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How to prepare your store for cross-border ecommerce

Written by Russell Cragun on May 10, 2016 in Strategies & Tips
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In a world where ecommerce is more popular than ever, it’s never too late to investigate cross-border sales for your store. Cross-border ecommerce has been booming for the past 18 months with sales increasing over 30% in China. However, according to a Paypal study, China isn’t the only country that is seeing exponential growth. India and Nigeria are expected to see growth over 79% in the coming year. With sales increasing like this, why wouldn’t you want to get a slice of the pie?

Cross-border selling is a great opportunity but there are a lot of things you need to consider before making the commitment. Shipping takes on a whole new meaning when you are selling to a different country, not to mention if someone wants a refund. Other things to keep in mind are listings, languages, purchasing behaviors, currency exchange, competition, and many more.

So what can you do today to get a piece of the rapidly expanding cross-border ecommerce pie? We’ll help you discern if this is something that your store and resources can support.

Pick a region to sell in

A common mistake that ecommerce rookies make is attempting to become the next Wal-mart or Amazon by trying to sell everything. You watch these new online stores try to sell everything from party supplies to high-end jewelry. The same mistakes can be applied to someone getting into cross-border sales. People will try to sell in China and other Asian countries, while at the same time trying to sell products in Europe. The problem with this is potential lack of research and resources. Pick one region that fits with your business and start there.

Do your research

By picking a single region you’ll have the ability to focus on shopping behaviors, shipping logistics, and how to to give them the best experience possible. This will also give you a chance to get your website ready for foreign translations, updated marketplace, and any other changes needed like different clothing sizes and currency.

By choosing one region at a time, you will have the opportunity to study the culture and discover what people like to buy and why. Learn about their holidays and traditions, and what matters most to them. This can help you have timely sales, promote the right items, and have a personal feel in your store. The last thing you want to do is sell something that can be highly offensive to certain regions.

Currency Exchanges

Find out what the currency exchanges are so you know what to properly charge people. Once you figure that out, you’ll also need to find out how you’ll get paid for the goods you sell. A lot of countries have different ways to buy things online. While it may seem simple to make everyone use Paypal, that just simply isn’t the case. You will need to accept payment in the method that the customer prefers. Other than credit cards, there is no other truly global payment method.

You have to remember that currency exchanges are changing daily. You’ll probably need to enlist the help of a backend developer to combat this. These developers will be able to build out an API that will automatically track and implement the currency changes for you. Thus if the value of a dollar rises or falls, you won’t be impacted.  If you don’t think this is important you just have to remember that stock markets have a really good history of changing the power of a dollar in just a day. Be prepared for anything so you don’t take a hit and lose money.

Competitor Analysis

Don’t forget about competition! Some of the countries that you’re wanting to sell in might have competition that you have never heard of. If you’re not prepared with the proper resources you won’t be able to compete with against these foreign giants.

If you’re looking to get started on your own research, may I recommend Paypal research department. They do an amazing job breaking down the sales and growth of other countries. You can visit the page here.

 

Related Content: How to scale your ecommerce store

 

Learn about International Shipping and Fulfillment

You have to make sure that you can ship to the region cost-effectively. No one is going to pay a significant amount more to have a product shipped from a different country if there’s a comparable domestic alternative that’s much cheaper. Sometimes your best option is to set up foreign fulfillment services. This can cut down on shipping cost and delivery time.

Learn about international shipping to better prepare yourself. There is more to it than slapping a label on a box and paying a little bit more. There are regulations, customs, export licenses, and much more to ensure that shipping is legal and effective. UPS and Fedex offer great resources to those who are looking to ship internationally.

If you already have a big enough customer base then opening an overseas fulfillment service might be the best option for you. This might not be an affordable option if you are just testing out the waters.

Legalities, Regulations, and Taxes

One of the biggest challenges retailers face when selling across international borders is dealing with customs and duties.” - Richard Lazazzera, Founder, A Better Lemonade Stand (quoted here)

Before opening shop in a new area you’ll want to be up-to-date on all current laws in the region. This may involve you getting a business license in a different country. Other countries might have different laws that prohibit the sales of certain products, which could affect your business. If you are selling an item that you’re unsure about, you can always check with the relevant government before you begin selling. Although if they are slow to respond you can always look on your competitor's site to see if they are selling the items or not.

If you don’t want to cause any issues with any local or foreign government you’ll need to document and abide by any tax laws. Most foreign countries have websites with all their tax information easily accessible for you and their citizens. By applying proper sales and business taxes you could avoid any situations that may threaten the livelihood of your store.

Be Easy to Understand

You will need to look into payment options, shipping options, and local customer support if possible.2 If you take the time to provide simple, easy to understand instructions dedicated to helping these customers understand shipping dates and estimated delivery times, it will give them a higher customer satisfaction. This of course is good for you as your returning customers will increase over time.

Possibly the most crucial part of being understood is speaking to your customers in their native language. Since technology is so advanced now days, websites can be translated into just about any language in a matter of seconds. The only problem with this is that some words and phrases don’t transfer properly, and can confuse the shopper. To combat this it would be in your best interest to hire someone who is fluent in the language to translate your landing pages and products. By spending the extra time and money you can rest easy knowing that people will understand your site and catalog.

Resources

There is a really good chance that you will need to hire and manage more people for your store. Getting the right employees can make or break the success of your store. You can find local (or foreign in this case) talent easily online through freelancing sites and other sources. Some of the positions you’ll need to consider are:

  • Customer service representatives that are fluent in the local language.
  • Developers to help build your site and catalog to cater to a foreign market.
  • Designers that can create local ads that are geared towards the region.
  • Marketing specialists that know and understand your new customers and their shopping behaviors.

At first it may seem like an expensive task to add this many new employees to your company. However, if you are able to fulfill these functions, your company will look professional, responsive, and will ensure that you can cater to the needs of your customers. You could lose a lot of potential sales by having a customer confused as to whether or not they can shop on your site.

Is It Worth It?

As mentioned, international ecommerce is booming and is a fertile opportunity in some regions. However, this does not mean that it’s a good opportunity for everyone. It might not be as profitable for you as compared to other stores. That’s why it’s critical to do your research first, and discover what your true potential could be. Maybe your best odds are staying within your own country and sticking to what works for you.

Make sure that your numbers add up because the difference in something as simple as shipping can make the difference in a profit and a loss. There can also be a lot of unseen cost that could catch you by surprise and cause your margins to dip in the red.

A couple questions to ask yourself if this is right for you could be:

  • What is the long-term strategy of your company?
  • How will this force your company to change and evolve?
  • What is the backup plan if this fails?
  • What is the timetable to implement this strategy?
  • What is your budget for this process? Will this affect your bottom line and salaries?
  • Are there other companies or stores you could partner with?

 It’s no easy task, but getting into international markets can be a very profitable and exciting opportunity for your company. When paired with a specific strategy and goal, you could see positive changes to your bottom line. Remember that you’re not alone and that there are plenty of resources to help you make the right decisions, slip out of a crunch, and understand everything there is to cross-border selling. Once you have done your research and decided to make the trek into other countries you’ll have plenty of chances for first hand experiences, and first hand experiences are the best teachers.

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