Expanding your online sales internationally can be highly beneficial, but it comes with challenges. While cross-border ecommerce can increase market share and boost global brand visibility, businesses must be prepared for the complexities involved. To fully capitalize on the opportunities of international ecommerce and diversify your business, there are several key considerations for shipping small parcels overseas.
Taxes, Tariffs, and Duties – These vary from country to country and deserve advance research before you apply that label. Discover more about international shipping and trade agreements to help you decide which countries are right for your business.
Foreign Exchange Rates – The foreign exchange rate determines what one currency can be exchanged for another. The values of currency rise, and fall based on economic factors like supply and demand, value of resources/products, politics, etc. A large rate disparity between currencies is likely to impact a seller’s success overseas.
Payment Processing Fees – Large credit card companies typically charge additional fees to process international goods sold at different exchange rates. These fees drive up the cost of goods and can be hidden from the customer.
Fraud – Cross-border transactions can be a magnet for fraudulent activity. Ensure you have robust fraud detection systems in place, including address verification and credit card approval processes, to safeguard your business from potential scams.
Long Shipping Timelines – Sellers need to be aware that international shipping timelines will be extended and can be delayed or stopped if packages are not properly addressed and labeled. The longer the journey, the more opportunity for something to go wrong.
Cumbersome Returns Management – Having a convenient returns process becomes a challenge when shipping internationally. There is likely going to be a lengthy shipping time and increased fees.
Challenging Customer Service – Good customer experience is invaluable to building brand loyalty. Providing customer service on an international scale can be challenging in language barriers, support formats (phone/online/chatbot/email), response time, etc.
Web Presence
Cross-border ecommerce sites have additional requirements compared to domestic ones. Savvy sellers might operate multiple sites tailored to each country, or you might prefer a single site that can be adjusted based on the buyer’s location. This includes updating translations, currencies, shipping rates, and size charts to meet the needs of international customers.
Another option is selling through third-party marketplaces like Amazon or Alibaba. Each marketplace has its own unique requirements and fees for listing products and storing inventory in their warehouses. With hundreds of marketplaces to choose from, some cater to niche buyers based on product type and location.
One of the key advantages of using a marketplace is the ability to start selling online quickly. Unlike a standalone website, marketplaces already have established traffic and SEO attributes. However, this also means that competitors can quickly enter the same space, making pricing strategy crucial. Some marketplaces also offer storage options, which can reduce or eliminate shipping costs for buyers.
Getting Started
Cross-border transactions are projected to grow by 107% between 2023 and 2028, reaching a total of $3.3 trillion. For an e-commerce business, this represents a significant opportunity that shouldn’t be overlooked. To capitalize on this growth, start by researching your options and requirements within your home country. Assess whether your business is currently successful and identify the reasons why or why not. Then, investigate which countries are most likely to buy your products and what specific requirements you’ll need to meet.
It’s important not to invest time or money in markets where success is unlikely due to factors like duties, taxes, currency exchange rates, or other fees. Conversely, some countries may offer significant potential to help your business thrive for years to come.
Conclusion
Expanding into international ecommerce can open doors to exciting opportunities and untapped markets, but it’s not without its challenges. It’s crucial to approach cross-border ecommerce with a strategy to overcome hurdles and truly diversify your business. As the global ecommerce landscape continues to grow, positioning your business to navigate these complexities will not only help you avoid potential pitfalls but also enable you to capitalize on the vast opportunities that international markets offer. With careful planning and a proactive approach, you can successfully cross borders and drive your business to new heights in the global arena.