The world of ecommerce is constantly expanding, and it’s more important than ever to make your mark as an online seller. The Covid-19 pandemic has caused online shopping’s popularity to increase even further as global ecommerce sales grew by 27.6% in 2020 and are expected to have risen further throughout 2021.
Christmas is rapidly approaching and retailers around the country are bracing for the onslaught of customers looking to splurge over Christmas.
While traders on the high street will no doubt bear the brunt of the tariff during the busy season, the unique challenges facing retailers operating online and overseas means things can be just as taxing for international ecommerce businesses.
So here are a few last-minute tips on how your ecommerce business can weather the storm and make the most of the Christmas rush.
Make sure you’re prepared logistically
The logistics of operating an international ecommerce business is important year round, but it pays dividends to ensure you’re extra prepared for the Christmas rush.
You’re likely to sell an increased volume of items over the holiday period so check your regular supply routes will be able to handle the extra demand.
If you’re expecting strong overseas sales, consider shipping a large portion of stock in advance. Services like fulfilled by Amazon mean you can store your products locally and ship them when needed, netting you substantial savings against shipping each international order individually.
Also be aware of cut off dates for shipping to overseas customers and make sure this is well communicated to buyers, don’t risk negative reviews from disappointed consumers who expected to receive their purchases in time for Christmas.
Be aware of shifting consumer habits
While December remains a key month for sales, retailers have found over the last couple of years that consumers are opting to make their purchases earlier as US-inspired Black Friday sales begin to spread across the globe.
The big retailers are likely to go all out for Black Friday and Cyber Monday again this year, and if you wish to compete you’re going to need to entice customers with your own deals and savings.
While this may cut into profits, the alternative is losing out to your competitors during this key sales period, so finding the right balance is key.
Protect yourself from currency fluctuations
Operating an international ecommerce business inevitably means having to pay overseas suppliers or taking payments from foreign customers, something that leaves you highly exposed to fluctuations in exchange rates.
Many businesses will place large orders with suppliers in the run up to Christmas, only to then settle their invoice in the New Year, at which point an unfavourable shift in the pound can see them lose out on expected profits.
Even if GBP only moves up or down by a couple of pence this can add up to thousands of pounds in the long run, depending on the volumes you’re buying and selling.
Fortunately there are precautions you can take to help minimise your exposure to currency fluctuations, such as using a forward contract.
This involves fixing an exchange rate for up to two years, meaning that when you’re ready to make a transfer you’ll know exactly what your returns will be.
Minimise customer returns
While the run up to Christmas is the busiest time of the year for many retailers, the weeks following the festive season can be just as busy, for an entirely different reason.
This is of course due to the huge wave of returns of unwanted or ill-fitting presents that flood back to warehouses in the New Year.
For online sellers, who reportedly face an average return rate of over 30%, this can take a huge chunk out of profits, especially when footing the bill for costly international shipping.
While you won’t be able to eliminate returns entirely, you can help to minimise disappointment amongst your customers by providing as much clarity as possible.
This may include providing comprehensive descriptions of all your products as well as ensuring all images are well lit and as clear as possible.
With 22% of all returns to online retailers being attributed to discrepancies between an online listing and the actual product, taking the time to make things as clear as possible can save you a major headache during the post-holiday season.
Limit the hassle when dealing with international payments
Manually processing international payments to be transferred back into Sterling can be time consuming, especially for small businesses whose resources may already be stretched pretty thin over the holiday period.
Fortunately there are a few services that can help streamline the process of repatriating sales profits, such as multi-currency collection accounts, which can automatically convert foreign currency funds and transfer them to your domestic bank account.
Not only will this ensure your funds are always where you need them, but it will also free you up to focus all your energy on maximising sales over the vital Christmas trading period.
If you wish to discuss your transfer options, get in contact with one of our friendly currency experts at +44 20 7847 9400.