Cross Border Ecommerce: 5 Strategies for Going International

Aug 14, 2018

 

Cross Border Ecommerce Selling Internationally

Long gone are the days of selling products online to people who are within close proximity to your warehouse. If you’re restricting yourself to one area, your online earnings will plateau and remain stagnant—unless you do something about it.

Luckily, in the ever-changing world of eCommerce, businesses have plenty of opportunities to target people further afield—even if they’re on the other side of the planet.

Fancy a slice of the cross-border eCommerce action?

In this guide, you’ll learn the five techniques that can take your eCommerce company global—and how you can decide whether worldwide domination is part of your business’ forecast.

What is Cross Border Ecommerce?

The appeal of making more money and growing your business through cross border eCommerce is tempting, right? But before we dive in feet-first with our strategies to go international, let’s iron-out the basics and have a clear understanding of what cross-border eCommerce actually means.

Simply put: Cross-border eCommerce refers to the capability of online stores selling their products to customers in another country.

How can this tactic set you up for success?

Well, think about the last time you purchased a product through the internet. Was it from a brand with a physical location in your country, or did you venture further afield?

If you chose the latter option, you’re not alone. As many as 70% of consumers have purchased at least one international product online, which goes to show that proximity and distance won't stop consumers from purchasing what they want through the internet.

It's up to you to provide them the means to purchase your product, wherever they may be.

The Pitfalls of Cross Border Ecommerce

If done correctly, your online store will experience even greater success on a global scale when implementing your cross-border eCommerce strategy. People from all over the world will have the chance to buy products from your site—and you’ll have a stronger business because of it.

But just like many other sales, marketing, and distribution strategies, there are initial problems you’ll need to overcome before taking your business global, including:

Logistics

Arguably one of the most important things to consider when planning world domination is logistics. It’s how your products reach a customer, after all.

  • How will you deliver the products to international customers?
  • Will you be able to decrease the costs of delivering and shipping them to your customers outside the country?
  • What's your strategy when dealing with non-English speaking clients if they have concerns about your site or their orders?

...are just a handful of things you’ll need to consider before taking your eCommerce business global—and you’ll need a solid plan of action for each if you want to make it a success.

Taxes

When you’re doing business cross-country, you’ll need to educate yourself on the tax laws of the country you’re operating in. Failing to meet the requirements for each could lead you into hot water. (And suffering with a hefty fine, too.)

Income tax, import costs and export fees could all play a role in your profitability, too.

Local rules and regulations for foreign businesses

Complicated rules and regulations of selling in a foreign country only add to the headache during your transition to cross-border eCommerce.

Finding out the different rules and regulations that govern foreign businesses is essential, but make sure you’re always on the ball.

Regulations for running a business in a foreign country can change quickly. But, having a member of your staff taking responsibility to keep up-to-speed with international laws can help your business to  stay on the right side of the law.

Payment gateways

While processing payments isn’t usually an issue for customers in your country, be warned that you might see a surge of abandoned carts and unfinished transactions if you don't offer a variety of payment gateways.

Credit cards sound like the fix to payment gateways, since most shoppers own a credit card and it's easy to use it to accept payments for their orders, right?

Not necessarily. Some buyers are picky with how they pay for their online shopping, and the additional 3D security problems that come with accepting credit card payments could cause issues for customers who are purchasing from a country that doesn’t support 3D security.

There's also a good chance that international customers will want to pay using cash in their local currency, without their credit card (which converts currencies automatically). However, offering this payment option requires technical knowledge—not to mention the added costs and fluctuating exchange rates that come with it.

Trust and security measures

People won't buy from stores they don't trust—that’s no secret.

However, since this is your first foray in cross border eCommerce, you're new to the game. The people you’re targeting elsewhere might not have the same trust and relationship with your brand as native customers do.

Unless you've kicked-off marketing campaigns to make your business known by global audiences before your global launch, expect an uphill battle of getting people to buy from your store.

Is Cross Border Ecommerce a Waste of Time?

There are several logistic problems you’ll need to deal with before being able to sell your products internationally, but don’t let that put you off.

The market for cross border eCommerce is greater than ever.

The estimated global cross-border B2C market for 2018 is $676 billion, with 715 million shoppers looking further afield to find products or services online:

Cross Border Ecommerce Sell Internationally

Given the sizable market of cross border eCommerce, taking your online shop on a global scale is undoubtedly one of the best routes to grow an online business.

5 Strategies to Take Your Ecommerce Business Across the Borders Successfully

Are you ready to take on your global competitors and reap the rewards that come from cross-border eCommerce?

Follow this five-step process to start your quest on the right foot:

1. Prepare for your transition by starting small

While the move to selling internationally can provide a huge windfall, there’s an element of risk.

We’ve already discussed how the process of going global will present new issues to your eCommerce business. But, don’t be disheartened—it’s important that know of these dangers, but overcoming them isn’t as tricky as you might initially think..

So, start your global domination on a small scale.

You’ll experience these problems first-hand, and resolve growing pains before committing to international sales.

For example: International shipping will disrupt your current workflow because selling internationally requires you to jump through new hoops. It won’t be as simple as sticking a $1 stamp on a postage box, and it could take a few days to process the customer’s payment.

Start by accepting a handful of international orders monthly and get to grips with the process. Not only will you get a rough understanding of your capabilities (for example: do you only have enough staff to fulfil 20 international orders?), but you’ll find the costs, fees and taxes associated with each country you’re selling in.

