Logistic and payment schemes


Goods delivery to the customers is one of the main issues of distance selling project arrangement and today there are 2 schemes of running business in Ukraine: direct import and consignment[1] that have own pros and cons main of which are stated in the table below.

Table 1. Logistic schemes of direct import and consignment comparison

Type of delivery

Advantages

Disadvantages

1

2

3

Direct import Rapid delivery over Ukraine (1-7 days) Necessity:

  •   to make certification of each product group;
  •   to receive a permission for the importation of goods;
  •   to pay customs duties and VAT (20%).
Consignment
  •   No certification (exceptions: goods for children, cosmetics, BAA and personal hygiene means);
  •   No customs duties and VAT (20%) payments when parcel’s value is up to 300 Euro.
  •   No legal entity and warehouse facilities development in Ukraine are needed.
Longer delivery time to the final consumer (15-30   days)

 

Lately consignment delivery could be done only by Ukrainian State Enterprise of Post “Ukrposhta” (it has contracts with postal operators of Slovakia, Czech, Finland and Germany) but today a number of private contractors appeared and they are ready to offer such services with more flexibility.

In Ukraine there are 3 main ways of order payments: cash on delivery (COD), via bank card and interbank money transmission.

Last two methods are usually used by “pure” Internet shops in big cities but 95-97% of goods are being sold on COD terms as online payment systems in Ukraine are only on developing stage and for consumers who live in small localities post office is almost the only convenient way of order receipt and payment. However, with payment systems development customers’ trust to this way of paying constantly grows. In Ukraine there is a general trend of payment via payment terminals and credit or debit cards role progressive increase. Further it will help distance selling companies to establish order payment processes with less expenses and better implementation timing.

It should be noted that Ukrainian consumer is ready to pay service fee for order payment transfer to a sender. This fee amount depends on the chosen way of payment. For example, if paying via bank card it is on average around 1-5% of the sum (depending on internal bank ratings percentage differs) then postal operator service fee for COD depends on logistics operator tariffs. Private enterprises have more flexible structure and often, depending on project parameters, are ready to offer special rates for a particular company. Meanwhile USEP “Ukrposhta” has fixed tariffs which are as follows:

  • Up to 500 UAH – 6% of the transferred amount;
  • From 500 to 1 000 UAH – 5% of the transferred amount;
  • More than 1 000 UAH – 4% of the transferred amount.

If we talk about money return in Ukraine it is carried out mainly through postal money transfer. Service fee is usually paid by a company which sends money. Average rates for money transfer of USEP “Ukrposhta” depending on the amount are as follows:

  • Up to 500 UAH – 4% of the transferred amount but not less than 5 UAH;
  • From 500 to 1 000 UAH – 2% of the transferred amount;
  • More than 1 000 UAH – 1,2% of the transferred amount.

A rather low threshold of the Ukrainian market entering is worth noting. There is a well-established scheme of cross-border sales and companies which specialize on mail order business services are operating on the market and if the technical preparations are done they can launch the project only in 2-3 months.

If using consignment scheme the cost of market entering can vary in the range of 50 000 (a small project) – 200 000 Euro (an average project). The amount of investments in project launching will directly depend on campaign’s size and the way of doing business which will choose distance selling company. It can include next costs: 3rd party consulting, advertising materials adaptation, creation of Ukrainian/Russian language copy from the foreign web page (if any), organization and training of CC stuff, advertising campaign and etc.

Payback period depends on the size of advertising campaign and pricing policies. Thus if the response rate will be about 0,7% with an average order value 500 UAH  payback period will be less than a year.

Quelle: www.uadm.com.ua

Foto “head”: Wilhelmine Wulff – www.pixelio.de

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Ukrainian Direct Marketing Association — non-profit organization, which protects and supports interests of its members, doing its best to develop the innovative and direct marketing industry, call centre activities and distance selling http://uadm.com.ua

 

 

Pressemitteilung veröffentlicht am 26.10.2012 in Dies + Das, News (In- und Ausland).