Key points:
- Trellis and Signifyd’s quick guide to international ecommerce contains suggested resources and platforms for essential retail functions.
- International selling isn’t just about great products and competitive prices — retailers must show they understand how to sell in their new markets.
- Retail leaders can’t handle the complexities of cross-border commerce on their own. Strategic partners can help.
Cross-border ecommerce is growing in popularity for retail leaders. New challenges come with each opportunity when retailers explore their options across borders. International selling may seem easy: just add products to your site and invite anyone to buy from you. Works like magic, right?
The reality of cross-border commerce is a lot more complicated. There are many layers to a successful international ecommerce strategy with complex operations.
Signifyd has teamed up with our partner Trellis to share this guide for preparing a successful cross-border commerce strategy. Here are some critical functions to get right for international sales — essentials like logistics, legal and marketing are only a few.
Shipping
Even a retailer with a rock-solid U.S. shipping operation is not necessarily prepared to ship internationally. Applying domestic shipping strategies to worldwide orders is a quick way to fail. There are two main reasons why international shipping is so complex and costly:
- Shipping rates: It’s tough to know how to charge customers appropriately for their orders. One method is to effectively calculate rates on your website in real time. You can show customers their rates up front and ensure that you don’t lose money on shipping.
- Shipping carriers: Find the right shipping carriers to get your products to customers in other countries. Using a carrier that can provide the best rates and shipping times offers consumers an essential feature for cross-border customer experience.
Shipping is one of the most complex and challenging aspects of international commerce, but shipping experience management platforms like ShipperHQ and ShipStation can help.
Payments
Payments are not as simple as you think. Different currencies and exchange rates create a barrier for customers shopping worldwide. Many countries favor different payment methods. For example, not everyone is used to entering their Visa card information into an online payment form.
There’s no one-size-fits-all payment method to cover each type of international customer. Smart retail leaders must understand retail culture in their new markets — or risk wasting their investments when their strategy fails to connect with customers’ shopping norms. Countries in Europe, for instance, are adopting payment platforms like Klarna to pay for purchases later and to take advantage of installment options.
Invest in payment strategies that work for the countries you sell in. It’ll pay off in the end.
Taxes
Like other financial considerations, taxes are extremely complicated in the U.S. It gets even more complicated when you start thinking internationally. What works in one country or even between a group of countries might not work for other international retail relationships.
It’s best to treat taxes like you would cross-border shipping: Do your homework and learn what works best in your new market before you attempt to start selling there. Be agile and prepare to change up your strategy based on the target region and culture. Work with platforms and solutions that are known and trusted in each country. Ensure you have a strong strategy in place for taxes in each country or use a tax management platform that works well there.
Tax compliance platforms like Avalara are a good start.
Localization
Localization is one of the trickiest (and most overlooked) technical complexities in international retail. It’s not enough to build a website that caters only to one language and accepts only one currency. A website that speaks directly to consumers in their native languages is the key to attracting and retaining customers. They’re more likely to trust your business if you prove that you understand customer needs.
One option is to build separate sites for each locality but this can be expensive and complex, as many countries and regions have different language and cultural needs within their borders. You also need to link them together so that users can get to the right site or store view.
Ecommerce systems like Magento have robust multisite functionality for managing one site that can scale to many different regions by customizing each website and store view within the Magento instance. Platforms like Zonos can help localize your ecommerce website without the heavy development burden.
Fraud
Fraud protection is a key tool for reducing risk. Expanding internationally opens your exposure to fraud — and can reduce your legal options in other countries.
The fear of fraud causes retailers to overcorrect and turn away good orders. Cross-border orders coming from unfamiliar customers outside the merchant’s home country carry the fear of the unknown. But as it turns out, the percentage of fraud in domestic and cross-border orders is virtually the same. But, fear of fraud causes merchants to turn away 6.8 percent of cross-border orders, compared to 2.9 percent of domestic orders.
New and popular ecommerce websites face higher fraud risk. Effective marketing and advertising brings more online traffic and attracts more attention to your website. Even when the plan to grab more visitors works, some of the visitors aren’t good.
Fraudsters know what to look for on online stores. They know that larger corporations have more robust security and are more experienced at detecting and preventing fraudulent orders. New ecommerce companies likely have little to no awareness of online fraud and how to spot fraudulent orders. This, combined with a new online merchant’s eagerness to accept orders, translates into great opportunity for fraudsters.
Fraud protection platforms like Signifyd can help manage your online orders, with order automation, instant decisioning and guaranteed fraud protection that makes merchants financially whole for any approved orders that turn out to be fraudulent. . Choose your fraud protection provider wisely, based on what your business needs to succeed for international orders.
Inventory and logistics
Managing inventory domestically is hard enough. Now try fulfilling orders in other countries. Think about implementing a strong order management system (OMS) or enterprise resource planning (ERP) tool to manage inventory and logistics. Look for systems that work for your ecommerce store. You may also want to look into third-party warehouse solutions in other countries.
Start strong by preparing an inventory plan that can scale efficiently in each region before launching your ecommerce operations in new markets.
Culture
Beware of culture shock. Culture can have massive impact on your business — even within the U.S. We live in a multicultural, global society with nuances that can trip up the unprepared.
People in other countries work differently and expect different things. How you position your product could be the difference between life or death. The one-size-fits-all approach doesn’t work in today’s rapidly evolving world. Marketing slang that would would work in the U.S. could kill your sales in another country.
It’s impossible to know everything about a new culture, so turn to local experts and consultants. The best teachers are the people who live, work and shop in your new market. Listening and learning go a long way in avoiding ecommerce culture shock.
Legal
When you take on a cross-border ecommerce project, you also assume the liability of doing business in a place you are not familiar with. Different laws lead to unique consequences. The unknown can quickly sink your expansion plans if you’re not prepared with a tight legal strategy.
You likely already have a good legal team at your disposal. Double check with your current legal resources and consult with experts in international commerce to make sure you’re not crossing any legal boundaries in your cross-border expansion.
Hiring and staffing
A local presence in your new markets go a long way as you grow. Hiring in other countries is different and requires a much different approach than hiring domestically. Workers in other regions have different needs and priorities: some might expect more time off in one country, while others in a different country may require higher pay. Holidays and observances can impact your workforce too. And don’t overlook time zone differences when communicating with key people in your new markets.
Figure out how to hire and staff in these areas by preparing a personnel strategy that will attract the talent you need and serve the essential functions of your business. Just like with the other items on this checklist, local resources and people can be a huge help. Maximize your connections in your new markets by leveraging the local talent.
Marketing
Marketing is the last item on the list, but it’s definitely not the least important. Marketing to Americans is very different than marketing to folks in another country. Even if your new market uses English as a primary language, the same messaging that works in the U.S. won’t work somewhere else without some tailoring to fit the needs and expectations of those shoppers.
People in other countries expect different things and are used to different types of marketing. Some channels work better than others in different countries. Social platforms you may have never heard of have huge reach in other countries — like the explosion of social shopping in China.
Marketing communications and advertising is highly dependent on culture, which is hard to interpret for outsiders. Consult local professionals or consultants with experience in your target regions to get the best strategy per channel.
Conclusion
International expansion can bring new revenue streams and expand your reach beyond your comfort zone. A smart cross-border strategy requires a lot of work — but you’re not alone. Ecommerce leaders have access to a growing number of platforms, apps and other resources for international retail success. When you start thinking about expansion, also think about the questions that will come up along the way. The checklist of these 10 things to consider will help point you in the right direction when looking for answers.
photo courtesy of iStock Photo
