If you haven't already started selling internationally, it is time to start! According to Statistica, from 2014 to 2021 worldwide ecommerce sales will grow almost 246 percent, from $1.3 trillion to $4.5 trillion. The global competition for customers is increasing, with a significantly growing number of shoppers buying from sellers across international borders, including 83 percent of shoppers in Canada, 81 percent in Brazil and 78 percent in Mexico, according to the global UPS Pulse on the Online Shopper study. In the U.S., nearly half (47 percent) of shoppers purchased from merchants outside the U.S.
Smaller ecommerce companies often turn to marketplaces like Amazon and eBay to support selling internationally. Marketplaces like these allow customers to make international purchases in a safe, familiar environment. According to a 2017 International Post Corporation (IPC) survey of 29,000 International customers in 30 countries, 53 percent of all consumer international ecommerce purchases go through just three marketplaces: Amazon, eBay and Alibaba. Marketplaces can help solve currency conversion issues and provide international exposure to a large number of customers to create potentially tremendous new business opportunities.
While this rapid international growth is exciting, meeting customer expectations for predictable international transactions remains a challenge. The IPC survey also found that 62 percent of international buyers, for example, still expect to receive free shipping when shipping internationally despite the higher costs and unpredictable cross-border issues. Meeting high expectations and staying profitable is difficult, given the additional challenges of international shipments.
Here are seven tips to help small online merchants take advantage of the growing opportunities of selling internationally while remaining profitable and creating a predictable shipping experience for their customers. Sellers need to:
Smaller ecommerce companies often turn to marketplaces like Amazon and eBay to support selling internationally. Marketplaces like these allow customers to make international purchases in a safe, familiar environment. According to a 2017 International Post Corporation (IPC) survey of 29,000 International customers in 30 countries, 53 percent of all consumer international ecommerce purchases go through just three marketplaces: Amazon, eBay and Alibaba. Marketplaces can help solve currency conversion issues and provide international exposure to a large number of customers to create potentially tremendous new business opportunities.
While this rapid international growth is exciting, meeting customer expectations for predictable international transactions remains a challenge. The IPC survey also found that 62 percent of international buyers, for example, still expect to receive free shipping when shipping internationally despite the higher costs and unpredictable cross-border issues. Meeting high expectations and staying profitable is difficult, given the additional challenges of international shipments.
Here are seven tips to help small online merchants take advantage of the growing opportunities of selling internationally while remaining profitable and creating a predictable shipping experience for their customers. Sellers need to:
1. Know the international demand for your product and how your target countries regulate it.
Decide how to fulfill orders to different countries by answering basic questions. What is the demand for your product? Is your item taxable in this country and at what value or quantity? What customs regulations impact your product? What is the country's de minimis level (the minimum threshold value for duties)? Are there methods to quickly locate a de minimis level for a given product so you can make the right decisions for your business model?
For example, if a company is selling expensive leather jackets into a country with a $100 threshold that triggers a per-item tax, your customers could be charged a customs fee equal to the value of the product. This might make your product too expensive for the target market. In a case like this, it might be much cheaper to put a load of jackets on a ship headed to a warehouse in Germany, and fulfill the jackets locally rather than shipping them individually using an international parcel service. Remember: Use your parcel carrier's knowledge. It has customs brokers available who can help you figure out what duties apply to your products, in which countries. It can help with customs problems and suggest the most efficient shipping methods for your situation.
2. Control your shipping costs by using a parcel consolidator.
Most consumer ecommerce international packages weigh in at 20 pounds or less. The IPC survey also found that more than two-thirds of all international consumer ecommerce purchases are sent via parcel post. However, unlike U.S. First-Class Mail, handling parcels one at a time internationally doesn't make much sense. First-Class Mail International can get expensive, making selling low-cost items a challenge because of transportation costs. And rapidly increasing volumes from China and other countries has created a strain on last-mile delivery speeds and reliability.
The challenges with international post have created a new breed of parcel service called the parcel consolidator. Upon shipment, using one of these services, packages are routed to a U.S. shipping center by the vendor, where they are consolidated on a pallet or large box by country and receive postage for the destination country. When packages arrive in the destination country, they go through customs in bulk and are dropped into the local post. This process lowers both shipping and cross-border costs and increases shipping speed. The packages are distributed worldwide to the customer's doorstep.
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