Breaking the glass ceiling to enter the international market is a dream for many eCommerce entrepreneurs. If you are someone sharing the same aspiration but don’t know where to start, this is the right article for you. Let’s see the top tips to start selling internationally without waiting any longer.
The Allure of International eCommerce
Did you know that global eCommerce sales are estimated to reach 6.5 trillion USD this year? So, if you have the potential to expand, this is the right time for you to start planning it. But where exactly lies the allure of international eCommerce?
To start with, going global has the benefit of increasing your customer base. Consider this research by Pitney Bowes that states at least 40% of shoppers in the U.S., U.K., and Germany like to shop from global brands.
On top of that, international eCommerce has a high potential to grow faster. With advancements in supply chain and technology advancements, it is becoming increasingly convenient to ship overseas.
Top 8 Essential Tips for Businesses to Start Selling Internationally
Here is a complete step-by-step guide for you to start selling internationally:-
1) Conduct thorough market research
Wernher Von Braun once famously said, “Research is what I’m doing when I don’t know what I’m doing.” Well, it holds true for all of us, especially for business persons wanting to transcend their boundaries to newer territories. Doing market research is the first step in knowing your customers and judging if your product is fit for the market.
Take the example of McDonald's changing its menu for each country it settles in, respecting the local tastes and customs. It's important to note that McDonald's recipes are tuned to what motivates local customers to buy. That’s the number one rule in market research, understanding customer preference and demand.
Here are a couple of things you can look at while conducting market research:
- Find a target market with both customer demand and conditions to sell your product.
- Analyze your target customer base and understand their buying habits; for example, their inclination towards sustainability.
- Look at your competition and the costs of acquiring new customers.
- Have complete knowledge of the tariff rules, trade regulations, restrictions, and prohibited items.
- Have a fair estimate of investments needed as well as partners required, including manufacturers, shippers, distributors, etc.
2) Choose a marketplace or build your website
Once you understand your targeted demography, examine the market’s conditions, and figure out a budget, the next task is to set up your business. Most international eCommerce retailers either prefer to sell through a pre-existing marketplace or build their own website with the local domain.
Let’s examine the pros and cons of each case.
Pros: Selling through a marketplace will lessen your worries about acquiring customers and setting up fulfillment. All you have to do is upload your products and focus on marketing. Established marketplaces like Amazon, Rakuten, eBay, and Alibaba take care of warehousing, packing, packing, and sometimes even shipping. They also handle local sales taxes.
Cons: While marketplaces can help you achieve quick growth and expansion in a new market, it also comes with high platform charges. This chips away your profit margins. At the same time, you may not have complete control over customer communications and branding.
Website or Storefront:
Pros: Having your website helps you build credibility with your new customers, execute a branded presence and control all functionalities. There are great platforms like Shopify, Wix, BigCommerce, and Magento that have all the resources to help set up your online business anywhere.
Cons: Doing in-house fulfillment can be a tough job. Everything would require constant attention, from storing products to packaging them and aligning with shipping carriers. Additionally, you would have to handle all tax-related work.
3) Provide multiple and local payment options
Even though the world has shrunk into a ‘global village’, there is no one global payment method that all customers appreciate. Each country has its currencies and preferences that favor one payment system over another.
According to a recent estimate by Oberlo, the most popular payment method demanded the world over is eWallet or digital wallets. eWallet operated through mobile is expected to account for 56% of all payment options by 2026. This is a strong signal that offering digital payment options strikes the right chord with most global customers.
Here are a couple of other useful stats that you consider while deciding your payment offerings:
- The use of credit and debit cards continues to be a popular choice amongst customers, with an estimated 20% and 12% use, respectively.
- Approximately 9% of global shoppers like to do a direct account-to-account transfer.
- Buy-now-pay-later is another method that 5% of global customers prefer to use.
Since these statistics make up for global estimates instead of specific geographies, it is important you understand and respond to your targeted customers' wants. For example, 86% of Indian consumers still prefer to have a cash-on-payment option.
At the same time, it's critical you choose a gateway that adheres to global repute and safety. We have a list here to get you started in your research: Worldpay, PayPal, Ingencio, Square, Stripe, and Amazon Payments. You can use MasterCard, VISA, and American Express for credit and debit cards.