Granted, starting small isn’t the most exciting way to expand your business cross-border, but it’s the safest and holds less risk.

2. Determine which regions you need to sell to

When expanding to the global market, you need to do your research. You can't just choose regions and countries out of the blue just because you had your best vacation there. (Or even worse, because it’s a place on your bucket list.)

There needs to be a good explanation behind your plan on setting up shop in any new country or location. You need to make sure you’ve got a target market there.

Let’s take China, for example. Selecting them as one of your primary destinations for cross-border eCommerce seems like an easy decision, right? Its eCommerce economy stands at almost $60 billion—the biggest in the entire world:

Retail International China Stats

Sound too good to be true? It might be.

Chinese consumers themselves take advantage of cross-border eCommerce to bypass the regulations of purchasing items internationally. As a result, China is planning to establish stringent rules that will make the life for eCommerce site owners operating in China much more difficult.

Simply put: It's not as cut and dry as choosing the biggest market. You need to put thought into your decision so you can make a profit from setting up your shop in that country.

When choosing a location to expand to, consider:

  • Language: Are they an English-speaking country? If not, are you at least fluent with their language? Or do you need to hire more people who can ease the transition for you?
  • Payment methods: Do most of the customers pay local currency that your site doesn't support? Is it worth adding their preferred payment gateway in your system to accommodate their purchases?
  • Cultural norms: Do the customers exercise norms and customs that don't reflect your company’s views and values? What are the regular purchasing habits for someone in that country?

The idea is to find countries with the least path to resistance that will help grow your bottom line, and the answers to these questions determine whether the country you’re exploring will be a good fit for your cross-border eCommerce strategy.

Remember: Although it’s a tough job to crack a high-risk foreign market, there are cases when the potential earnings is great—and that the risk of language barriers and difficulty in payment methods will be worth it.

Practice due diligence and be exhaustive in your market research so you can find the best match for your business.

3. Localize your eCommerce website

Found the perfect route to global expansion? To make sales, you’ll need to accommodate the people from the region you built your online shop on. Your existing site, which may only be geared to your original customers, won't be enough. You need to develop and publish a local version of your site to your new audience.

Why? Because you want to make foreign visitors feel welcome, and that they can trust your website. That’s not always possible if you’re welcoming them to a U.S-based site.

The first thing you’ll need to consider when building a local version of your eCommerce store is the local language of your target customers.

If the country you’re expanding to is comfortable speaking the English language, your transition will be much easier. However, if your audience prefers using their native language, your entire website will need a complete overhaul if you’re looking to communicate with them well.

You’ll also need to create that caters to their sensibilities when selling internationally. Knowledge of their national holidays, culture and general disposition can help with this. For example: Can you offer during their national holidays to increase sales? On your social media accounts, can you engage with local customers to celebrate their cultural identity?

By communicating with them on a level they understand through your website and other online assets, you can build trust with foreign potential buyers faster—and enjoy more sales, as a result.

4. Expand your payment gateways

Whatever payment gateway you’re using to process online payments, you’ll need to expand as you go cross-border. You can't stick to a payment gateway you're comfortable with—you need to cater to your potential new customers.

Why? The answer is simple: If they can't buy from your international site using their preferred payment method, they’ll head to another site that does.

Setting up different payment gateways allows you to be flexible and helps increase your international conversion rate, while also reducing cart abandonments.

Payment gateways like Stripe, PayPal and Payza can handle cross-border transactions, but always remember to double-check the one you select works in the region you’re expanding to.

For example: Brazil has payment gateways exclusive to them—such as PagBrasil and PrimeiroPay. Would your local customers prefer (and trust) these payment gateways more than Stripe? If so, consider using this on your local site.

You may also want to consider WorldFirst which offers fantastic exchange rates and fast transfers, too—making them a great choice for international eCommerce businesses who don’t want to be limited by lengthy payment processing.

5. Store inventory in warehouse

If you’re selling products online, local distribution will be one of your biggest concerns when setting up shop at a different location. You’ll need to determine how to transfer your products from your company’s HQ to another country (potentially on the other side of the world).

When working through this, you’ve got two aims: To decrease the time and costs of shipping, and delivering the best products to local buyers.

If the products stay at your company’s headquarters for too long, the friction between calling in the orders to the local store will be much more costly. That’s not going to do any favors for customer service.

You can resolve this problem by renting a warehouse in the region you’ve set up shop in, so you can hold all of your stock locally. But, before doing this and committing to a 10-year agreement, you need to:

  • Operate in a country with low risk.
  • Read the T&Cs of your rent contract carefully.
  • Understand the most purchased products so you can stock your inventory—and not run out of stock for your key items.

Final Thoughts on Taking Your Business Global

Taking your online store to a whole new level by going global is not something that all eCommerce site owner can do. It takes hard work, intense market research, and some elbow grease to make it work.

However, as with most opportunities to grow your business and make more money in the long run, you can’t pass-up the chance to start selling your products in a foreign market.

If you're serious about making a mark with your eCommerce site, make cross-border eCommerce a strategy. Use these five strategies so you’re not betting on a losing horse, and that your international domination will be successful.

Elise Dopson

Written by Elise Dopson

Well versed in the B2B, SaaS, and marketing realms, Elise helps merchants navigate the ever-changing world of online channel management.

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