management- Something to think about is how you will handle return as it can be very costly when you return products back into the U.S? Again, there are some rules and regulations enforced by customs depending on the country and product being returned.

More than ever before online retailers are using free shipping as a marketing tool to increase revenues. As a result many companies are feeling the pressure to offer free shipping to their customers which may or may not be a good idea.  In order to understand whether it makes since for you, we must first understand why it’s offered to begin with.  To be completely blunt, it is offered because it works and the #’s back it up. In a recent comScore report, three-fourths of consumers surveyed said they abandon retailers at checkout if shipping isn’t free.

Here are four key ways to understand this fast growing free-shipping trend:

1.  The importance of free shipping is growing.  ComScore reports that free shipping accounted for an incremental 6 points of all transactions in 2009. As more companies are offering it, the pressure to compete intensifies. 

2.  Shipping costs are the most common reason for shopping cart abandonment.  Many times consumers don’t understand the true cost of getting their products shipped to them, and as a result shipping becomes a weak link in the check out process. Forrester Reseach surveyed online shoppers and found that Forty-four percent balked at the price of shipping and abandoned their shopping cart.

3.  Customers tend to spend more when they receive free shipping.  Amazon.com is a great example of a company that has proven this is indeed true. They have been quite successful in getting their customers to purchase one more item in order to hit the free shipping threshold. A comScore survey of Holiday (4th quarter) spending in 2010 showed that the avg. order on free-shipping purchases was $110, compared with $95 for non-free shipping purchases. Now this may not seem like a big difference but the numbers start adding up fast!

4.  Free shipping boost sales when offered as a special.  Stamps.com put out a survey of online retailers in October of 2010 and found that 64% stated that “some type of free shipping promotion” with or without a minimum spend is the most effective promotion they can offer to drive sales during the Holiday season.

From the online retailer’s perspective there really is no such thing as free shipping.  Large online retailers such as Amazon.com or LL Bean can absorb the added cost due to the economies of scale they have.  If you are not a large behemoth of a retailer, how can you survive?  Many smaller retailers understand that people will buy more if they offer free shipping, but they can’t afford to absorb all of the shipping costs and never pass any of them along to the customer.  The good news is that with free shipping comes options.  Actually, offering free shipping on every order all the time is the exception rather than the rule.

Here are six alternatives to offering free shipping all the time:

1.  Flat rate. Many companies set up thresholds where if you exceed that threshold the shipping is free and below the threshold it is a flat rate. Macy’s ships all online orders of $99 or more for free. For order that fall below, they charge an $8 flat fee.  In addition, companies that offer flat-rate shipping typically send those orders via ground delivery to keep their costs under control.

2.  Shipping club.  Many retailers offer customers the option of paying a one-time fee in order to receive free shipping or faster shipping. Amazon was the first to use this strategy but now other companies have caught on.

3.  Optional upgrades. Online retailers are giving their customers the option to upgrade to a faster service for a fee which is usually between $3-$6 unless it is a large shipment.  This allows the retailers to set the proper expectations in terms of delivery times and also gives decision making power to their customers, which is always a good idea.

4.  Free shipping for minimum purchase. Many retailers now provide free shipping with a minimum purchase. This is becoming much more popular in the ecommerce industry.

5.  Free shipping on eligible products.  This option is often offered with products with higher profit margins or on products that a retailer wants to promote. 

6.  Free shipping for a limited time.  A survey by the E-Tailing Group found that nearly 9 out of 10 online retailers offered some form of free shipping during the holiday season last year. Free shipping also works well to help move more products that are out of season.