8 ways independent retailers can win global business online
Currencies Direct May 26th 2015 - 4 minute read
As international e-commerce revolutionises the way they do business, we explore how online retailers can maximise profit as they reach audiences in all corners of the globe
The internet has opened up a whole new world of opportunity for sole traders and small businesses. Not only can companies now market themselves internationally via their web presence, but online ordering means customers can shop 24 hours a day from anywhere in the world. Online retail platforms such as Amazon and eBay have been consistently outperforming the high street over recent years, and research shows a steep rise in global business won by small and medium sized enterprises online. Smart businesses keep ahead of the curve in this constantly evolving era of e-commerce, and tap into the new global markets it reveals. Here we give our advice for online sellers wanting to access this global market with minimum stress and at maximum profit:
- Choose the right marketplace
Your choice of marketplace can have a big impact on sales. Choose a recognised one with a large user following. This can differ from country to country. Well-known names such as eBay or Amazon generate customer trust and loyalty and there can be a lot of benefits to associating your business with a respected brand.
Amazon is one of the most recognisable and popular marketplaces to sell on. In Europe there are 5 Amazon marketplaces that cover over 25% of e-commerce spending in the region. Sellers are not limited to the domestic marketplace and have a broad coverage across multiple countries
- Spread the risk
Specialising in one marketplace can generate plenty of profit but it may also be a risky strategy to rely solely on this one source of revenue. Often having a second or multiple marketplaces is a great way to boost your sales and spread the risk.
- Think ‘description line’
To be sure that the right shoppers are finding your products, think about how to optimise details for search. Work out the best keywords by thinking like a customer and make a list of what you would realistically type into a search bar if looking for a product like your own. Use all the available space for the main description line including as many of these keywords as possible and write in an easy-to-understand, customer-friendly way. Avoid punctuation and special characters as people generally don’t use these when searching.
People’s searching habits vary depending on language, age and socioeconomic status so play around to test what works best for your product and target market, and carefully track what generates the largest response. Your marketplace will provide you with business reports so you can compare the success rates of different description lines.
- A picture speaks a thousand words
Too much written information in the body of the listing can prove overwhelming for shoppers as, on the whole, people don’t have time to read lengthy product descriptions. Often high-quality and varied images are a more effective sales tool, although of course if a product is technical then the full spec should be given.
- Comply with regulation
Do your homework on the relevant laws. These include the Data Protection Act 1998, the Electronic Commerce Regulations 2002 and the Consumer Protection (Distance Selling) Regulations 2000. There will also be specific marketplace rules that you must be clear on and it’s vital to protect data against hacking and viruses. The need for front-line protection is of utmost importance to ensure best practice and a squeaky-clean business reputation.
- Think stock and distribution
Anticipate what your new global customer base will mean for stock levels and carefully plan your distribution strategy to ensure no one is left disappointed. Remember, an unhappy customer can mean a damaging review or the loss of repeat business.
- Enlist the help of a foreign exchange service
If you’re selling overseas through online marketplaces, there is a further crucial element that can make the difference between a profitable or loss-making cross-border experience: hidden currency conversion fees. Deepak Goyal, Head of E-Commerce at Currencies Direct says:
“Platforms such as Amazon or eBay give you access to international markets in a way that would have been unthinkable even a decade ago. As overseas sales grow, the process of getting money back to your home country (and currency) can end up being neither straightforward nor cost-effective.”
While online marketplaces are well practised at getting your products in front of the right customers, they may not be as effective when it comes to managing currency. If you sell on international marketplaces such as Amazon, and generate sales in foreign currency, you can lose up to 4% of your sales turnover in foreign exchange conversions. You need an equally strong partner in foreign exchange to ensure your money is available in the right place, in the right currency, at the right time.
Currencies Direct’s E-tailer Collection Account provides online retailers with an overseas bank account – located in the markets and denominated in the currencies you sell in – which enables you to collect money without converting it into your home currency. Deepak says:
“Previously, the only option was a UK bank account, which would mean a 4% hit on profit just to change payments into sterling. Setting up international bank accounts and using foreign exchange experts can mean not only better exchange rates, but also better economic management of transfers.”
Let’s talk international payments. The team at Currencies Direct are ready to discuss the best way for you to receive money from global customers. Call them on +44 (0) 20 7847 9400 or find out more at www.currenciesdirect.com/etailers You can also register and, compared to online marketplaces, save up to 3% of the total sales value on exchange rates.*