Practical Ecommerce

Selling to Hawaii, Alaska Helps Learn International Ecommerce

Selling to consumers in Alaska and Hawaii can teach small and mid-sized online retailers valuable lessons that could apply to international ecommerce and can offer valuable new markets in their own right.

International ecommerce or cross-border ecommerce, as it is sometimes called, represents a rapidly growing opportunity that has excites many online sellers. China or some South American countries are growing at a faster pace than are online sales in the United States. In fact, something like 16 percent of global ecommerce sales last year were actually cross-border orders.

In spite of this opportunity, selling internationally, particularly to unfamiliar or far away nations is not without problems or uncertainty. As an intermediate step toward selling internationally, merchants might seek to increase sales in places like Hawaii, Alaska, and U.S. territories. Selling to these relatively remote U.S. locations is less complicated than selling to another country, but still offers applicable lessons for sellers that want to learn how to ship abroad.

As an intermediate step toward selling internationally, merchants might seek to increase sales in places like Hawaii, Alaska, and U.S. territories. Selling to these relatively remote U.S. locations is less complicated than selling to another country, but still offers applicable lessons for sellers that want to learn how to ship abroad.

Flexible Pricing and Price Presentation

Scarcity drives prices. Americans living in Hawaii, Alaska, or U.S. territories like Guam or American Samoa, certainly understand this concept. As an example, try buying a gallon of milk at the Safeway in Lahaina, Hawaii on the island of Maui, where it was $4.99 last week. Similarly, Hawaii News Now reported milk prices on Oahu ranging from $4.99 to $7.49 per gallon.

Ecommerce merchants may also find that some items can demand higher prices from shoppers with less access to those products whether those shoppers are in Hawaii or a foreign nation.

In this way, sellers may wish to present Hawaiian and Alaskan consumers (and ultimately foreign shoppers) with a different price than they present to shoppers from other markets. Dynamic pricing is not some out of reach technology, rather it can be implemented now on some ecommerce platforms or with third-party solutions.

This approach can be particularly helpful with closeout items. Imagine an online apparel retailer that closes out shorts in October because most domestic customers are more interested in coats and hats. This merchant might deeply discount shorts, even losing money simply to free up cash and inventory space. But customers in Hawaii might still be willing to buy shorts at close to full price. So why not show them those prices or even market specially to them?

Similarly, come Spring, some online retailers will close out winter items like flannel shirts, which still might be popular in Alaska for a few months.

In other words, prices vary by region and retailers can and should present market-relevant pricing.

Shipping Rate Management

Typically for U.S.-based merchants, it costs more to ship to Alaska and Hawaii than it costs to ship to the contiguous U.S. states. These relatively higher shipping costs sometimes surprise merchants, and have even caused some sellers to stop shipping to Hawaii and Alaska.

As evidence, consider that web developer Patrick Rauland published a tutorial last year describing how to exclude Alaska and Hawaii from WooCommerce. Several Ebay sellers, including LuizaY, Saviortools2010, and 2002jrhaines2, have posted questions about excluding Alaska and Hawaii on the marketplace’s community forum. A simple search on Google reveals that many retailers are concerned about shipping to these outlying domestic destinations. Now imagine some of those same sellers trying to sell internationally.

In spite of the perceived costs and fears, shipping to Alaska and Hawaii can be done. Amazon does it for free.

As an example, sending a Priority Mail, Large Flat Rate Box from Caldwell, Idaho to Kehei, Hawaii costs $15.80. Sending the exact same box from Caldwell, Idaho to Olean, New York also costs $15.80. The cost is identical, although the shipment to Hawaii would take longer to arrive. But if the same size package were sent via UPS, it would cost more to go to Kehei.

The lesson here is properly managing shipping rates and expectations to Hawaii, Alaska, and U.S. territories. Use real time shipping rules, delivery time estimates, and a variety of shipping carriers to offer the best possible rates. What retailers learn about sending items to Alaska or Hawaii and offering customers viable shipping options will help them prepare for shipping to foreign destinations too.

Consider Fulfillment Services

A final lesson to learn from selling to relatively remote domestic customers is the value of a good fulfillment service.

Fulfillment services will warehouse, pick, pack, and ship products for retailers. On the island of Oahu, for example, a retailer could store popular items at a local fulfillment company’s warehouse. When a customer in Hawaii places an order, the fulfillment service packs and ships the order, saving the customer and the retailer time and money.

