Using APIs to deliver e-commerce duty transparency

When the e-commerce shoe retailer Bucketfeet started getting international orders, it turned to duty calculation APIs from Pitney Bowes to give customers accurate total product cost.

   The story of how the two founders of the shoe retailer Bucketfeet met and dreamed up their business seems a little too improbable to be true.
   Two Americans – Raaja Nemani and Aaron Firestein – both found themselves in Buenos Aires for very different reasons: one an artist seeking inspiration, the other an investment banker who quit his job for a year to travel the world. They met while volunteering and one evening, the artist drew on the investment banker’s white sneakers, which sparked conversations on his further travels, and a concept was born.
   Soon, the two decided to cofound a company that provided artists from around the world the chance to design their own sneakers based on a few basic templates.
   That was in 2011. Today, Bucketfeet gets design submissions from 40,000 artists from 120 countries around the world for its mostly online business (the company does operate a few brick and mortar locations). Artists receive an upfront payment when their design is selected and receive a royalty for every pair of shoes sold.
   The company produces the shoes in China and, until recently, sold only to customers in the United States. But, as is often the case with successful e-commerce businesses, interest from customers in foreign countries started to emerge.
   As the company grew its sales footprint, it ran into a problem unique to the world of international online commerce: accurately reflecting duties in an online shopping cart.
   “We weren’t sure how to ship to other countries,” said Phil Causgrove, director of business development at Bucketfeet.
   The company began shipping internationally in 2015, initially to Australia, and now to Canada, the UK, and Germany as well. The problem was that the price of the product didn’t include real-time duties for customers in each of those countries.
   That’s a key consideration for online shoppers, who generally like to know the total cost of the good they are purchasing online. Footwear, in particular, can be a tricky category for shoppers to navigate when buying internationally, since duties can be high, and are often assessed on delivery or after by parcel companies.
   So Bucketfeet began working with Pitney Bowes to provide global trade management (GTM) functions. Pitney Bowes has traditionally been known as a provider of shipping and mailing services (probably best recognized for home postage machines), but the company has become a major provider of e-commerce solutions in the digital age.
   The interesting facet of what Pitney Bowes provides Bucketfeet is that the solutions are delivered via application programming interface (API). Bucketfeet’s enterprise e-commerce platform essentially pulls real-time information around product classification, import duty levels and taxes from Pitney Bowes and integrates it into the price seen by international customers.
   “We wanted to be very transparent in calculating duties,” Causgrove said. “And technology is certainly enabling those capabilities.
   “Footwear is an interesting category. Depending on the country of origin and the country where you’re fulfilling from, duties can be high, as high as 33 percent of total costs. Pitney Bowes accurately helps us collect the funds.”
   Bucketfeet uses the DDP (delivered duty paid) Incoterm for all its international shipments.
   “Based on how we classify products, we’re able to price the shipment accurately,” Causgrove said. “We had looked into building a rate table ourselves, but it’s challenging. Tariffs are changing constantly.”
   The fact that Pitney Bowes’ duty calculation API integrates into Bucketfeet’s systems was a key consideration. Other solutions the company examined required a redirect to a third-party platform and it wanted to key the shopping experience contained within its own platform.
   “They integrate right into our checkout,” he said. “We like to keep the traffic and feedback on our own platform. On an API level, the customer doesn’t even know who we’re working with.”
   Other duty calculator tools Bucketfeet looked at couldn’t be unbundled from a larger GTM offering.
   Bucketfeet’s use of Pitney Bowes’ duty APIs is the customer-facing end of its logistics service partnerships, but the vast majority of inbound shipments from China are managed by C.H. Robinson, while the company also uses the Asia-based sourcing house Li & Fung for suppliers. Bucketfeet’s internal team handles the order management process and end-to-end logistics to the consumer.
   The retailer integrates with its 3PL via an API – orders are pulled directly from Bucketfeet, and it’s communicated back to them when they’ve accepted and fulfilled.
   Causgrove said the use of the duty API is not so much about cost savings as “doing right by our customers.”
   “On the surface, it’s not quantifiable,” he said. “But it’s important to be transparent upfront with the customer.
   As orders from outside the United States grow, Bucketfeet might change its fulfillment strategy to avoid bringing all product to its 3PL-managed distribution site in Chicago. Causgrove said the company is looking at consolidating at a location in the Asia-Pacific or fulfilling from its manufacturer.
   “It depends on the size of growth and where the demand is coming from,” he said. “It will change over time, so we’ll look at the place to optimize and reduce cost.”