Whether you’re starting from scratch or you’re already an established online seller, it’s always a good idea to spend some time perfecting your brand.
If you are thinking about selling overseas, then an online presence is the obvious way to go about it: global opportunities for online retailing are huge and growing - and marketplaces such as Amazon, ebay, Alibaba and Rakuten are making it easier and more cost-effective for smaller retailers to make the transition.
Cross-border online selling can enable you to reach new customers, run a store that is open 24/7 and increase awareness of your brand. It can also allow you to take advantage of changes in currency value to make your products even more attractive to certain countries: Sterling’s slump against the euro and US dollar spring to mind.
But it may still seem like a very big step – and one that is out of your comfort zone.
Fear not. There is a wealth of information available to help – and considerable free support from government, such as the Department for International Trade's (DIT's) exportingisgreat.gov.uk. It has links to services like live export opportunities, online marketplaces, training events, and you can even build an international web profile for your business. It also has support from non-government and commercial partners.
Exportingisgreat.gov.uk helps UK companies who are:
- new to selling online
- already selling online, but need help with specific issues
- experienced in online sales, but are looking to sell on multiple platforms globally
The information it provides is particularly valuable in your early research stages – particularly when you are working through a short-list of potentials.
Which overseas market is the best fit for your products?
Let’s assume that you already have an online presence and that you have a product range that is selling well in the UK – but, you are having problems achieving the growth in local sales that you would like. You may already have some overseas customers – and feel that there could be many more if you focussed specifically on the countries they represent.
But, how do you assess which country specifically you should be targeting?
Your own sales experience, can give you a feel for potential new markets, but it is subjective. You can also look at where your competitors are operating – and evaluate how they are doing. But you ultimately still need to research potential markets more formally if you are to make the right decision.
Here are five things to consider when you start your research into a new geographical market:
- Product selling price versus transport costs
If you have a low cost product with high transport costs, you will be at a disadvantage compared to local players.
- Local taxes and duties
If the market has high levels of import duty, you will again be at a competitive disadvantage to local sellers.
- Local product adjustments
You may need to make adjustments to your products and the way you sell them to ensure compatibility with the new market: size information is an obvious one. The USA, for example, still widely uses imperial measurements and this should be reflected in anything you sell there.
- Local regulations
Quite apart from it being illegal to sell certain products in some markets, there may be local product standard regulations or testing requirements applied to those that you can sell.
Locally-appropriate labelling is a legal requirement for some products - although the specifics may vary from market to market: foodstuffs must normally be labelled with nutrition information, for example.
Local regulation may also restrict the transport of certain items through postal services - plant products or volatile liquids, for example. This may make it impossible or too costly to fulfil delivery.
- Controlled or licensed products
There may be restrictions on the amount of some products that can be imported into a country.
What else should you take into account?
As well as considering how well (or not) your product would fit into a new overseas market, you also need to consider local market characteristics - as these will impact its viability as an option for you.
- Internet usage/online shopping acceptance
It is obviously much easier to begin to sell in a market where a high percentage of the population is Internet savvy and shops online regularly - China springs to mind for these very reasons. So check out these vital statistics as part of your research – and delve down into the figures too. For example, some 91% of Japan’s population use the Internet and it has the highest digital buyer percentage in the Asia-Pacific region, with 77 million digital buyers in 2015. But at the same time many Japanese shoppers are reluctant to buy online from cross-border suppliers - just 12% did this in 2015.
- Local culture
Apart from being sensitive to local cultural norms, the ability to ‘speak’ to buyers in their native language is fundamental to success in certain markets. That means a local language web-store as well as the ability to provide service or answer queries in the customer’s language. Opting for an English-speaking country can remove this headache – but don’t ignore the subtler linguistic differences - between US and UK English, for example.
- Pricing, payment and repatriation of funds
The financial side of things will also play an important role in your success: local taxes may need to be included in your prices; you will need to offer the payment methods preferred by local shoppers, find a way to repatriate your revenues profitably, and protect margins against the risk of currency fluctuations where possible. For more guidance on the best foreign exchange solutions for international online sellers visit our homepage or get in touch.
- Fulfilment and delivery
The efficient, cost-effective fulfilment, transport and delivery of your orders is essential to selling cross-border profitably - and to meeting customer expectations. This is easier in some markets than others – geographically close countries, for example, normally pose less of a problem unless you opt to ship direct from an overseas supplier.
Lots to think about - can a marketplace help?
Global marketplaces can be an excellent way for online retailers to enter new overseas markets. The biggest are well-established consumer channels that enjoy high local traffic and large numbers of repeat customers. Plus, in countries where shoppers may be reluctant buy online from cross-border suppliers, they may reduce the risk in consumer eyes.
Marketplaces can also provide invaluable local knowledge to help you to understand local requirements and attitudes - and work out how best to participate in that market.
They also offer a great test environment that allows you to introduce your products at a lower cost/risk than setting up a direct online presence - or a physical store.
If you opt for the marketplace route, DIT’s selling online overseas tool can help you to identify the best one for you, enabling you to:
- find major online marketplaces in other countries
- see whether these online marketplaces are suitable to sell your products
- discover how to list your products on an online marketplace
- get information about costs of listing on the marketplace and how logistics are fulfilled
- access special terms negotiated by the UK government
Expand your reach globally
The reach of your business has been extended by e-commerce, making your products available to millions of consumers across the globe, should you choose. But if you hesitate – don’t wait too long. You could well be outpaced by competitors who have been quicker off the blocks.
And don’t think you have to do it all alone. There are lots of people who can help.
This article just scratches the surface of the advice and information available from websites like DIT and Selling Online Overseas that will help you approach this daunting decision in manageable, well-informed stages.
So, use the help available at exportingisgreat.gov.uk and go for it!