The Two Faces of Amazon and a Lesson for Retailing Online to a Global Audience

Firstly, let me state clearly I LOVE AMAZON.COM! It is easy to use, has an inventory that rocks and a robust distribution network. A friend of mine in Germany recently sent me a great video (Berlin Calling) for the holidays using Amazon.de. The video appeared to have been shipped from Germany and arrived in a fairly timely manner.

International distribution is a very tricky area for most companies selling a physical product. Once you are beyond the issue of verifying the buyer’s payment the issue becomes “How do you get this item to the desired destination?” in a cost effective way.

About a year ago, I used Amazon.com to send a $20 book to a client in Brazil. The shipping costs ended up being over $60.00. To be clear, I was sending this to a business address in Sao Paulo and not to a more remote location like Florianopolis or Porto Alegre. A component of the high cost was due to the lack of use of international addressing capability for Brazil. As a result, the information I entered in the “ship to” section was more or less a free text field and it was not checked against any type of Brazilian address reference data.

The lesson to be learned here is that cost effective fulfillment of international orders can be accomplished with the judicious use of some basic address standardization technology, coupled to a good source of reference data. There are a number of vendors of different sizes and shapes; so, give this serious thought as you look to expand your growth internationally in 2012.

By the way, that book I sent to Brazil is called “The Business of Software.” It is a great read for those starting or managing a software company.