How to Start Selling Internationally with Passport Shipping | EP. #110
Going global is becoming increasingly important for businesses looking to expand beyond their local markets. On this 110th episode of The E-Comm Show, Andrew interviews Alex Yancher, Co-founder and CEO of Passport Shipping – a revolutionary shipping platform that helps businesses start selling internationally.
In this episode, Tim will talk about the challenges and opportunities that come with selling cross-border, how to pick the right international markets, and what you need to know about Amazon and Shopify fulfillment services. Don't miss this episode if you want to learn more about going global!
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Andrew Maff and Alex Yancher
Alex Yancher is an accomplished entrepreneur and business leader, currently serving as the Co-Founder and CEO of Passport. With expertise in technology, finance, and management, he has been instrumental in the growth and success of various ventures. Prior to founding Passport, Alex held key positions such as Chief Operating Officer at Pantry, where he revolutionized fresh food retail. As the COO of Lynks.com, he positioned the company as a prominent platform for consumers in emerging markets to access US products. Alex has also held finance roles at companies like Facebook and Morgan Stanley. He also actively advises and invests in startups, offering strategic guidance and support. Alex started Passport in 2017. Since then, the company has achieved substantial success, currently boasting over 1,000 customers and partners focused on direct-to-consumer international shipping.
Andrew Maff 00:11
Hello everyone and welcome to another episode of The E-Comm Show. I'm your host Andrew Maff. And today I'm joined by the amazing Alex Yancher founder of Passport Shipping. Alex, how you doing? Ready for a good show?
Alex Yancher 01:17
I am. Let's do it.
Andrew Maff 01:18
I'm so excited that we got this one to work. Spoiler alert. We had technical difficulties tried this before it didn't work out. We're here today. That's all that matters. Alex, thank you so much for joining us. I'm sure as you know, I like doing the stereotypical thing. Pretend that no one knows who you are. No one knows anything about passport and tell us a bit about your background about passport. We'll take him there. Okay.
Alex Yancher 01:38
Yeah, let's do it. Let's do it. So, yeah, I'm the co founder CEO of Passport. We handle international shipping in all the accompanying annoying things that come alongside and international shipping like duty and tax calculation, and all those things. And we offer it to ecommerce merchants and make it really easy for them to go global. So we work with about 1000 merchants today, about 103 Pls that serve the DTC world today. My background before starting passport, I actually used to run ops at a personal shopping service that helped people abroad buy products from the US. And it was my job to figure out a lot of the logistics, how do you get a package Big or small, cheaper, expensive all over the world. And it was quite the challenge. So it at the time, you could work with some of the well known branded carriers. Or as I figured out while running that company, you can actually go and book cargo space on say a Turkish Airways flight to Dubai, and then plug into a last mile network in Dubai and deliver that package. So ended up leaving that company with this idea that you can build a really amazing asset light international shipping carrier from the ground up built specifically for E commerce merchants. On the this sort of proliferation of last mile carriers that have been popping up all over the world, some amazing companies and are starting to take share from local posts and the brain of carriers as well as a proliferation of everything in the middle like the air freight providers, the middle mile trucking companies, all of that there's just so much innovation happening in the logistics world to serve this burgeoning e commerce business. So thought, you know, international parcel shipping, it's going to be big. So left, left, the personal shopping service started passport, back in 2017. So almost six years or six, six plus years at this point, going into year seven and here we are.
Andrew Maff 03:58
Wow. So effectively, you're assisting with E commerce sellers to be able to start to Shell sell overseas, and it's basically by renting space and what is it basically like commercial airliners, right?
Alex Yancher 04:13
That's a component. The commercial airline piece is a component of what we do to a merchant, we look just like say DHL, and we pick up their packages and we handle that delivery end to end.
Andrew Maff 04:27
Oh, beautiful. So one of the immediate questions I think of because I've had a few conversations with people on the show that helps sellers with you know, different aspects of selling globally. It is a logistical and tax and like finance, just nightmare trying to figure that out. At what point do you usually see like for a specific merchant that like okay, you're at a good point where you should probably consider starting to sell international or is it nowhere near as complicated as it once was?
