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Matthew Merrilees has spent twenty years on the operational side of cross-border, first at DHL, now running North America for Global-e. I brought him on to talk about international profitability and we ended up in the least glamorous corners of the P&L

Here is what stayed with me.

The Cost That Surprises Operators Is Not The One They Budgeted For

Ask a brand what makes international expensive and they say shipping. Matthew's answer starts somewhere else: payment acquiring. Converting an international shopper at scale means a multi-gateway setup with local acquiring underneath it, and that machinery is one of the largest line items in a cross-border transaction. Most operators never see it broken out. They see a blended processing rate and move on.

Shipping, duty and tax come second and third in his ordering, and they are real. But the sequence matters. If you are optimizing parcel rates while ignoring what conversion actually costs you in eleven markets, you are working the wrong end of the sheet.

The Rules Moved and The Pricing Did Not

US de minimis went from $800 to zero. Every parcel entering the country is now dutiable, which means every SKU needs an HS code before anyone can quote a landed price. Matthew counts 75 regulatory changes on the US side. I had said seventy-plus on the call. He corrected me.

Europe did its own version. Below the 150 euro threshold there is now a three-euro charge per unique HS code. Matthew is having conversations right now with brands running sitewide promotions across mixed catalogs who have not modeled what that stacking does to a basket. The UK sits at 135 pounds with its own logic. No two markets behave alike and there is no version of this where you set one international price and stop thinking.

And Section 321 through Mexico, which everyone was setting up eighteen months ago and putting on earnings calls, is finished. Matthew's read on that is worth more than the closure itself: doors close, brands move fast to the next play, and the job of the platform underneath them is to make switching merchant of record a configuration change rather than a project.

Money You Are Already Refunding Is Money You Can Get Back

This is the one I keep turning over. A shopper in Germany returns a jacket. The brand refunds the product, the shipping, the duty and the tax. Those duties and taxes are recoverable. Most operators never file for them. Same story on the original import into the US, where drawback is available to anyone willing to sit in the CBP approval queue, which Matthew compares to the DMV and which I do not think is unfair.

Nobody puts drawback on a growth slide. It is recovered margin with no acquisition cost attached, and it sits there uncollected because it is boring and the filing is tedious.

I asked Matthew for the single number an operator should check Monday morning. He would not give me one. Profitability by country, drilled to that level, or you are not really looking. I have stopped arguing with him about it.