Season 1, Episode 32

Simplifying International Freight with Rael Lowethal from Zee

International logistics can be complicated at the best of times. Add global supply chain disruptions and an increased demand for ecommerce, and you’re likely facing delayed shipments and extra demand to get your inventory where it needs to be. We spoke to Rael Lowethal from Zee about what sellers can do to streamline moving their products internationally.

 

Show Notes

Transcript

[00:00:07] Chris: Hi everybody, welcome back to Seller Performance Solutions. I’m Chris McCabe. I’m here with Leah McHugh of e-commerce Chris. We are here today with Rael of Zee to talk about issues sellers are facing with supply chain and import/export. Before we get into, you know, the straightforward stuff, the top two tips you’d have for sellers dealing with logistics problems right now, can you give us just kind of a brief summary of who you are and what you do?

[00:00:41] Rael: 
Perfectly. So my name is Rael.

I am the head of sales and client success at Zee. We’re importer of record specialists and we have a value-added logistics solution for e-commerce sellers. So it’s essentially our main value-add to e-commerce sellers is to assist those who are looking to expand into a marketplace outside of their local market.

We do this by providing a local entity with a physical presence in that destination country to take on the customs responsibility of that import. And then as a value-add, we can also arrange the international and local delivery of the inventory as well.

[00:01:17] Chris: And the order of the day, what everyone wants to know is how they should manage supply chain differently. Not just because it’s Q4, but because even into 2022, there’ll be additional logistics hurdles. We talked to a lot of Amazon sellers that have this problem, of course, sellers in e-commerce everywhere, experiencing a lot of the same supply chain hurdles.

So what would be your two main tips that you would give people in terms of preparing, not just for the rest of this year, there’s only so much they can do between now and the end of 2021, but really at this point preparing for next year?

[00:01:52] Rael: So it’s a great question. I think if anybody had the clear cuts that would solve this problem, I think that person would be doing really, really well, but in our experience e-commerce sellers are experiencing an incredible supply chain issue when it comes to freight forwarding, especially when it comes to sea freight, obtaining containers, getting pallets, getting a space on a boat, then the delays with the boats it’s made Q4 inventory planning really difficult.

We can solve that issue really well through our air freight solution and then everybody comes back and says, Hey, but air freight is a lot more expensive than sea freight. It is, in our case because of the volume of shipments that we’re doing on an annual basis, we have really discounted rates with our providers and we pass that on to our clients.

It will always be more expensive. There’s no doubt about that. But at least we have discounted rates, which make it a little bit easier. And then obviously air freight is a lot more efficient in terms of getting your goods directly to the facility in a quicker way then sea freight and then the obvious second tip is just inventory planning. , when it comes down to managing supply chain, especially over this busy period, monitor your sales, monitor your inventory levels. If you’re having emergency shipments, rather get them there, even if it’s at a lower margin, you’d rather have the additional sales not lose out on inventory stock limits, and especially, don’t get your seller accounts suspended, which we know you guys can really assist in resolving if that does happen.

[00:03:12] Chris: For sure. Also there’s a cost associated with air freight versus sea freight, but there’s also a cost associated with having your sea freight sitting somewhere, not clearing customs for awhile and just sitting on a container ship somewhere.

[00:03:26] Rael: Absolutely.

[00:03:27] Chris: What are the customs clearance times that you’re seeing now, are they steadily getting better? When let’s say Amazon sellers approached you about wanting help with some of these issues, what do you say about how long it takes items to clear customs and how you can help with that?

[00:03:43] Rael: So that’s a great question. I think the speed at which a shipment gets customs cleared is truly dependent on how well the customs documentation is drawn up and prepared. A big part of our service offering is to do that on behalf of our clients and also to have established relationships and business partnerships with customs brokers in whichever country, the goods are actually getting cleared in.

So when we prepare all the documentation in the appropriate manner and submitted to our broker partners, our customs clearance, is generally between one and three business days. That can be extended if customs decided to just inspect the goods, obviously that’s out of our control. But the main thing that really would delay a customs clearance is the preparation of customs documentation.

The truth is. Our experience since Brexit, most people gave up trying to get their goods into the EU actually because of the complexities around it.

