The US is a prime destination to consider for overseas expansion, so Laura Lane of ChannelAdvisor gives her top tips on how you can make it work for your business in an article that appears in our latest e-info magazine for online sellers.
The vast size of the US e-commerce market (currently estimated at around $350 billion) and our shared language and culture makes the US ripe for international expansion. And US shoppers seem keen to buy from UK merchants: an estimated one out of every five online shoppers in the US bought an item from a UK website last year. These were often items they couldn’t get elsewhere.
Marketplaces are a logical route to the US market
Online marketplaces are a great way to start selling in the US: 80% of online shoppers in the US use them. No prizes for guessing that the most popular marketplace by far is Amazon? In 2015, Amazon welcomed an estimated 175 million unique monthly visitors to its US site. eBay also has a big presence in the US. There were around 122 million visitors to the site in March 2015.
If you already sell on eBay, you could test the market by offering delivery to the US from your current eBay account – or opt to list directly. Remember that if you list directly, price in dollars and use American English. For example, US consumers search for ‘pants’ rather than ‘trousers’.
Other US marketplaces to consider
Established in 2010, Newegg boasts around 25 million registered users. No longer just a marketplace for affluent ‘techies’, Newegg now offers all types of products – from office supplies and sporting goods to automotive and industrial products.
The Sears marketplace gets around 2.4 billion page views a year. Similar to the famous brick-and mortar department store, the online platform offers a wide variety of items, from clothing and sports to jewellery and toys. In order to list, you need to pay a monthly membership fee plus commission (which is determined by category).
Rakuten is one of the biggest e-commerce companies in the world, with 18 million+ customers and 17 million items listed on the .com site. The platform has transformed from a gadget geek’s paradise into a marketplace for branded goods.
Popular categories include health and beauty, home and garden, jewellery and toys. With no inventory of its own, Rakuten won’t be competing with you for business.
Best Buy launched in 2011 and receives 31 million unique visitors a year. Sellers can take advantage of ‘spotlight’ opportunities (such as Best Buy Deals of the Day), and customers can participate in the Reward Zone loyalty programme. At present Best Buy approaches merchants directly to list, but you could ask to be considered.
Newcomer Jet.com launched in 2015 with a business model that rewards customers for buying in bulk. To sell on Jet, you need a US address, a US bank account and US-based operations. You will also need to pass a screening process (Jet checks out your online presence and feedback metrics on other marketplaces).
Marketplace fulfilment programs can help with logistics
Amazon offers fulfilment support to sellers in the form of Fulfilment by Amazon (FBA). FBA provides you with a comprehensive logistics package that includes delivery from the UK as well as world class customer service provisions. Opting for the programme also gets you access to big-spending Amazon Prime members (currently rumoured to be around the 80+ million mark).
eBay also offers a comprehensive fulfilment programme to sellers: the Global Shipping Programme (GSP). You simply send your items to a UK address and let eBay do the rest, from paperwork to an international tracking service. Newegg can also take charge of fulfilment on your behalf. Opting for a marketplace logistics programme will help keep your customer ratings high. With Amazon FBA, as all customer service and delivery is dealt with by Amazon, any complaints will not impact your ratings.
For eBay GSP, once you’ve shipped your product to the eBay distribution centre, no delays impact your metrics. This is no small consideration, since 83% of US online shoppers say ratings influence their decision to buy, compared with 68% in the UK.
Review your tax situation
Tax can be a complicated issue in the US, with rates varying across states from 1% to 10%. If liable, you’ll need to charge the correct rate on your sales, then remit this tax to the right authority. We recommend discussing your individual tax situation with an expert who can focus on your specific circumstances
Laura Lane is the Senior International Marketing Manager at ChannelAdvisor, which helps businesses optimise both their marketplace and digital marketing strategies.