Alex Yancher 05:01
You know, it's a great question. I always I always start with with this. How much of your traffic as a brand, if I'm thinking about from a brand's perspective, how much of your traffic, your traffic is coming from outside of the US. And it's a noble thing, you can go to similar web put in your URL, I can go check a brand, right? And I'll show you a breakdown of where your traffic is coming from where what's your top of funnel? And I've never seen anything less than call it 15% of traffic coming from outside of the US. Okay, be it Canada being Australia, so English speaking countries. And of course, there's, you know, 200 plus countries of people from all over the world are going on these brands sites, in some cases, when the brand is has the backing of an influencer, like a YouTuber or a celebrity sponsor, something like that. I mean, it's like flipped, it's like 85% of your traffic is coming from outside of the US. Because it makes sense. You know, if you look at the the usage of Instagram, I want to say something like 80% of Instagram users are outside the US 90% of TikTok users are outside of the US, right? So even the fact that you're asking the question, at what point? Does it does international start making sense? You know, it's a kind of like to flip the script on that a little bit. Because to some merchants, actually, the question maybe should be, at what point should you start focusing on the US. And really, you should be building and focusing all your efforts on outside of the US because 85% of your traffic is coming from there. And what you really want to see is like parity in the conversion rate, and in the orders that you get, again, you never really see that that's the problem with international is that there's so many friction points, like shipping, like customer support, like duty and tax calculation, regulatory compliance, all of these things that come together, and they do create headaches, and you never really see, oh, 10% of my traffic is coming from abroad. 10% of my sales are coming from abroad, it's not like that. It's like 10% of my sales, my my traffic is coming from abroad, 5% of my sales are coming from, from outside of the US because of these friction points that exist. So there's company so there's passport, we have competitors, of course, really, really good competitors that are also doing a really good job telling the story of the untapped potential of international. And some platforms, like Shopify obviously has their Shopify markets solution. And they also have built deeply into the platform, some internationalization features. So I would say like 15 years ago, or even 10 years ago, he was really complicated. Now, it's just kind of complicated. And there's companies like passport that really are the easy button for not having to worry about any of these regulatory compliance things. And we just happen to handle at passport really every size merchant. So we have a turnkey Shopify app, or somebody can just use that. And I would say, even if you're just starting out, and you're getting two orders a day, why not? Why not? You'll get a third one potentially from Canada. You know, why close the door on Canada? Especially if there's an easy button for it? And then certainly, it makes sense for the bigger ones. And frankly, speaking, you don't really see any of the bigger ones. I call it the Shopify Plus merchants, so 10 plus million in sales, let's say, I rarely come across one that doesn't do any international anymore.
Andrew Maff 08:59
Yeah. So is the is the concept really, the it's the best scenario for someone to prove the viability in other countries? Or is this like an end all be all because I would imagine if, like, let's say, I'm a US seller, and I do a ton of business in the UK. At a certain point, I'm gonna probably say like, let's just put a three PL in the UK and set that up. At what point do you say like, Hey, you might want to just keep inventory in this country or is there also something I'm missing there in terms of how that works?
Alex Yancher 09:33
Yeah, that's definitely a very viable strategy of domicile ing inventory in places around the world. UK for example, of course, like you could put something in in Europe and handle Europe. Lat am, of course, it's a viable strategy we've seen only company He's really of the magnitude as Nike. You know, Nike, of course does that, you know, and you don't need to be that big. But it just takes so much bandwidth to move your inventory all over the world in manage all of the local regulations and tax obligations. And you also have to divvy up your inventory. So there's some meaningful considerations before pursuing a strategy like that, but, of course, there are some major perks to it as well, such as you have your inventory closer to customers. And sometimes shipping could be a little bit cheaper. But when you really add up the freight to the country, plus the you know, the last mile, it ends up being kind of a wash, but the transit time is faster, because your your your products are closer to the customer. So it's up to each brain to see where they're at what the priorities are, and figure out if you know, the juice is worth the squeeze on this particular one.
