It’s one thing to ship light t-shirts or phone cases in padded envelopes across borders. It’s a completely different challenge to build a profitable international growth engine when the products weigh twenty kilos, are bulky, and quickly eat up the entire margin with the slightest misstep.
During a panel discussion on complex logistics and international expansion, Lucas Wasniewski, CEO and founder of the training and recovery company Flowlife, and Anna Benson, CEO and founder of the garden and lifestyle brand Bybenson, met to share their lessons learned about selling heavy and bulky products globally.
Fast Expansion Beats Perfection
When the discussion was initiated by moderator Izabella Borowska regarding how to choose the right market and whether an English-language site is sufficient, both founders agreed that speed must take precedence over complexity in the early stages.
Bybenson, where 95 percent of the business is direct-to-consumer, works with so-called seed markets in English to measure organic demand. When the data shows that sales are picking up, the country is elevated to one of the company's eleven focus markets. Flowlife works similarly but also adapts its strategy based on where strong retailers or distributors appear.
According to Lucas Wasniewski, the biggest mistake many e-commerce businesses make is complicating the launch so much that it never happens.
Complexity is the biggest killer of growth and innovation. If you add more than you can handle, it will just be bad, you won't do it. Now there are simple ways to localize, so if you can do it, you absolutely should. If you can't do it, forget it. Just go with English to start with, says Lucas Wasniewski.
He recounts how a colleague recently launched Switzerland as a new market directly from an airplane. Because the colleague lacked internet access and did not have time to calculate exactly on duties and lower VAT, the prices in Swiss francs were set exactly one-to-one against the euro. By adding a little extra to the price, the margin was secured immediately without delaying the launch.
When you do choose to translate and localize a market, which, according to Anna Benson, has a significant effect in countries like France, Italy and Spain, it is important to go all the way in the entire customer journey.
If you start on a platform, you have to do it on all of them. If you run local Meta ads, but then end up on a site that is in English, then you have attracted those customers, warns Lucas Wasniewski, and receives support from Anna Benson:
It is important to really have control over what is communicated to the customer and that it is throughout the entire process. So that you don't end up on a site where every other email that goes through Shopify and via our email tool, one is in English and one is in Spanish, for example. That’s not so good.
The Customs Shock in Turkey and Rebuilt Wheelbarrows
When sales start to roll in on new markets, the operational logistics are put to the test. For Bybenson, expansion has not been entirely frictionless, and Anna Benson openly shares about when the company recently saw strong demand for their Nordic design products in Turkey.
We have just seen traction on Turkey which is a very exciting market for us. And there are of course various challenges in that regard, so that you can get through customs and so on. We hit the button on Meta and 50 orders immediately got stuck in customs. So there are of course certain things more than freight agreements, such as correct customs documents. We didn't have that, as I said, it was costly but a good lesson, says Anna Benson.
To make the calculation work for long-distance transport of bulky garden products, Bybenson has chosen to consolidate its volumes with a global logistics partner such as UPS to negotiate both freight rates and customs handling fees. But they have also been forced to rethink the product design itself.
Shipping goods to the other side of the globe is also an effective way for a seasonal gardening company to level out income throughout the year.
It’s tough if you're going to send a wheelbarrow to South Africa or Australia, it costs money. That’s also the challenge with these types of products if you have larger and bulkier items. We are redesigning our wheelbarrow so that it becomes a good e-commerce product, so that you can ship it in one package instead of on a pallet, so we can open up for something like Australia or the USA where we have a lot of demand, explains Anna Benson.
Difficult Countries Pay Best
The fact that some markets involve cumbersome administration, duties and logistical obstacles is not only negative. Lucas Wasniewski believes that the barriers themselves create an enormous competitive advantage for e-commerce businesses that actually bother to do their homework.
If it’s easy, everyone else will do it. The fact that it’s a little more difficult gives you a uniqueness. A lot of people can't be bothered to go into Turkey because it’s difficult, so if you do the whole job, there is great potential. I think you see the same in Norway and Denmark. Many choose Denmark because it’s easy, but if you talk to all e-commerce businesses, Denmark is often the worst market there is. They shop cheaply from Europe, and then Norway just lies there in its little coast and no one can be bothered to cross the fjords. There you always have very good results, he says.
In addition to the competition often being lower behind customs walls, there are clear financial incentives to leaving the Swedish home market. Lucas Wasniewski points out that revenues in euros act as a natural currency hedge when the Swedish krona weakens, especially for companies that purchase their goods in dollars. At the same time, Bybenson sees a significant difference in customers' purchasing power abroad.
This Average Order Value, we see it is almost twice as large on most markets outside of Sweden, even in Denmark, states Anna Benson.
The Key Metric That Decides Everything
At the end of the conversation, a question from the audience was raised about what concrete data points actually determine when a market is mature enough to scale up seriously without incurring costly mistakes.
For Bybenson, it’s about daring to go "all in" during a three-month test period with the entire marketing package once they see that basic demand exists, even if the very first orders to, for example, the USA are not always profitable on the bottom line.
For Flowlife with its heavy ice baths and training machines, the control ultimately boils down to a single central metric in unit economics.
We actually look at one thing primarily and that is Gross Margin 3 and Gross Profit 3, and that is then the margin after product cost, after delivery cost and marketing. How much do we have left then? And then we look at both in percentage so we know how efficient we are, and in volume, and those are the most important signals we look at. If we can both earn a lot of money and have good efficiency when we are there, then we invest extra, concludes Lucas Wasniewski.