4) Set priority to fulfillment and shipping
A positive customer experience starts with a delivery experience. Did you know that about 22% of shoppers drop online shopping with businesses with too slow shipping? This shows how critical it is for your business to upkeep shipping and fulfillment times. Most expect deliveries within two to five business days.
International shipping comes with a whole baggage of challenges. One, managing delivery expectations becomes tough in the face of navigating customs and unpredicted delays.
Second, setting up a cross-border logistics system by itself is very difficult. You will need 3PLs and carriers to help with efficient warehousing, fulfillment, and transport.
Third, due to greater distances and multiple parties involved, 27.5% of customers opting for international shipping face tracking delivery issues. It is thus absolutely critical to track orders and notify customers. Having the right technology partner, such as ours, will help streamline your shipment tracking in-real time and customer notification for each milestone crossed.
Here are a couple of things you can do to optimize your shipping and delivery mechanism:
- Start with estimating your shipping (and handling) costs. Having an audit of warehousing, fulfillment, and packaging supplies will pinpoint the areas where you can reduce costs. With reduced expenses, you can charge your customers less.
- Integrate with multiple carriers to facilitate expedited shipping, compare rates, get discounts, and access flat-rate shipping.
- Partner with a third-party logistics provider with a global warehousing network to help you with storage, inventory distribution, and swift fulfillment.
5) Craft your return, exchange, and refund policies
Returns and exchanges are the standard norms in the eCommerce industry, be it on a regional or global scale. It is plausible that you will face at least one customer requesting a return or exchange soon after you launch. In any case, you must be prepared not only to handle it swiftly but also to do so in a way that will make the shopper return to your store again.
Start with crafting an impeccable return policy. Clearly state the clauses for accepting or rejecting a return, specify your return window, and explain your return process. This can include information like how to generate a return label, where to drop the shipment, the timeline for processing a refund, and any shipping charges or restocking fees.
The need here is to have an empathetic approach toward customer experience. Offer a branded self-service return portal instead of compelling customers to file a request over the phone or email. Present return tracking to keep your customers informed. If needed, offer a resolution or compensation, like a discount for the next purchase.
Another effective way to transform a bad return experience into a good one is to handle exchanges expertly. Many customers file a return request for reasons like mismatched size and color of the product. In this case, offering an exchange is the best way to retain their trust and revenue.
Returns and exchanges become easier with 3PLs or reverse logistics solutions like ReturnBear. They can handle the actual shipping, exchange, quality control, restocking, and disposal of your returned products.
6) Know about landed costs, duties, and taxes
International eCommerce is often mired in tons of regulations, tax regimes, and duties. Landed costs, duties, and taxes are factored into your product pricing, so being informed about them should be a high priority.
Here is a list of things to be mindful of when starting your international eCommerce business:
Landed costs involve the total expenses of shipping an international order. In other words, it is the total cost of the product or the shipping charge incurred in the last-mile journey as it reaches the customer. The landed costs sustained in import also determine the price at which a seller can charge a customer during export.
Landed costs have a number of components: insurance, customs fees, currency exchange rate, port fees, demurrage fees, Fee on Board, and export license charges.
You pay a fixed percentage of the fee to the government of your shipping destination. Usually, they extract a fee to let your product sell in their country.
A number of factors are involved here, including product value, origin, and shipping destination, Harmonized Tariff Item Code, and trade treaties. For most consumer products, the customs fees are fixed at 5-10% of the product value.
In international shipping, there are two ways duties are collected:
- Delivery Duty Paid: Here, the seller (in this case, you) pays for the import costs, including import taxes, duties, and brokerage fees. You can collect the DDP fees from customers in the checkout phase.
- Delivered at Place: The seller is responsible only for shipping the product, and the end customer pays all the import costs when they receive the product.
Indirect Tax and Low-Value Goods Tax:
This is a tax charged on goods and services you pay your government. There are a couple of different types of indirect taxes based on your customer’s locations. The common ones include VATs (Value Added Tax), and GST (Goods and Services Tax).
Low-value goods Tax is levied in the European Union, Norway, Sweden, Australia, and New Zealand for products that fall short of the minimum order value of the given country. For example, the European Union collects tax for products with a value less than or equal to 150 EUR.
