Growing globally

Growing globally: Tips for expanding your ecommerce business overseas

The great thing about an ecommerce business is that if you have the right product, selling oversees can be a smart way to expand your business, allowing you to use what you’ve learnt locally to leverage your growth. 

Jake Nickell and Jacob DeHart were inspired to set up Threadless, an online community of t-shirt designers, after entering a design competition. What began as a $1000 online start-up has evolved into a multimillion dollar international business. Jake and Jacob may not have followed the traditional road to international business success, but what they have done is made sure they have a clear goal, they understand their customers and the countries they sell in. If you are thinking about growing your ecommerce business globally, there are a few things you may want to think about first.  And who knows, you may even be the next Jake Nickell or Jacob DeHart.

A goal the whole team can focus on

You’ve heard the term ‘running around like headless chickens’ right? Well, when going global, nothing focuses you and your team more than creating a Big Hairy Audacious Goal (BHAG). An idea that was introduced by Jim Collins and Jerry Porras in their book “Built to Last: Successful Habits of Visionary Companies” a BHAG is the goal that dreams are made of, and it should engage and energise your teams. Your BHAG needs to translate your business strategy into simple terms that everyone understands and can get on board with.

Choose where you expand carefully

Once you have your goals set, you need to consider what countries you want to sell to. Some countries have extremely high rates of credit card fraud and pose major security issues to your business. Also shipping costs can go through the roof in some markets, and if you ever want to offer free delivery at peak times then you’ll want to make sure you can absorb these costs. You may also want to monitor the exchange rate in your chosen countries, if it fluctuates a lot then ask yourself, is this a stable economy to trade in? Don’t forget, just because you are the market leader in your country you might not be elsewhere, just as you would at home, check out your competition and also look at countries where the demand for products or services like yours is just starting to take off.

Tax doesn’t have to be taxing

You need to make sure you fully understand the tax and selling laws of the country you intend to sell in. In the US, buyers may have to pay a sales tax, but this isn’t the case for every state in America. Or if for example you are based in the UK and selling to non-UK businesses in the EU, and they are registered for VAT in their own country, they can quote their VAT Registration number in order to be exempt from VAT. It’s always worth making sure you fully understand the tax laws in the countries you intend to sell to and that your customers are aware of where your core business is based. There’s also import and export taxes which you may need to pay for shipping overseas, which may include completing a customs declaration form. If you don’t give the option to let customers pay for VAT/duties when ordering, they could be charged at the doorstep and will also pay a steep processing fee with the carrier, meaning they would be very unlikely to shop with you again!

Test the waters

A great way to test whether you will be successful in foreign markets is to start by selling your product on eBay or Amazon. Both are trusted and established channels and provide a simple way to start selling abroad. You can learn a lot about the customer base without committing to a full foreign invasion.

Going ‘glocal’

We tend to regard moving our business interests over borders as the process of going global. If done properly, it is, in fact, a process of going ‘glocal’ in that you need to treat your global markets with as much care and attention as you do your local market. Successful brands such as KFC, Starbucks and Coca-Cola have all gained market share in emerging markets because they know success means adapting to local tastes, attitudes and values. For example in Beijing Starbucks serve green and aromatic teas. According to the Harvard Business Review and The Common Sense Advisory, 72% of the world’s online shoppers are more likely to buy a product if the information is available in their own language. This could mean adapting your marketing message to suit the local cultures; does your shopping cart have currency converters? Remembering not all countries use credit cards as much as others do, does your site have a variety of payment options? Can your customer opt to see product descriptions in their local language? Do you have a ‘just like home’ tracking and/or local returns service?  And what about your customer support? Can you help a customer in their local language? If you can’t do this, then make it clear on your website.

The obstacle course of foreign addressing

Did you know that there are over 130 different address formats in the world, 6,000 languages, 40 personal name formats and innumerable accents? Be it for delivery of your product or sending out marketing campaigns, it’s vitally important to prepare and learn about global data. The Data Warehousing Institute (TDWI) reported that “poor quality data costs United States businesses a staggering $611 billion a year in postage, printing and staff overhead”. Without at least the basic of understanding national data you could find yourself forever fighting data fires, and never achieving any level of data quality. By making sure your data collection systems mirror the data formats of the country and language as closely as possible you can increase data accuracy. One way to do this is to use auto-complete or other address validation software at the data entry stage e.g. when your customer enters their address at the online checkout. There is no better way of collecting correct data than interacting with the source – your customer. Trading in any international country comes with myriad of challenges and rewards. However, the businesses that will succeed will be the ones that look and feel like they have been built within the local market.

To learn more about using international data to expand your business overseas download our free whitepaper: Understanding International Data.

What challenges have you faced, and what lessons have you learnt trying to trade internationally?