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4. Build-out of standalone Canadian-based operating capability.

This approach will most likely require the longest lead time and the highest cost to deploy. As a result, it is usually limited to major Canadian expansion efforts, in particular with retailers that already possess some assets or experience within the Canadian market. Also, European and Asian retailers would be more likely to set up inside Canada as a result of the inbound transportation costs associated with parcel delivery to the customer. The retailer should expect to incur major capital outlays at launch and for several years down the road. Further, given the level of complexity of the deployment, the retailer should assume a 12-month lead time at a minimum.

  • 5.

    Development of a hybrid solution through a combination of several options. It is often the case that the retailer will employ individual components of several op- tions to build its Canadian solution. Some of the more common variations include the following:

    • -

      Outsourcing fulfillment activities to multiple third-party suppliers, each with a specific operating specialty, such as tele-services and fulfillment;

    • -

      Employment of a third-party supplier to provide one or more of the operating functions with the retailer retaining responsibility for the remaining activities; and

    • -

      Joint venture with another online retailer or fulfillment supplier in which the retailer might invest in the development of a new facility and/or share in the operating costs of an existing one.

Depending on which option is employed, the retailer will typically have more direct control over its operations and service deliverables than a “pure” outsourced solu- tion. In addition, the one-time costs should be lower than the in-country option and the ongoing operating costs should be marginally lower than a fully outsourced solution.

Once the various options have been identified, the retailer must evaluate the attendant costs, risks, potential return, execution feasibility, and fit of each option within the retailer’s long-term vision for the enterprise.

The implementation of an international shipping solution demands extremely close management by the retailer given the critical nature and overall complexity of the endeavor; the significant costs involved; and, the potential risk to the brand resulting from a less-than-successful implementation.

As a first step in the process, the retailer should prepare a detailed Statement of Work (SOW) for the undertaking once the operating approach has been determined. Depending on the approach that is taken, the SOW should at a minimum include the following:

  • Method of handling the various customer service, fulfillment, systems, and trans- portation activities;

  • Operating considerations such as service, staffing, and general system and equip- ment specifications;

  • Enhancements to the Web platform and the order-management application;

Visa e-commerce cross-border handbook for U.S. retailers

Copyright 2010 Visa. All rights reserved.


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