A Guide To Sustainable eCommerce
The world is always in a constant state of change. Years of evolution has taught us that adaptation is the only way to ensure your survival.
It’s true for animals – not surprisingly, it’s true for businesses as well.
And one key factor for businesses today is sustainability. At ImportXperts, we teach our members how to import and export products around the world – and so we have written this guide to help you consider how to do it in a sustainable way.
With climate change and all the environmental issues that we are facing today, it’s become a topic that permeates every aspect of our lives whether we like it or not.
Everything should be considered – how a product is made, what’s in it, where everything is sourced, how it’s packaged, and how it’s shipped. Even the company’s sustainability efforts make a difference, like whether the company donates any profits to charities, or whether they are mindful of their carbon footprint.
So in this guide to sustainable eCommerce, we’ll break down the issue of business and sustainability as follows:
- The Importance of Sustainability for Today’s Brands
- Manufacturing in China in a Sustainable Way
- Sustainable Packaging – the key to being creative yet eco-friendly
- Sustainable Shipping – dropshipping vs warehousing
- Responsible sourcing and other activities to boost your sustainability
At the end of this article, hopefully, you’ll see that sustainability is a good idea not just because you are helping to save the environment – it will help your business thrive.
The Importance of Sustainability for Today’s Brands
The heart of the matter is, in today’s society, people are generally becoming more environmentally-conscious. The average consumer is bombarded with messaging geared towards shifting to a more eco-friendly lifestyle – and it is working.
Let’s take the Attenborough Effect, for example.
This term was coined in 2017 after the documentary on ocean-plastic Blue Planet II was released – narrated by David Attenborough.
Studies showed that a year after the documentary was released, they saw a 53% reduction in single-use plastic usage in the UK and the United States. As well as that, 42% of people are now considering sustainable materials for their day-to-day purchases. (1)
There are other environmental movements gaining traction all over the world.
The Plastic Free July Movement began in 2017, where people attempt to eliminate all use of single-use plastics in July. Since then, it’s expanded into a full-blown movement with community support of over 120 million people in 177 countries.
In short, people are becoming concerned for the environment at greater levels, and are pushing to reduce their own carbon footprint. Rightfully so, as years of mindless production and consumption has led the world to this state worthy of immediate attention.
The financial repercussions of sustainability
You might think that choosing the sustainable option will cost more. Besides, better ingredients, eco-materials, biodegradable packaging – as a small business, can you really afford it?
Well, recent studies show that it pays to be more sustainable.
A study by Nielsen found that:
73% of global consumers said that they would definitely change their consumption habits to reduce their environmental impact
What’s more surprising is that respondents say that they are willing to pay above-average prices for products that are produced sustainably, or simultaneously help the environment.
- 49% of consumers say they’re inclined to pay higher-than-average prices for products with high-quality/safety standards (often linked to better sustainably)
- 41% of consumers are willing to open their wallets for products that are organic
- 38% are willing to pay more for products made with sustainable materials
- And 30% will pay more to companies that deliver on socially responsible claims
This shows how people are becoming mindful not just what they consume, but how their consumption affects the environment.
Consumers are shifting to a more eco-friendly model of consumption, and are, on average, willing to pay more to brands who act sustainably.
Companies who don’t adapt, run a risk of losing business to those who do.
Manufacturing in China in a Sustainable Way
Many people think that if you manufacture in China, the products won’t be sustainable. But the times are changing and the Chinese government has implemented many rules and regulations, cracking down on pollution.
In 2016, China started strictly imposing their new environmental regulations. This led to the closing of over 80,000+ factories in China in 2017. The crackdown continues up to this day. Aside from imposing heavy fines to violators, businesses who are not able to keep up with environmental regulations are still being shut down, much to the detriment of their local economy.
The Chinese government is particularly harsh on businesses that contribute to the air, water, and soil pollution that their manufacturing industries were infamous for. This development is unprecedented, as China was previously known to be lax about implementing their environmental regulations.
This crackdown is starting to produce results – clearer skies, cleaner waters, and a lower carbon footprint for the country who has the greatest contribution to the world’s carbon emissions.
Sustainability equals growth for eco-friendly companies
All of this push towards sustainability directly correlate to greater benefits for businesses who choose to be sustainable.
Unilever released a study that further strengthens the relationship between consumption and sustainability in the world today – 33% of consumers are now choosing to buy goods from brands that are doing social and environmental good. (2)
What’s interesting is that based on the financial performance of Unilever’s other brands, they found that those who integrate sustainability into both their purpose and products grew 30% faster than those who didn’t.
The facts are in: keeping up with the times means prioritizing sustainability.
You may not think that this applies to your business given the scale, but even a small online store can implement changes that would greatly affect their business.
So where is the best place to start? Three things to consider:
- Manufacture sustainably
- Package sustainably
- Ship sustainably
1. Manufacture sustainably
As the business owner, it’s important to do your due diligence about your factory.
