Many ecommerce sellers focus their energies on their home market – and rightly so. Having a strong presence in the country you start in is important.
However, ambitious businesses will find that at some point, international expansion is the best way to drive growth.
Here’s why and how you should consider taking your business international.
eCommerce sellers are uniquely positioned to exploit international markets, dramatically increasing their audience size and revenues.
Recently released figures showed that:
• International PayPal sales growth rate trebled in the second half of 2016 for UK SMEs.
• Average order value from overseas sales rose 13% in the same period.
During 2016, thousands of small and medium sized businesses in the UK rushed to sell in new countries, as the June Brexit vote depressed Sterling prices, increasing the competitiveness of UK goods.
The uncertainty after Brexit has not deterred this confidence – eMarketer report that 78% of surveyed ecommerce retailers experienced no impact or an increase in international sales after June.
So what steps should businesses planning international expansion take to ensure the best chance of success?
Steps to Success
There’s a whole handful of considerations to bear in mind when you’re thinking about cross-border trading. Use our checklist to make sure you’ve got the essentials covered.
1: Determine how actively you’re going to pursue an international market
The rest of your strategy in the long term is going to hinge on this decision.
Are you simply going to arrange for shipping to new countries and passively allow international shoppers from those countries to purchase from your existing webstore/marketplace listings?
Or, will you invest a significantly larger amount of time and money in creating a properly localised version of your platform for those countries (for example, displaying translated eBay listings on ebay.de to attract custom from German shoppers).
2: Product-led research
There are two aspects to this: where are your products going to sell, and what products will sell well in the country you’re targeting?
If you’re looking to stick to what you know, for example if you are a manufacturer selling direct, then you’re going to need to do some digging to find out where your products will be best received.
If you’re a retailer, sourcing the right products to sell and understanding the different demand for products across different countries matters hugely.
There are businesses out there who can help you in this regard – our partner Algopix offers a service which enables users to estimate the demand for products before they purchase stock.
Free tools for product and demand research also exist, Terapeak being a popular example (though premium membership is required for some functions.)
3: Platform research
If you’re going to target a specific country, you’ll want to find out well in advance which platform is best suited to that geography.
A fantastic example is Allegro in Poland, as it is the dominant marketplace force in Poland and receives a huge amount of traffic.
How much testing you can afford to do depends on your platform. Here marketplaces have a clear advantage – given their low cost of entry and pre-existing traffic, you won’t be hit with massive upfront costs to give your products a fair chance at selling.
If you can, the ideal route starts with dipping your toe in with a small test product range, with properly human-translated listings, and establishing whether or not the demand exists for your products.
Shortcuts like machine-translation solutions exist which will enable bulk translation on the (relatively) cheap, but there really isn’t a substitute for a real person on the other end.
“the small businesses that were best placed to benefit from the influx of international shoppers were the ones who had already adapted their online stores – for example by letting customers browse in their own language, and pay in their own currency.”
– Mark Brant, Managing Director at PayPal UK
As we just covered, translation is absolutely vital if you’re committed to localising as opposed to just allowing shoppers from another country to access your existing platform.
You will stick out like a sore (and unprofessional) thumb if you’re ranking alongside native language competitors in search results or on a marketplace search. Would you buy something on Amazon.co.uk if the product listing was in a language you have little or no grasp of?
Cultural fit is also hugely important – something as simple as understanding the different payment preferences of other countries can help you avoid pitfalls. For example, in Germany, bank transfer is typically favoured over gateways such as PayPal.
This is where your research earlier comes in – you can examine potential and current competitors working in the space you want to enter, for examples of good and bad practice.
Having staff who are from the country you’re planning to sell to is an invaluable resource, one which we’ve seen bear fruit for Volo customers time and time again. Idiom and other forms of culturally specific knowledge are near impossible to fully grasp without native experience.
6: eCommerce Solution
As a general rule, most businesses who are not using dedicated ecommerce management software start to hit a wall once they’ve got one or two marketplace accounts and a website.
Manual work starts to overload the people who should be making business decisions, such as exploring new markets internationally.
To get that time back, you need automation, preferably a central system that can allows you to manage all the key areas of your business.
7: Tax and Legal
Before you jump into a market, you’ll need to have a good grasp of local laws and regulations as they could affect your business. Import restrictions and tax laws are frequently stumbling blocks for eager ecommerce businesses looking to sell abroad.
There are many expert providers out there who specialise in helping you to manage your tax requirements in the EU or elsewhere – check out the Volo Partners page for some examples (check under Financial Services for tax.)
So you’ve gone ahead, and international shoppers are able to see your products for sale – now they’re buying them. How are you going to get the product from A to B?
If you’re using Amazon FBA, you can take advantage of their Pan-European Fulfilment to order inventory directly into Fulfilment Centres throughout Europe, enabling Prime-speed delivery in many countries.
You may prefer to use a drop-shipping solution, whereby you source product within the country you’re expanding into, and the supplier themselves fulfil orders on your behalf.
This avoids the need for you to have any fulfilment capacity of your own in this new territory, but does put you at the mercy of the supplier when it comes to brand reputation.
If your testing process is successful and early phases are promising, you could even start holding inventory yourself in another country.
No Two Businesses are the Same
Ultimately, selling internationally will never happen in exactly the same way for any two businesses. There are always unique requirements and details that will impact decision making.
This means that with any partners you choose to work with in this process, you need to be certain that they understand and are committed to working with your business personally.
Setting reasonable, achievable goals and being open about the investment required to meet them is an integral part of any business strategy decision.
It’s doubly true for a significant venture like selling internationally. You should decide what the key performance indicators will be for your project, and assess progress according to those.
The reward in terms of transformational business growth is massive; but it must be earned with the investment of time and resources.
For more information and guidance, you can download our free ebook on using eBay for international selling.
Want to talk to someone about growing your international sales? Book a free no-obligation business consultation today.