Buy.com Steps Up Global Shipping

Online retailer Buy.com on Tuesday introduced expanded global shipping capabilities, including a transaction service that informs international shoppers of total shipping costs in their local currency.

To cater to its burgeoning international customer base, the Aliso Viejo, California-based e-tailer now also discloses additional fees that might be tacked on to global shipments.

"Buy.com is being frugal these days," Jupiter Media Metrix analyst Ken Cassar told the E-Commerce Times.

"If it made any material investment [in its new shipping capabilities], this tips their hand that they see global e-commerce as a big opportunity."

Buy.com said it will fulfill international deliveries via a Florida warehouse, allowing the company to ship products to an additional 15 countries.

Global Pursuit

As another phase of Buy.com's ongoing resurgence from near collapse, the company's latest move bodes well for its survival.

Overseas customers represent a ripe revenue opportunity for e-commerce firms, according to analysts.

Today, the United States accounts for 46 percent of total e-commerce, but its share will drop to 36 percent by 2005, research firm IDC reported.

IDC also noted that e-commerce in Asia-Pacific and Western Europe will grow at the fastest clip. In addition, growth in Internet use in the Asia-Pacific region, Latin America and other global locales soon will outpace growth in more developed countries, such as the United States, Canada and several European nations.

And by 2005, the United States will trail both Asia-Pacific and Europe in the number of total Internet users.

Overseas Opportunity

Buy.com's international customers now will see the actual price of their items at the point of purchase, rather than remaining in the dark about customs fees, duties and taxes until they receive their receipt.

Still, the company will have to compete with local retailers that do not have to levy extra shipping charges, Cassar noted.

"What is interesting is that other U.S. companies are moving out of foreign countries," he said. "But Buy.com sees a low-cost opportunity to pick up incremental revenue overseas."

Survival Prognosis

With its expanded delivery capabilities, Buy.com now maintains an online presence in Australia, Canada, Mexico, Switzerland, New Zealand and 11 European countries: Denmark, Finland, Germany, Ireland, Italy, The Netherlands, France, Austria, Sweden, Belgium and the United Kingdom.

The company's ability to control marketing and personnel costs while maintaining a healthy sales stream will determine the trajectory of its comeback trail, Cassar said.

"It will not be as big as once planned," he noted. "But in the pure-play retail space, there will ultimately be a large number of small but profitable retailers."

Buy.com's global delivery enhancement marks the company's second shipping-related announcement in as many months. In February, the company said it would waive shipping charges on domestic orders of US$99 or more that weigh less than 20 pounds.