Shipments to the fulfillment center can go via much less expensive bulk freight, perhaps, even on a container ship.

Once a seller has learned to trust a fulfillment service in Hawaii, it might be easier to begin trusting a fulfillment service in a foreign land.

Availability Breeds Loyalty

Online shopping may be a disappointment for at least some shoppers in Alaska and Hawaii.

Imagine a shopper from one of these states visiting an American retail website, finding a couple of times, adding those items to the shopping cart only to find out after shopping for 20 minutes that the retail won’t ship to Alaska or Hawaii.

Not only has the shopper needlessly wasted her time, but she probably won’t ever come back to the merchant’s site, even when it is time to order Christmas presents for delivery to friends and family in the 48 contiguous United States.

Conversely, Hawaiian and Alaskan shoppers who are able to order from a given ecommerce site may become loyal repeat shoppers.

Nurturing these shoppers can, and likely will, lead to more sales.

Self-service Customer Service

Serving customers in significantly different time zones can create problems for online retailers. Before complicating multiple time zones with languages differences for some cross-border orders, online sellers can master long-distance customer service with Alaskan and Hawaiian shoppers.

Hawaii is seven hours behind Eastern Standard time, so that when a New York-based online retailer’s office hours are ending for the day, it would be mid-morning in Honolulu.

While online retailers will want to be as responsive as possible to phone, email, and even social media customer service requests, self service customer service may provide far away shoppers with the answers needed almost immediately.

Consider placing detailed customer service information on site. Perhaps even include videos that explain key policies, like returns, shipping, or similar.

Armando Roggio

Armando Roggio

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  1. Elizabeth Ball October 11, 2014 Reply

    Excellent article, Armando! As an Australian, we are often disappointed how few US online retailers ship to DownUnder so I can imagine how the Hawaiians and Alaskans feel. I bet your readers will rethink their policy now!

    On a related note, if you DO ship internationally, make sure you allow for local discrepancies in shipping information.

    For example, White House Black Market insisted I enter a 5-digit zipcode to ship to me in Australia. However our zipcodes (called postcodes) are only 4 digits and therefore I couldn’t complete my order. How much money have they been needlessly throwing away?!

  2. Marcia Chen October 20, 2014 Reply

    Because I live four months of the year in Hawaii, I can add two additional points to consider.

    Some websites are unreasonably rigid in refusing to ship to Hawaii. If they only use UPS or FedEx, why not let the customer decide if the outrageous shipping cost is worth it to them? If they can ship through USPS, even if they don’t normally do so, why not enable that as an option?

    The other point is that it is sometimes very difficult to find out whether or not a company will ship to Hawaii! I have had to call and wait on hold for 20 minutes to find this out. That’s frustrating.

  3. Justin January 10, 2016 Reply

    As a resident of Honolulu, thank you.

    Why these sellers all don’t get that Hawaii is a state (with a large population, with standard postage rates as shipping from coast to coast.

    And priority mail does not take longer for me. 3 days, sometimes 2. First Class mail 3-4 days. Cause it ALL comes by plane, and we have a huge busy international airport.
    Parcel post comes by boat, but we KNOW that!

    And yes ups & FedEx GROUND will ship here, taking 5 to 7 days. It also goes by air. And we are often willing to pay the premium ups/FedEx difference over USPS, because the item here is either STILL more expensive, or simply unavailable. With 1 million+ people on Oahu alone (which is 20×30 mles) we don’t have space for many Big Box stores.

    So frustrating. Especially when eBay sellers will ship international but NOT Hawaii. Wow.

  4. Susana January 14, 2016 Reply

    Thank you for this well written article illuminating a very important point for both businesses and Hawaii residents alike.

    I live on a neighbor island where there are even less resources than Oahu so I do the bulk of my shopping online. I even buy a lot of my food online. You are exactly right about the frustration of going through the purchase process only to find I’ve wasted my time if they don’t ship to Hawaii. It’s a curious thing why so many companies aren’t interested in our business. I am definitely loyal to those companies that are!

    I also agree with you that a local fulfillment service is a great option for lowering costs. In fact, I work with Delivery Hawaii, a fulfillment services and logistics provider that offers solutions both to the challenges of shipping from the US mainland and to the challenges of shipping inter-island.

    If interested, you can find out more at deliveryhawaii.com.

    Aloha