In the past, international business was mainly limited to huge companies that could afford to invest in building a network of employees, stores, and warehouses abroad. Now, eCommerce has created a new opportunity for small and medium businesses to begin shipping internationally. These smaller companies can become global players through maintaining an online presence rather than a physical one.
Still, expanding to international shipping requires a significant amount of planning and attention to detail. Because it’s easier than ever before, international markets are seeing an uptick in competition for overseas sales. Make sure you follow these tips so your company succeeds on a global scale.
1. Check out market feasibility
The very first step is to conduct research on market feasibility. That means finding out where your products are likely to succeed. Are you selling bikinis? You’ll probably find your target market would be Europeans rather than Middle Easterns based on their culture. Are you selling fancy pens? You might want to look into entering the East Asian market.
Here are three strategies you can adopt for market feasibility:
- Talk to locals in the countries you’re targeting to see whether they believe your products would be profitable there
- Search for similar products in the target markets so that you can gauge whether there is already a demand for those products
- Utilize Google Trends to determine what shoppers are searching for in your target countries
Keep in mind that some products simply aren’t cut out for international shipping. Goods that are particularly heavy, fragile, or bulky are linked to extra costs and risks. If your product falls into one of these categories, you may need to stick to domestic shipping–unless you determine you will have a large enough profit margin.
Wondering which countries to target? The top eCommerce markets in order of sales are China, the US, the UK, Japan, Germany, France, South Korea, Russia, Canada, and Brazil. That doesn’t mean you should automatically try to sell in all of these countries, however. Look to market feasibility research to determine which countries are the most suitable for your products.
2. Perform a competitive analysis
Continue your research by executing a competitive analysis, which involves evaluating in-country competitors to see if you are able to outperform them. This is particularly important because you will have a lot more expenses than local companies, including shipping fees, duties, insurance, currency exchange fees, and other international shipping costs.
As part of your competitive analysis, address the following questions:
- Is your product of higher quality than competitors?
- Is your product able to be sourced within this country?
- Is your company larger than competitors and therefore able to tolerate a lower profit margin?
- Are you able to offer better service than competitors?
3. Test out suppliers
You may already have a supplier for the domestic side of your business, but expanding to international shipping requires a reevaluation of your supply chain. For example, if your supplier is in Turkey and you’re planning to expand to South Korea and Japan, you might want to find a Chinese supplier as well. That can save on shipping costs for those countries.
Whenever you search for a new supplier, do plenty of research. If possible, do a trial run with the supplier you choose so you can test whether they actually provide the quality and speed they promise. Failing to conduct due diligence on potential suppliers could result in a disaster.
4. Keep track of the duties and paperwork
Investigate which customs duties, tariffs, and taxes you’ll be required to pay for each country you’re exporting to. You’ll also need to fill out the proper paperwork and procure the necessary international shipping labels. Choosing the right carrier is essential. You’ll want to find a shipping company that provides tracking such as DHL, FedEx, or UPS.
The easiest way to make sure you’re paying the proper duties and completing all of the paperwork correctly is to hire a customs broker. Due to their expertise in the field, customs brokers save you time, energy, and money. If you choose to do things on your own, you might end up accidentally committing customs fraud or owing extensive surprise fees.
5. Develop a mobile-friendly site
Because of the prevalence of mobile phones compared to computers (particularly in developing countries), it’s vital to optimize your website for mobile. If shoppers encounter a website that’s difficult to navigate or takes a long time to load, they’re likely to look elsewhere–even if you have great products.
If you have the resources to invest in creating an app for your brand, that’s even better! After all, two-thirds of internet users report using shopping apps on their mobile phones. Developing an app for your company will give you an edge over the competition.
Don’t forget to consider your international customers as you’re designing your website or app. Incorporate various languages, different currencies, and alternative methods of payment to make things as easy as possible for them. Make sure you calculate currency conversion rates properly, and consider investing in foreign exchange risk insurance.
6. Prepare your team
Before you dive into the international sphere, it’s important to assess whether your team is capable of making the leap. Check on your marketing team to make sure they are ready for the extra work that comes with entering international markets. Consider hiring a local marketing team for the top countries you’re trying to reach. That way, you’ll have insider knowledge on which marketing strategies will yield the most profit.
You’ll also need to prep your customer service team for the influx of customers. This will probably involve finding employees who are fluent in other languages and available to work in other time zones. Don’t forget to increase your social media efforts as well. You may want to have a separate social media account for every country you’re targeting so that you can tailor your posts to that audience.
7. Create an international returns policy
No matter how great your products are, there’s simply no way to avoid getting returns. International shipments are no different. Reexamine your returns policy to make sure it works for international customers as well as domestic ones. Have a process in place for providing speedy refunds as well.
Your returns policy should be clearly stated on your website. If customers have a difficult time returning your products, they’re unlikely to make repeat orders in the future or to recommend your online store to a friend. Consider offering a prepaid return label to make customers feel even more at ease.
8. Make sure your domestic business continues to grow
Don’t get so caught up in the idea of international shipping that you neglect your domestic business. After all, that’s what gave you the foundation that allows you to expand globally. Continue reaching out to your loyal domestic customers so they don’t feel abandoned.
Many companies reach a point where they require both a domestic manager and an international manager in order to stay on top of both markets. Have a plan in place for how you will keep an eye on your domestic business as you look to overseas expansion. You’ll want to maintain your domestic profitability as you go through the growing pains of expanding to international shipping.
At BorderBuddy, we are ideally suited to help you expand your business to international shipping. You won’t have to worry about keeping track of the ever-changing international rules and regulations. We’ll take care of the details of the customs process so you can focus on growing your business. Give us a call today.