Andrew Maff 11:10
What about if I mean, I imagine if a majority of your marketing efforts are, let's say US based and you want to start sampling International? Is this one of those situations where you're like, hey, put it in place. And then as you start to get those international orders, when you start to pivot your marketing into those different countries, then you've got the ability to start shipping, because I know your example is like, hey, you know, look at similar web and see where you're getting traffic. That's definitely one way to tell. But because they weren't able to convert before be kind of rough to figure out like, are they actually going to convert? So if you're really going to start to pivot that way, this would imagine be one of the best things to put in place to start to prove out the viability All right.
Alex Yancher 11:49
Totally, totally. You want to be able to test in the lowest investment sort of way possible. Yeah. And like a turnkey solution is definitely the way to go.
Andrew Maff 12:03
Right before we started the episode, you mentioned we were getting into it a little bit. And I was like, Yeah, let's leave this for the episode. But what uh, so you said there was some news going on within the industry? Correct?
Alex Yancher 12:13
Yeah, yeah. Some big news. Right after we hung up recall last last week about Ryan Peterson coming back to be CEO of Flexport.
Andrew Maff 12:26
Really, so what does that mean for for obviously, passport and just the industry as a whole?
Alex Yancher 12:34
Yeah, it's a great question. Let me caveat. Flexport is a small investor in passport. So I'll try to be objective, but I think very highly of Ryan, and in a Flexport. They also have a very strong alignment with Shopify. I think I saw Shopify own 17% or something like that a Flexport 13%, of which I believe came via the deliver acquisition. So yeah, I mean, I think that that Flexport Shopify alignment is what the industry has considered in the past as the sort of non Amazon DTC version of the of the sort of competing, top of funnel to supply chain stack, that sort of combined part of the value chains, Amazon, of course, it's all under one hood. Shopify kind of tried to do that with deliver and Shopify fulfillment network, and then transfer that to a very close partner of which they own almost 20% Flexport, which operates the three PL now and it has some of their own shipping services. So it'll be interesting to see how that how that all pans out. My understanding was that Dave Clark was actually going down the same strategy of building this competing, combined value chain plus top of funnel solutions, Amazon. So I think, you know, there, whatever disagreements they had, I don't think it was about that core strategic initiative for the Flexport Shopify alignment. But again, it'll be really interesting to see what happens now.
Andrew Maff 14:33
What's your theory on where that's going to go? Because obviously, even from a fulfillment perspective, like everything is starting to kind of cross pollinate a little bit as you've seen, you know, Amazon has done this big push on the Buy with prime thing. We're obviously that's fulfilling out of FBA. Shopify seems to be loving it simply because they're now integrating it into checkout and all that stuff. Like What's your theory on where this is? All going to shake out? Are we going to start to see just these massive conglomerates fulfilling, you know, ecommerce orders or we're going to continue to see, you know, kind of just smaller shops and last mile guys kind of solidify everything.