Yeah. So at the beginning there was this huge influx of how do I do this? How do I do this? And there aren’t a lot of providers out there that can actually assist with EU and UK import requirements. We, I believe have made that process really simple and easy by providing the infrastructure that we do.

[00:04:56] Leah:
 Yeah, I think anybody that’s dealt with the importation process knows how many moving parts there are. And so adding on top of that changes to regulations and not very clear changes to regulations. It makes it pretty difficult to do.

I’ve dealt with shipments where the shipments going into the UK, but the shipments coming from China, I was in Australia, our main warehouse was in the US, so you’re dealing with four different times zones, possibly six different entities just to get one shipment. So it certainly is a lot easier when you do work with a provider who has people in those time zones and who’s doing it on a regular basis.

[00:05:31] Rael: I think you bring up a very important point that there can be five or six different providers in one international transaction. What we’ve done is really simplify the supply chain by giving you one person to speak to that coordinated across the different providers in an international sea freight or air freight transaction.

[00:05:47] Leah: 
Right, exactly. And it helps speed things up because you’re not waiting for the next time zone to be available in order to get the next step of the process done.

[00:05:57] Rael:
 Absolutely.

[00:05:58] Chris: Do you find that new e-commerce businesses, it even could be somebody who only sells on Amazon, but let’s just say a new e-commerce business is prepared? Do you have to handhold them through the whole way?

[00:06:10] Rael: So I think what Amazon sellers or e-commerce sellers know is their product. They know how many of their product fits into a particular box and into a particular pallet, and that’s really the information we need in order to do the service we do once we have that information it’s actually our job to coordinate all the documentation and everything that’s needed, and then come back to the client with any additional requests or anything else that that might be required of them. They’re their main focus is sale of their product. Our focus is simplifying importing and logistics for them.

I think a lot of their time and focus is taken away from the sale of their inventory when they try putting all these moving parts together. Trying to coordinate six different parties in four different times. And it just takes you away from your Amazon PPC, from your storage limits, from your branding, from all of the things that you actually already should be focusing on to drive the growth in your business.

[00:07:06] Chris: Yeah, we’re definitely used to sellers who are distracted by troubleshooting problems with Amazon, or sometimes with each other or with buyers, having that take them away from revenue growth and marketing and sales generation.

[00:07:19] Rael: I think that’s why a lot of these service businesses actually have evolved in this ecosystem. It’s because there is a lot of complexity in cross-border e-commerce.

[00:07:27] Leah: Do you find a lot of your clients are using you for more than one marketplace? Are most of your clients shipping to multiple locations with you guys?

[00:07:35] Rael: So I think that’s actually really the thing that we try and put across to the market is that.

So, if you’re looking at one particular market marketplace, great, we can get you there, but actually we can get you into eight or nine. It really depends on their appetite for global growth. We’ve seen a lot of success in clients who had six or seven different providers, they found Zee and then they have one person they speak to for six or seven different destinations. And that really is a simplification of the supply chain. And they get to save on their inventory, transportation costs because of the discounted rates that we get with our providers.

[00:08:09] Leah: You had mentioned in a previous conversation that you can help with things like EU VAT registration, which I know is something that a lot of people get stuck on or it takes a long time to get processed.

[00:08:19] Rael: 
Yeah. And I think the VAT registrations is an interesting one because Amazon have white labeled a couple of providers out there and pushed their pricing down to virtually nothing to get it done.

We know that ultimately at the end of the day, an Amazon sale and e-commerce seller is looking at the bottom line, what’s their margin. And if they can save costs, they’ll do it. The truth is, at the other end of the spectrum, the client servers that you get from those providers, because the pricing has been pushed down so much and because there’s so much volume, it’s not quite there.

So generally the requests come after they’ve already actually been able to get the VAT registration because Amazon have made it really easy and cheap, but then the client service for subsequent filings is where the friction comes in. And we have a sister company within our group that can really assist with that.

[00:09:08] Chris: Have you talked to a lot of Amazon sellers, especially who are confused about what FBA is now and they’re scared of what it is or what it can or can’t do? Do you get into a lot of conversations about the limits of FBA or being the importer of record and how that relates to FBA? Do people get confused about that? Do they back away from FBA?

