Global online markets are growing and that means there is more opportunity for retailers like you to expand internationally. Technology makes it easy to reach customers from all around the world, but it’s important that you have a plan. The benefits of expanding your business to overseas marketplaces far outweigh the drawbacks – especially when you are prepared for them.
The following are some of the common pitfalls to avoid when entering the global market.
Not Pricing Competitively
If you are already selling products on online marketplaces, then you know how competitive pricing can be. It’s not unusual for dozens of retailers to sell identical items with the price being the only differentiator. International marketplaces are no different. For example, you may compete with sellers from China who have direct access to manufacturing. That means they usually have less merchandise shipping fees, and can therefore, sell their products at a much lower price and still be profitable.
Additionally, when selling worldwide, you have to consider the value of money in the regions where you are selling products. For example, spending $20 on a product online may not be a big deal for someone in the U.S., but for someone in India, that same $20 may account for a proportion of someone’s salary that is too significant to spend.
The way to avoid this pitfall is to do your homework. Research the regions that you are going to sell in. Know how much shoppers are willing to pay for each product you sell to stay competitive in different markets. Altering prices based on region is key to being successful. You may find that some products are just not feasible to sell in some regions.
Not Understanding International Shipping
There are two shipping problems that new international sellers often fall into – a high cart abandonment rate and losing money on shipping costs.
High cart abandonment happens because of high shipping costs and cross border taxes added in to the total cost at the end of the shopping cart process. The best way to combat this is to explain your shipping fees upfront. By adding them to your product description pages, potential customers will know what costs are involved before they put products in their carts.
Losing money on shipping fees happens when you don’t understand the shipping rates, rules, and regulations for sending merchandise overseas. You may think that you are charging enough only to find out that there is a policy that you are unaware of that cuts into profits.
Fixing this pitfall is easy when you work with international shipping providers. They are fully aware of rules, regulations and fees. They will also know the complexities of duties and taxes. Having a provider that takes care of the shipping logistics will help ensure that you have satisfied, repeat customers.
Another solution for shipping dilemmas – especially for smaller ecommerce businesses – is to use dropshipping services. That way you don’t have to handle shipping. Your products are shipped directly from the supplier to the customers.
Not Planning for Language Barriers
This is likely one of the biggest challenges you will come across when expanding into international markets. If you are dealing with different languages, you must localize the website, products, and customer service to avoid alienating foreign customers.
Being able to communicate in various languages isn’t something that most people are able to do themselves. Don’t let that discourage you from expanding globally. There are companies that help with translation services for all the languages you need.
Not Using a Global Payment Provider
Not only will you deal with multiple languages, you will also deal with multiple currencies. This presents a problem when accepting payments because the process may end up involving three different currencies for a single transaction. The payment has to move from the customer to the ecommerce site and then to you. Conversion rates fluctuate which means that at any one of those three points, you could lose money.
The simplest solution for this pitfall is to use a global payment provider. These companies will provide local currency accounts in the countries that you sell, so that you can choose to transfer marketplace profits to a U.S. bank when exchange rates are most beneficial to you.
Don’t Be Afraid to Sell Across Borders – Just Be Aware
Even though selling internationally has some pitfalls to overcome, getting into the global marketplace and being successful is easier than you may expect. Be aware of the challenges and have a plan for how to deal with these common pitfalls will ensure your success.