One question Hendrik Laubscher gets asked by people all the time is ‘How do I determine how to expand internationally?’ Here’s what he tells them.
It can be a conundrum for small to medium-sized businesses deciding how to take their business to the next level. How should they grow? What should they do next? We live in an era that allows for sellers that can sell on many marketplaces without the need to pay for additional advertising costs.
As a business owner it is important to be honest with yourself and consultants. Why? Any detail not discussed will become an issue. Are you selling on many – if not all – of the local e-commerce marketplaces and do you know their impact on your business? By impact, I am referring to conversion rates, listings costs and profit margin for your business. If you are aware of your analytics and are on most marketplaces then it is time to look at going international.
The next question is what is your direct competition doing? It is important to determine what their strategy is as there might be reasons as to why they have not gone international themselves. You need to be aware of the market you wish to enter and the relevance to that market for your products.
Most marketplaces require a registered business in the specific location as well as products to be located in their distribution centers. Certain marketplaces do not allow international merchants on their platforms. So doing your homework prior to entering a new marketplace is imperative.
When selecting a marketplace, there are five things to keep in mind.
1. What is the time difference to the marketplace from your operation?
Ideally you want to ensure that the first market you enter has a time difference that’s not too great, to ensure that you can react to issues.
2. What are the local import duties for the items that you sell?
This varies from country to country and certain items are banned from being sold in locations due to local laws.
3. What is the exchange rate difference between your operations and that of your potential customers?
This is important to consider as this will affect how you will price your items in comparison to local sellers.
4. What are the local marketplace requirements?
Product data, etc.
5. Are you able to scale internationally with a current marketplace?
Amazon and eBay allow merchants to move into more locations.
Taking your business international is not to be taken lightly, nor is it to be done when your business is struggling as it may just make things more difficult. Global e-commerce should be on your road map but – if this doesn’t sound too much like stating the obvious – do it right, do your research and don’t rush into it.
Hendrik Laubscher is a gadget connoisseur and e-commerce expert.
All views and advice provided in this article are opinions of the author and not those of World First.