[00:09:29] Rael: 
So actually quite the opposite. We speak to clients all the time that really see the opportunity in FBA. But they’re just not quite sure how to navigate it. How import of of record fits into FBA is, you know, Amazon will really help you with a variety of things.

They’ll help you with logistics. They’ll help you with the VAT, t hey’ll help you with advertising, a lot of different sort of services that you need to run your e-commerce business. The one thing that they won’t help you with, whether you’re a vendor or an FBA seller, is to take on the customer’s responsibility for imports as a foreign importer.

And they make it quite explicit that they won’t do that. We are specialists in customs compliance and import of record. And then, like I said, we can offer a value added logistics solution at discounted rates to make sure that it becomes an end to end solution.

There are sellers out there that don’t want to use air freight, their products don’t match it, or they want to send bulk shipments. That’s really not a problem. There are multiple freight forwarder’s out there that will do deliveries to FBA centers globally.

We will work with their chosen provider. You know, give them the versatility that they’re looking for. Once the goods arrive step in and make sure that they clear customs successfully and then can get delivered to an Amazon facility or a retail facility, just depending on the specific needs.

[00:10:43] Leah: 
How does the importer of record work in terms of product liability and product compliance? Because I know a lot of that is based on who is the importer of record.

[00:10:52] Rael: That’s a great question. So we do take on product liability, if the products injure anyone in country, if they are counterfeit products, if they don’t comply with local laws and regulations, the whole point of having an importer of record is for the local customs office to have a local e ntity or people in that country to hold responsible for that, you know, the growth of e-commerce has really required this because you now have millions of foreign importers trying to get into all of these different countries and customs officers are trying to simplify their own supply chain by having a local person or a local entity that they can hold responsible and liable for it. So that’s the responsibility we take on. That includes a responsibility for audit with the local customs office. And because we take on that responsibility and liability we really have a great way of assisting clients in getting their products fully compliant with that local country. So we don’t do the product compliance ourselves, but we’ll identify what’s needed and then we can point the seller in the right direction to go and obtain it. And then once they have, we are ready to import for them.

[00:11:54] Leah: I think that’s an area that is very hard to navigate for, particularly an Amazon seller, because they are vastly different in different countries and for different products. We often find, even just between the US and Canada, people just send it to Canada, not realizing that the rules in Canada are completely different for that product and only realize it’s a problem when they get in trouble.

So having somebody assist in navigating that I think is really useful for a lot of sellers, particularly with things like topical products or health products that are just a little bit more complex on an international scale.

[00:12:28] Chris: And it’s a lot of responsibility you’re taking on. I like how you kept saying we take responsibility for A and for B and for C, anytime you’re taking a lot of important responsibility on, I think people appreciate it. That’s something Leah and I know from our daily work as well.

[00:12:43] Rael:
 They do, I think we got a lot of positive client feedback. We do take on a lot of responsibility, but we’ve packaged the service in a way that makes it very simple for the client. So, if you’ve got a successful product in a particular market and your margins are where they should be, there’s no reason why you shouldn’t be successful in another market, but like you say, navigating the complexities of a different market is very difficult. And that’s really the process that we’re simplifying for these sellers.

[00:13:11] Chris: 
Great. So where can people reach you to learn more about the wonderful world of Zee?

[00:13:17] Rael: So there’s one of two ways they can go on to zee.co, which is our website.

They’ll get a full overview of our services. If they really are interested in expanding globally they’re more than welcome to contact me. My email address is [email protected], that’s [email protected] And then I’ll pass them onto one of our expert consultants who will guide them through the process and see if we can service them.

[00:13:44] Leah: Awesome. Thank you so much. I think this is especially a good time for this. So thank you so much for joining us today.

[00:13:49] Chris: Yeah, very informative. And I’m sure we’ll revisit a lot of these same topics in 2022..

[00:13:54] Rael: Absolutely. And thank you so much for having me on it was a great chat.

[00:13:58] Chris: Terrific. Thank you.

Hosts & Guests

Chris McCabe

Leah McHugh

Rael Lowethal

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