How to start selling internationally

There’s never been a better time to think globally.

Cross-border e-commerce is expected to top $1 trillion by 2021, according to BI Intelligence, as consumers increasingly turn to international marketplaces to purchase products they can’t get at home.

In fact, a recent PayPal study discovered that a lack of access to goods domestically is one of the biggest factors driving cross-border shopping. For instance, Chinese consumers buy everything from infant formula to health supplements to cosmetics online from overseas manufacturers. Better prices and more affordable shipping are big drivers of cross-border e-commerce, too.

In response, more merchants are taking their businesses global, eager to extend their reach overseas and capture a wealth of new customers.

Whether you’re thinking about growing your e-commerce business internationally for the first time, or exploring a new cross-border market, you must develop a strategy before you drop anchor in new waters. Here are four key areas to contemplate.

1. Select markets that make the most sense for your business

First thing’s first, do your homework and determine who your international customers are.

PayPal research found that Portugal, Ireland and Peru are the countries where cross-border shopping is most prevalent, while China is the most popular destination for global online shoppers. It’s also worth noting that clothing is the most popular category for cross-border purchases globally, followed by electronics.

Consider the following: Where is there a demand for what you’re selling and why? Who’s your competition in that market? Are there any seasonal purchasing patterns? Will you have to adjust your pricing?

 

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2. Think about payment options

More than two-thirds of online shopping carts are abandoned, as per research by the Baymard Institute, which also found that offering too few payment options on the checkout page was the reason for a large portion of those missed opportunities.

To successfully scale internationally, you will need to accept payment in the method that your target market prefers. Again, it’s important to do your research as there are hundreds of payment types in e-commerce and preferences vary depending on the country.

For instance, almost all e-commerce payments in Spain are by Visa, MasterCard and American Express, according to Pitney Bowes, while India and other Asian countries have a strong preference for cash on delivery.

You also need to take local currencies into account when expanding overseas. If you can’t offer customers the option to pay in their local currency, make sure to show the conversion so they can see what they’re paying.

3. Get to grips with tax rules and regulations

Selling internationally isn’t as straightforward as simply selecting a new market to expand into. You also need to be aware of that country’s regulations regarding cross-border e-commerce and how they apply to your products.

Find out if duties and taxes will impact the landed cost (the total amount you pay to deliver an item) of any products you plan to sell internationally and let customers know about any additional fees up front.

On the bright side, if your country has a free-trade agreement in place with any of the markets you intend to sell into and your product category is covered, tariffs could be reduced or eliminated entirely.

Customs regulations are another reality of cross-border e-commerce. All international shipments must have a customs form attached to the outside of the package to help officials understand its content, value and purpose.

4. Establish your international returns policy

With a cross-border sale comes the possibility of an international return and legislation on how these are handled will vary depending on the market.

Be sure your returns policy complies with all applicable local laws and be clear about any restocking or return fees you’ll charge, as well as whether you’ll offer a full refund or store credit.

To manage cross-border returns cost-efficiently, consider setting up a local returns center or partnering with a logistics service that can offer a variety of returns options to customers, refund them faster and simplify how you manage the process.

Familiarize yourself with Amazon’s rules around international returns if you’re planning to go down that route: when listing on an international marketplace and fulfilling items on your own, you must provide customers with an in-country return address or offer free return shipping. Alternatively, signing up to the company’s Fulfillment by Amazon (FBA) program means you will automatically have the required local returns address.

A clear returns policy gives global shoppers a feeling of security, particularly if they’re purchasing something from an unfamiliar brand. But having a well-thought-out returns policy is only part of the equation. Another crucial aspect to consider is customer support. Since you’ll be managing queries from customers in another time zone, you’ll need to consider how to handle issues that come up outside office hours.

By investing in a support solution such as xSellco’s help desk software, you can fulfill customer expectations for timely communication, no matter the hour, with an automated, human-like response. In addition, an auto-translate feature helps you communicate with international customers without the need for multilingual agents.

That said, to make your international expansion a success you need to identify which marketplace will be most profitable for your business—and there’s more to cross-border e-commerce than eBay and Amazon.

Find out why Newegg Global should be on your radar in our webinar with Pivot International on Tuesday, September 26 at 10AM ET/3PM BST and discover how to connect to 30 million customers in 50 countries around the world.

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