Alex Yancher 15:15
Very good question, Andrew. Very good question. It was actually very interesting to see that essentially a week before, I think it's a coincidence. I don't think that there's any connection to this. But still interesting coincidence, that the week before Dave Clark, who is x, Amazon, Shopify, announces that they're allowing amazon prime to be on their site, which is kind of like the whole thing around Shopify promise. And for your listeners who aren't aware of what Shopify promises, it's supposed to be kind of like Amazon Prime, which is this symbol, Shopify promise. It's like logo ties, it's meant to represent a promise, hence the name of a ship a fast shipping speed. I actually don't know the details, is it two days at one day, but it's something good. And they started by putting that, that branding that logo on to merchants sites that use Shopify fulfillment network. So you see how everything is interconnected there. And now that Shopify fulfillment network is Flexport. I don't know this for a fact. But presumably, that offer still stands for the Flexport. Merchants now, now known as Flexport, that fulfill from Flexport because of the Shopify tie up, and they would get that Shopify promise thing. So why does the merchant even want that? What's the point of shelf? I promise? Well, the theory is, if a merchant, if a buyer sees that they get their anxiety around the delivery reduced, and they're more likely to convert, I buy it. I think that that makes sense. That's the power of Amazon Prime, of course. In Shopify, again, similar to my point about the D to C version of Amazon flex port plus Shopify, this was another element of it. This manifests itself in a very valuable thing for for merchants, which is a higher conversion rate in the form of this like Amazon Prime, but DTC version, so Shopify promise, but right. So now what, now what now are you gonna have two buttons on this thing? Maybe? Is that so crazy that you can have two buttons? You know, there's like 10 buttons for payments. And Amazon is one of them. Shop pay is one of them Pay Pal is one of them. I mean, you know, Google, Facebook, and Apple, of course, very big players are chopping up this payment thing. And if that works, why it couldn't really work for shipping. So I wouldn't be surprised if frankly, speaking, there was a third and a fourth one that also had their own version of promise. I know. FedEx, bought a company or had to deal with a company called Roadrunner, which was kind of trying to do Amazon Prime, but for not Amazon world. Yeah, that was semi successful for a while. I'm not sure exactly where it is. But I wouldn't be surprised if there were more of these buttons on the on the on the checkout screen alongside shipping. So I think that that's probably where things are going to go is that there's just going to be two buttons. It's okay. It's not the best obviously, Amazon would love to be the only ones but there's no way Shopify would allow that. So if you have two buttons, why not three, so they're probably v3 At some point. I think that's where it's gonna go.
Andrew Maff 19:13
You know, my opinion, like, you know, for years, I've developed what is effectively like a bio bio prime type of button, right? Like, we would just make a button, track it as best we could, and just send them to a listing and let them work it out. We did the same thing with WalMart. We did it with Jett, back in the day, eBay every now and then. So adding in all those additional buttons to us, we actually saw a conversion rate lift plus with that and traffic those platforms really liked it. And one of the things I started to think about is I think that Shopify and Amazon are realizing that instead of spending the money and fighting each other, they're actually better off working together. And Shopify is okay with Amazon, increasing and improving the conversion rate. Some of these sites by having the buyers prime on there, as long as Amazon's okay with the merchant gets to keep the customer information so they can keep them coming back to the website. So it's actually I see it as for merchants, it's helped reduce the customer acquisition costs, because your conversion rate is typically improved, you get to keep all your customer information, and Amazon obviously still gets the fulfillment, they still have their fees behind it. And so I find that like this kind of, like, just, they're starting to slowly work together to do what really all of them have started with just wanted from the beginning, which is providing the customer with the best experience possible, which also comes from a fulfillment section of like, if you do five prime, you're gonna get it in two days, if you do Shopify Plus, you're gonna get it with two days, I bet we're, you know, it's Walmart's always five years behind. So I'm sure Walmart will do it in five years, and they'll be on there too. So like, it's just going to be a matter of the user, the website is going to become your base of, here's everything you can learn about our brand. Here's our product line. And then here's all of the buttons of the places that you can buy it from whichever one you prefer to shop with. Hmm,
Alex Yancher 21:08
I love that. And each bunch there. And each button connects to a particular fulfillment center and a fulfillment guarantee that's manifested in the marketing of that button. Really, they're
Andrew Maff 21:21
all just fighting for their annual subscription of a prime or I forgot what Walmart's is called. Very interesting. It's gonna be insane to see how things shake out in the next few
Alex Yancher 21:32
years. That's super interesting.
Andrew Maff 21:36
But Alex look really appreciate having on the show. I don't want to take up too much your time and you're super slammed. But I would love to give the opportunity here. Let everyone know where they can find out more about you and of course more about passport.
Alex Yancher 21:46
Andrew Maff 21:58
Beautiful. Alex, thank you so much. Glad we were able to pull this one off. Finally. Yeah, appreciate your time. Everyone else who joined of course thank you as well. Please make sure you do the usual and rate review, subscribe on whichever podcast platform you prefer or head over to theecommshow.com to check out all of our previous episodes. As usual. Thank you all for joining us. We'll see you all next time.
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