7) Optimize marketing and advertising
When you follow all the factors mentioned so far, you have a well-functional eCommerce business waiting to have your first international customer. Now, we shall tell you the ways to get your first customer through advertising and marketing.
Start with enhancing your search visibility. Google’s algorithm is attuned to detect the website location and language to bring relevance to search users. Therefore, you can optimize your website with a geo-targeted landing page. It means you are creating landing pages that are specific to your user’s region This especially helps if your user is looking for products that are in your niche.
- Use Google Analytics and Google Console: You narrow down your customer base and know how they interact with your website using these tools. Create content such as blog posts, videos, infographics, and social media posts with keywords and topical clusters. This will help you rank on SERPs and drive more traffic to your website.
- Localize your digital marketing: This is especially true for advertisements. Understand your buyer personas and create targeted ad copy that resonates with them. For example, an online florist band can localize advertisements for Maypole dance festivities in the United Kingdom, Germany, and the United States.
- Connect your business to popular shopping platforms: you can make accounts with Google Shopping, AdRoll, and Bing. Upload your inventory and set the Google Shopping Ads or Bing ads to target customers who search for your niche products.
8) Localize your brand
Localization goes beyond the boundaries of advertising and marketing. It's a whole way of rebranding your business that fits your targeted new market perfectly. Localization involves multiple components. Here are a few you can start with:
- Adapt your website language to match your new customers’ vocabulary:- According to a Shopify estimate, 80% of global shoppers prefer to shop on a website in their native language. Therefore, having translated versions of your website content (from landing pages to email notifications) is something most customers would appreciate.
- Include local currency when displaying product prices:- There are apps and extensions available in the market using which you can convert your base currency into a foreign exchange rate. For example, Shopify store owners can use the Geolocation app to detect customers’ locations and display prices in their local currency.
- Get your website's international domains as subdomains:- Get subdomains for your international websites especially for the markets you sell. This signals your targeted shoppers they are using a local version of your website and enhances trust. It also helps with automatically switching on local languages and currencies.
Top 5 Things to Keep in Mind Before Going Global
1) Be mindful of local culture
Understanding your buyer personas and the culture they follow is critical. From communicating in their language to following their cultural quirks, incorporate practices that would make you their fellow citizen.
For example, if you sell sports merchandise, football, and rugby would mean different things to people in the U.S. and U.K.
2) Be thorough about compliance
Much like tax structures, different countries have different compliance requirements. This can range from following certain labeling patterns to getting the right data security compliance from the country.
Most commonly, compliance policies revolve around returns, sourcing, intellectual properties, and permits.
3) Never lax on SEO
SEO is a core component of your eCommerce business as it helps you grow your search visibility to targeted customer segments. It is an integral part of website optimization that ultimately helps with lead generation.
Take, for instance, using SEO tools like Google Analytics to measure customer visits to your website and what they buy more often. Moreover, you can make your website international-SEO-friendly with geo targeted subdomains and hreflang tags.
4) Consider a 3PL service
Having a 3PL partner is a good way to streamline fulfillment and reduce costs and anxiety over fulfillment delays. A 3PL with multiple warehouses in different countries can help you with strategic inventory distribution. It allows you to deliver orders faster to your customers.
Given the cost involved in international shipping can be your middleman in bargaining lowered shipping rates from carriers.
5) Prepare for labeling customizations
Consumables and packaged goods require labeling changes according to the product category and marketing guidelines where you wish to sell. Most labeling customization requirements fall under specific trade rules; you can find the information on official websites.
For example, the European Commission states the labeling rules for food products exported to European countries.
International commerce is no longer restricted to big corporations. With interconnected supply chains, stronger demand for global products, and advancements in logistics, you can start selling internationally. We hope this guide will help you in creating the right strategy to launch your business into newer markets.
1) What are the best countries to sell internationally?
The best countries with strong demand for international trade include the U.S. (United States), U.K. (United Kingdom), Germany, Canada, Japan, Germany, Singapore, and Switzerland. Australia and New Zealand are also quickly becoming lucrative markets for international expansion.
2) What are the best products to sell globally?
The best products for global commerce are those with high demand, good profit margins, and easy-to-ship. Some of these include beauty and cosmetics, subscription boxes, electronics and gadgets, tea and coffee, and eco-friendly products.