So, you’ve got an online business selling products or services to clients locally and, perhaps, abroad.
International sales – newbie or seasoned pro?So, you’ve got an online business selling products or services to clients locally and, perhaps, abroad. Sales-savvy or new to e-commerce, this guide will outline the steps needed to take your custom to America, addressing exportation, finance and marketing concerns.
‘I’ve sold in Europe before, but not America. What’s the difference?’Where items sent to the EU under the value of €22 were previously exempt from VAT, they now incur a charge. Consequently, small UK businesses are required to appoint an intermediary or else have EU customers pay a fee once their item arrives. Often these charges are unexpected and may generate ill-will amongst consumers.
Products sent to America will also be subject to charges - however, these tariffs are not new, so customers are less likely to be caught out. In America, experienced customs agents and trade & investment experts are on hand to provide support, alongside governmental agencies.
You may qualify for free support from the UK’s Department for International Trade, which runs an E-Exporting Programme designed to help UK companies export to international markets.
Tax, customs duty and other financial considerationsExchange rates, insurance and export invoicing are all priorities to consider when you start selling abroad. Thankfully, there is plenty of help around: UK Export Finance (UKEF) strives to ensure ‘that no viable UK export fails for lack of finance or insurance’ and over 2020-2021 provided £12.3 billion in financial support for UK exports.
Tax, customs Duty & insuranceUS Tariff and Trade data can be found for various goods on the US International Trade Commission database. In calculating the cost of exporting, you can decide whether your profit margin makes selling abroad worthwhile.
There is no such thing as VAT (Value Added Tax) in the US, but many states levy their own sales tax between 2.9% and 7.25%. The Department for International Trade recommends consulting an accountant or tax lawyer to assess whether you meet tax-payable thresholds and register you for a license if necessary.
There’s no legal obligation to obtain insurance- but it can protect you against non-payment, sale termination, delays or misallocations. The British Exporters’ Association has a guide to credit insurers, and you can also insure via gov.uk if you’re denied commercial insurance. The British Insurance Brokers’ Association can recommend various experts in trade credit insurance.
Exchange rates and moving moneyFluctuating exchange rates can sap your profits, while banks charge transfer fees as well as marking up rates. The solution? Open an American account to receive payments, then use a foreign exchange provider like Currencies Direct to transfer money to your domestic account. We offer competitive rates to get you a better deal on your transfer, any without any additional transfer fees.
Compliance, shipping & logisticsCompliance is big deal, as certain properties mean goods being rejected, sent back or withheld. Legal requirements can be consulted online at the National Institute of Standards and Technology, while the US Food and Drug Administration (FDA) has its own rules relating to food and drink, drugs and cosmetics.
Your transportation provider will determine whether you receive documentation support and tracking. Royal Mail postage is available for packages of up to 30kg; however, if your cargo can fit into a shipping container without filling it up, you could opt for LCL (Less-than Container Load Shipping). LCL involves export haulage, origin handling, ocean freight, destination handling and import haulage, via customs, and can be handled by a freight forwarder.
Marketing & customer supportYour domestic marketing strategy may need to be adapted for a US audience. It’s important to make international customers aware of their payment and delivery options, including extra charges for shipping and arrival times. It may be worth facilitating multiple payment methods for better usability.
You may also need to revise your tone of voice: remember that British terms can mean different things in America- consider creating a separate webpage for international sales. It’s worth doing some research into American sales culture, too: according to international fashion brand ‘Oxcloth’, US consumers respond well to influencer-marketing and cross-selling promotions.
Finally- consider multi-channel e-commerce. Selling via your website is great for building loyalty, but it means competing with corporate giants like Amazon. Why not do both? Selling via eBay or Amazon will expand your reach, and organisations that sell on multiple channels generate 190% more revenue. Not only that, but it could take some of the headache out of transportation, as several platforms can handle shipping for you.
Optimising an international sales strategy is a constantly evolving process, as markets change and technologies emerge; but the considerations above will help you get started. Make finances a priority, as overspending could equal debt or bankruptcy- your budget must include customs charges, tax, insurance and transportation. Remember that you’re likely to lose a cut of your income transferring a foreign currency, so explore your currency options to see how you can best avoid this.
So long as returns exceed investment, you’re winning: you may even find that international exposure boosts domestic brand awareness. Go forth with confidence, and watch your brand blossom as you conquer the American market.
Currencies Direct is one of Europe's leading non-bank providers of currency exchange and international payment services. Since we were formed in 1996, we've maintained our focus on providing innovative foreign exchange and international currency transfer services to corporations of all sizes, online sellers and private individuals. We have also expanded our services to provide dynamic and pioneering "business to business" solutions to help companies, tier 2/3 banks and other non-bank financial institutions to process their international payments. Our headquarters are in the City of London (United Kingdom) and we have operations in continental Europe, Africa, Asia, and the United States. Currencies Direct is jointly owned by private equity firms Palamon Capital Partners and Corsair Capital.