From language to tax via logistics, selling in overseas markets presents a wealth of challenges. Here's how to overcome them so you can focus on the goodies.
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Despite the challenges, cross-border selling can deliver rapid growth, especially as the UK market is beginning to reach maturity and competition continues to be fierce. Alongside core growth objectives, there are a number of other reasons for ‘thinking global’.
There might be the chance to sell seasonal stock to other territories. For example, for fashion retailers, the UK summer period is quickly followed by Australia’s summer. This avoids the need to hold excessive inventory levels and reduces the need for heavy discounting.
Before embarking on this new journey, put a thorough plan in place and ensure you have first mastered domestic channels and local marketplaces. To do this you need the people, software and automated processes to make yourself efficient. Ask yourself, what marketplaces bring me the most success? Are all my listings correct? Are my warehouse processes in order? Once you have this, you can start to look further afield. Below are three next steps you should take.
Make sure you comprehensively research your target markets. Learn as much as possible about your international customers. Understand the cultural differences extensively. In terms of logistics, before aiming to conquer new territories, equip yourself with the answers to the following questions:
· What are the tax requirements for the countries we are expanding to?
· How will we deal with international deliveries and returns?
What are the legal fine points we should be aware of when entering a specific market?
Once you have clarified these aspects, it is time to get to work. First, assess what products would sell and which need to be reassessed (for example electrical products would be different country to country). Just because a product sells well domestically, there are few guarantees that this success can be replicated abroad.
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You’ll also need to consider cultural differences and tastes to deduce what products will perform positively. Sales channels work differently across the various countries as well, so this is also crucial to consider. In the UK, eBay and Amazon are clear leaders in the ecommerce world, however it is not as clear-cut in mainland Europe. This makes the region harder to succeed in, especially if your company’s experience lies solely with eBay or Amazon.
Perhaps one of the most significant aspects that retailers overlook when expanding into international marketplaces is product listings. They assume everyone speaks English, but the majority of buyers prefer items in their native language, especially when it comes to expensive or more technical items.
This highlights the need for native translation services and potentially investing in an accurate translation provider. Few things will turn potential customers away quicker than listings that do not make sense – try not to fall into the trap of thinking a quick Google Translate can provide a competent translation. Translating any user instructions that accompany products is also important.
Speaking Together, Paying as One
The language barrier not only applies to product listings, but also customer service. Trying to manage foreign service issues in English can cause a range of complications and might lead to increased product returns. To drive success, try to manage customer service in the native language of the countries you are trading in.
Order fulfilment is another area you will need to consider before taking your company international. You will need to decide what country to send parcels from and where stock will be held. Luckily, there are several options you can take. Amazon’s ‘FBA’ (Fulfilled by Amazon) can manage fulfilment in a number of countries, and specialist fulfilment companies provide a similar service of managing an end-to-end supply chain globally.
Getting product to where it needs to be can be a complex process
Tax and compliance is one issue that should never be overlooked. Legal matters often mean you cannot rush into a new market. It is critical to assess local tax and sales regulations. Intrastat declarations and invoices should be the first place you start. Every VAT-registered business trading in the EU needs to declare certain information.
Familiarise yourself with what information you are required to submit and when to do so. On top of this, businesses must ensure that invoices comply with local regulations. Once you are familiar with the process, the final steps are not as daunting.
Money and Customers United
Another consideration is the issue of different currencies. When expanding globally, it is highly likely that a retailer, whatever their size, will need to open local bank accounts. The key lesson with foreign currencies is that they fluctuate and as a result can affect your bottom line.
Last but not least, ensure you have clear practices in place to build trust with your new customers. There are many ‘scam websites’ that give a bad reputation to ecommerce retailers. Take advantage of customer reviews, promptly address any issues people might raise, make customers the centre of your company and you will likely reap the benefits sooner.
There is no single pathway to success abroad. But following these steps and tips when breaking down borders should make the process easier and increase your chances of success significantly. All that is left is to choose a country.