Mike Ward, Chief Revenue Officer at World First USA, Inc. breaks down the most important considerations for successfully taking your business to new markets.
With more and more consumers around the world turning to the Internet to make purchases, the incentive to expand your business abroad is stronger than ever. 24% of frequent online shoppers purchase from abroad, with half looking to the United States.
Global expansion can be game changing. The swelling middle class population in emerging markets brings with it an influx of new money, though eCommerce in developed nations in Europe and the US are far from saturated.
Improving technology has made it not only easier for clients to access your goods, but also more efficient for businesses to expand. Today, even the smallest of companies can become mini-multinationals. If you’re considering going abroad, you will need to navigate several critical time and money expenses. Many entrepreneurs try to test things out by going international on the cheap with costs like localization and translation, but in my experience this strategy almost always fails, and it’s difficult to rebound from such a failure.
To avoid this fate, consider these tips on where to invest your time and money.
Choose Your Market Carefully
In brick-and-mortar it’s all about location, location, location, and the world of eCommerce isn’t so different. Give the same consideration to your digital marketplace as you would a storefront, as there may be local marketplaces you’re not familiar with. Amazon is the most obvious digital marketplace, but we work with over 50 worldwide.
If you’re not sure where to start, ask your international suppliers who are likely experienced in key markets in areas where you might be unfamiliar.
Create a Complete Experience
Because many customers will meet you for the first time online, pay as much attention to your online presence as you would a display window at a brick-and-mortar spot on Main Street. This starts with mobile. It’s much easier to create a stripped-down mobile site and build up for a desktop platform than to start with desktop and then optimize for mobile.
Think you can skimp of responsive design in emerging markets? Quite the opposite. For instance, in India, 41% of eCommerce sales, representing over $6B are on mobile, compared to 30% in the US. Your website should mimic the core aspects of the in-store experience, and vice-versa. This means filling your website with engaging photos that work on both desktop and mobile.
Customize for Culture
While you do want the shopper to have the same experience across channels, you might not necessarily want the same experience across countries. Ask yourself what your customers want to see — and consider that this might not be the same in every market.
If you’re not familiar with the buying personalities of residents, enlist a consultant who is. The minimal upfront fees will pay dividends when your product sells quickly. Cultural insight can inform you about things like China’s Singles’ Day, which in 2015 led to greater sales than Black Friday and Cyber Monday combined.
A new market also means a reconsideration of your pricing strategy. Take into account how much additional shipping could cost, which efficiencies you might experience at greater scale, and what locals are willing to pay for a given product. In many cases, entrepreneurs are able to charge a premium for a foreign good, simply because of its scarcity in the new market.
Engage Strong Partners
Whether it’s accounting for taxes, product returns, or navigating exchange rates, going abroad requires getting friendly with a host of partners. Some will be worthy-but-pricey investments, while others can save your bottom line.
Regardless of if you’re using traditional or digital sales platforms, how you manage currency risk is a key consideration. Unnecessary transfer fees and unfavorable exchange rates can seriously damage your margin. Currency transfer specialists often offer significant savings over the marketplace default (banks), so be sure to speak to a specialist.
In contrast to currency transfers, attorney fees have a less direct way of saving your bottom line, but are still a must-have conversation. If you’ve avoided speaking with a tax attorney about your domestic business, the procrastination is over. Taxes change based on country, product, product origin, category, and much more. You’ll want an expert on your side.
Other third parties include 3PLs (third-party logistics), which help you manage the inventory and shipping of products to your customers, as well as returns back to your warehouse. The right specialist can streamline your logistics to save time and money, and ultimately build a profitable mini-multinational. When looking for the right specialist, vet carefully and look for companies that provide custom plans and clear feedback to help you navigate any unexpected hurdles.
This article comes from our magazine “E-Commerce Solutions – Insights for Online Sellers.” Download now to read other best practices on selling online!
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