Is it Time to Go International?
For most online merchants, it's not a question of whether to sell internationally, but how to go about it. The potential that international markets represent for online merchants large and small is simply too big to pass up. The dramatic increase in potential customer base, the far higher growth rates for e-commerce in nations outside the U.S., and the value of geographic diversification cannot be understated.
While e-commerce growth rates in the U.S. are expected to hover around 9 percent over the next several years, those in Europe are forecast to be 11 percent over the same period, according to Forrester Research. In emerging markets such as China and India, the number soars above 20 percent.
And yet there are innumerable obstacles for merchants considering entering overseas markets, from basics such as translating copy and converting currency to logistical hurdles such as shipping restrictions and import duties to subtler challenges such as sensitivity to local markets and cultures.
On balance, however, the opportunities for most online merchants far outweigh the challenges for this simple reason: when it comes to international e-commerce, whatever merchants can't do themselves, they can find partners who can help them.
Whether it's participating in a larger retailer's marketplace — e.g., Amazon.com or eBay — implementing international shipping from their existing e-commerce site, or building and marketing separate full-on websites for individual countries, there are plenty of partners willing to help merchants do much of the heavy international lifting.
Before deciding which path to pursue, the most basic question is whether people in other countries want to buy your products. There are plenty of ways to figure out whether products are attracting international interest, from analytics data to customer service inquiries to social media interactions.
Once merchants have identified the overseas markets they want to enter, they have several options short of establishing full-bore international e-commerce sites.
Sell on Local Marketplaces
Merchants can take advantage of third-party marketplaces such as the extensive networks developed by e-commerce goliaths Amazon and eBay to easily establish an international foothold.
While it may seem odd to partner with entities once seen as the enemy, it's becoming commonplace for merchants competing with Amazon to simultaneously take advantage of its dominant position by participating in the Amazon Marketplace program. In exchange for a cut of the revenues, merchants can use the marketplace to piggyback on Amazon's international presence to establish brand footholds abroad without the headaches of launching a stand-alone site.
There are several potential benefits of such a move, including improved search visibility, exposure to new audiences, easy accessibility for fast-growing mobile users, and the ability to tap into fulfillment services that help negotiate international shipping and tariff hurdles.
Even brands that go on to invest more significantly in overseas markets can piggyback off marketplace services, as Perricone MD does in Japan. The skincare products manufacturer's Japanese website includes information about the brand, customer testimonials and product information. The site's "Buy" buttons take shoppers to Amazon's Japanese marketplace to complete their orders, which are fulfilled by Amazon.
Ship Internationally From Your U.S. E-Commerce Site
Before launching a new country-specific website or considering whether to open foreign fulfillment centers, merchants can iron out the logistics of international trade by shipping internationally from the U.S.
This option is already popular with merchants of all sizes. Nearly 60 percent of merchants in the Internet Retailer Top 500 and more than 45 percent of merchants in the second 500 already offer some form of international shipping.
Among the top 500 merchants, Canada is by far the most popular international option offered, with the U.K. and other European destinations, Japan and Hong Kong, Australia and New Zealand rounding out the top 20.
Forrester projects the international market for U.S. e-commerce goods to grow at a compounded annual rate of 17 percent to $44 billion by 2018. With such strong demand, usage of international logistics vendors is growing rapidly.
However they do it, merchants incorporating cross-border capabilities should test and retest checkout flow to streamline for both domestic and international audiences. They should let consumers know throughout the shopping experience that they service countries outside the U.S., and offer multiple paths to setting the country.
At a minimum, they should let shoppers set their shipping destination from within the cart as well as at checkout, and integrate international destinations into estimated tax and shipping calculators so consumers can derive the total order cost up front, regardless of their location.
While the challenges to international e-commerce can seem significant, retailers that carefully assess overseas markets for their products, find the right partners to help them and are patient in assessing results will be glad they did.