There are many things to consider before selling products or services in another country over the internet. If you are trying to expand internationally, learn if selling online is right for your company.
Q: Is online international selling right for your company?
A: It is important to think through your international strategy. Do you want your website to just provide information to international customers or do you want to conduct international transactions online? Do you want to sell directly on your website, or would you like to use an e-commerce platform like eBay, Amazon or Alibaba?
Potential customers seeking all kinds of industrial and consumer products conduct research and compare suppliers online, but not all make purchases online. If you are selling a standardized product (or one with a set list of customizable options) that a customer orders or re-orders in quantity, and if shipping costs are relatively low compared to the product price, there is a greater chance that customers will buy online. Highly specialized products that are built to order may not lend themselves to an online catalog sales approach, but a strong online and social media strategy can help with increasing international sales for even those kinds of products.
Q: Do you have to be ready to sell everywhere at once?
A: Even though it’s called the worldwide web, you don’t need to accept online orders from all over the world at once. It’s a smart idea to review multiple export markets and select those with the greatest potential to focus on whether you’re using distributors, an inside sales force or an online platform. You don’t want to overpromise on what you can deliver and end up with a dissatisfied customer, nor do you want your profit margin eliminated by extra costs that you hadn’t built into your online price. Once you feel confident in your ability to satisfy customers in one market, you can take what you have learned and expand into the next one.
Translating your website or establishing country-specific landing pages can make it obvious in which countries you are seeking business. Canada is often the first market U.S. firms target for online sales. The Canadian e-commerce market amounted to $29.6 billion in 2016, and over half of Canadian online shoppers made at least one cross-border purchase in the past year.
Q: How do you make your website appealing to online shoppers in other countries?
A: Just as in traditional export marketing, successful online marketing requires you to consider your customers and determine if their needs and preferences differ from country to country. Consider whether your customers can make buying decisions based on English-only information, or would prefer to have product descriptions and ordering instructions in other languages. Localizing your website to fit the tastes and expectations of your international customers can improve results.
To make it easier for customers to find your website, consider using geo-targeted landing pages that will rank better in international searches. Even if customers in other countries share your language, search engines direct them to content that is most relevant to them based not only on the language of their search query, but also based on geographic proximity.
Q: What needs to be considered when planning international order fulfillment?
A: Make sure you set realistic expectations. While overnight delivery from Wisconsin to California may be routine, shipping the same product to a second-tier city in China will probably take more time. Stocking popular items in regional warehouses or using the services of a third-party logistics (3PL) or fulfillment house can reduce those delivery times.
Online shoppers do not like being surprised by extra fees or costs. They want to know the full cost of receiving the product at their door when making their decision to buy. Factoring in any additional costs for expedited delivery, customs clearance and taxes is crucial. Talk with your transportation company or freight forwarder early in the planning process to see if they offer plug-in tools to help calculate the full cost of door-to-door service.
Also check with your accounting firm to see if selling directly to your end users opens your firm to a tax liability in a foreign country. Don’t forget to check the consolidated screening list (CSL) for parties facing U.S. Government restrictions on certain exports, reexports or transfers of items before making an export sale or shipment.
Since taking orders online involves the exchange of personal information, U.S. businesses selling into the European Union will want to become familiar with the EU-U.S. Privacy Shield, which will enable U.S. companies to easily comply with EU privacy laws meant to protect European Union citizens.
Q: How do you get paid on international transactions? Do you have to accept payment in foreign currencies?
A: While Visa, MasterCard, Discover and PayPal are common payment methods for online domestic sales and are available to international customers, you may want to consider additional methods that are common in other countries, such as real-time bank transfers, direct debits and mobile payments. Online customers will want to see prices in their local currency or be able to switch back and forth between the price in the buyer’s and the seller’s currency.
You also need to plan on how to handle returns and refunds. Different parts of the world have different regulations and expectations on how returns are handled. For example, return rates for German shoppers’ online purchases are three to four times higher than those of British shoppers.
Q: How can WEDC help companies establish an online business-to-business presence?
A: WEDC’s global network of authorized trade representatives can provide information on common business practices and expectations in key markets around the world. WEDC’s International Market Access Grant (IMAG) can be used to offset costs associated with foreign-language translations and website globalization or localization for target markets. For more information on WEDC international trade services, contact the staff person responsible for the region of the world or program that interests you. You may also want to check out the chapter of “A Basic Guide to Exporting” that is dedicated to e-commerce.