Ask your suppliers where their ingredients come from, what they are made of, and what they are doing to be more sustainable. Do they offset their carbon emissions? How do they treat their workers? Are they being compliant with the environmental regulations of their countries?
If you don’t have the time to visit yourself, there are companies in China who you can hire to do an audit on the factory.
2. Package sustainably
At ImportXperts, we believe that packaging is very important. Package your product beautifully, and you can not only transform the feel of the product, you also increase the brand value. So while you’re considering your packaging options, it’s also worth looking at it from a sustainable viewpoint too.
So what exactly is sustainable packaging?
Effectively, it’s packaging which doesn’t leave a mark on our environment. The packaging company, Packhelp, define it as packaging “that, over time, reduces its environmental footprint.” (3)
In order to be fully sustainable, it’s either:
- Made from 100% recycled materials
- Can be repurposed and reused for other things
- Or is 100% compostable
When thinking about your own packaging, and changes that you want to implement, you would want to consider the traditional three “Rs” of waste reduction: reduce, reuse, and recycle.
By that, we mean…
- Reduce: Cut down on the materials you need to use in your packaging.
- Reuse: Make it good quality so you encourage your customers to repurpose it.
- Recycle: Try to source responsibly and use recycled materials.
You really have to be conscious and think about all the details. Do your research, and see what’s available to you.
For example, in the past few years, we’ve seen the launch of more plant-based and compostable packaging companies like noissue who make mailers from corn starch.
Don’t forget that the inks in your packaging also have an environmental impact. Check to see if they are soy-based, vegetable-based, or petroleum-based. Soy and vegetable-based inks present a viable eco-friendly alternative to the traditional petroleum-based ones. They also come in vibrant colors – so why would you still pick the one that harms the environment?
Bottomline is, do your research to see what kind of packaging you need, and then look at all the options available to you. And check places like Pinterest for some amazing packaging inspiration.
It costs a bit more to choose the environmentally-friendly option, but it will definitely differentiate your brand against the others. Consumers will take notice too – and they might be the ones who are willing to pay a premium for sustainability.
Sustainable Shipping – Dropshipping vs Warehousing
There is one aspect of eCommerce that many business owners, and consumers, are not as mindful about – shipping. It is a source of a lot of carbon emissions that really adds up to the carbon footprint of your business.
Whether you choose the Dropshipping model or the warehouse-fulfilment model (e.g. Amazon FBA), it’s worth considering the effect on the environment.
If you choose to dropship, you place your order after your customer has bought it. Once you’ve received the money, you forward their order and shipping details to your supplier, and they ship the order directly to your customer.
The problem with this from an environmental point-of-view is that packages are shipped individually. Even if your customer just buys one piece, the item is wrapped and shipped on its own.
Imagine the millions of people who buy one thing at a time online and are being individually shipped around the world – it really adds up.
The alternative to dropshipping is the warehousing model. The biggest in the world is Fulfillment by Amazon (FBA). This is where you ship your products in bulk to any of the Amazon warehouses, and when your customers buy it on Amazon, they ship from the warehouse.
This results in not only faster shipping for your customers, but also lesser carbon emissions since you are utilizing Amazon’s infrastructure. There are other fulfilment centers called 3PL warehouses which can ship for you.
One caveat though – yes, warehousing is more sustainable than dropshipping, but you still have to be conscious about the impact of this on the environment. FBA is convenient for your customers, but it still contributes to carbon emissions. (4)
So really, the best way to work on shipping more sustainably is to encourage more sustainable options for your clients. For example, provide incentives to customers for bulk purchases, by creating pricing models that lowers costs when they buy bulk. Explore offering package deals, buy 2 get 1 free, etc., so that your customers only have to ship once.
Responsible sourcing and other activities to boost your sustainability
So what are other ways to become a more sustainable business?
Do your part in the global sustainability movement. Check out your local environmental organizations, and commit to donate part of your profits to them. Plant trees to help with deforestation. You can really be creative with this – check out local environmental initiatives in your area. Or better yet, design and market your own.
To give you some inspiration, here are a few examples of what other businesses do:
- United By Blue (UBB): this outdoor apparel and accessories company focuses on ocean conservation. They commit to removing 1 pound of trash from the earth’s oceans for every item they sell.
- Toms Shoes: through their Giving Partners program, this shoe brand has given 93 million pairs of new shoes to children in need.
- Who Gives A Crap: they produce 100% recycled toilet paper, and they promise to commit 50% of their profits to build toilets in the developing world
The world is changing. Becoming sustainable is one direction that is not only long overdue – it can actually be profitable too.
Consumers are becoming more eco-conscious, and they are willing to pay more for conscious brands. Studies show that the more sustainable a company is, the more successful it becomes.
Do your due diligence. There are factories out there who are acting in more sustainable ways, so it’s better to know what your supplier is doing. Think of it as a form of marketing – your customers are also more likely to notice these small things, and will reward you for them.
The game is no longer just survival of the fittest. Consumers are taking notice. We need to become sustainable and adapt, in order to survive and thrive.