The following is a guest post from David Nicholls, the director of enterprise development and e-commerce for OFX.
It’s a brave new world these days: new markets are opening up and e-commerce has made it possible to be in DesMoines while buying Costa Rican coffee beans or designer handbags from Paris. The consumer is one winner in this new world because they can shop wherever and whenever they want, without leaving the comfort of home. The other winner is the entrepreneur who seizes an available e-commerce opportunity with both hands.
The global marketplace is available to anyone, thanks to advances in technology, but being that winning entrepreneur still requires a solid plan. The following are 10 techniques and strategies that you can use to increase your international sales success.
1. Choose your online marketplace wisely
An internationally established marketplace is the ideal starting point for a new business. You can create your own site but an existing marketplace, like Amazon or eBay, makes it easy and relatively inexpensive to set up a ‘store’. All you need to do is open a seller account and create your product listings. By choosing an established marketplace, the details around selling and shipping internationally are all worked out and easy to leverage.
2. Identify the ideal markets for your products
Even before choosing either an established online marketplace or by creating your own site, you need to figure out which products will be successful in what markets. Solid research will save you time and money, so that you’re not chasing a market that will never be interested in your product. After all, you can’t assume that what works in one place will work in another. Language and cultural differences, buying styles, even politics and the local economic climate can all play a part in determining what products will sell in any given market.
3. Adjust to market demands
If you’ve done the right research—including who your competition is and what they’re charging for their products—you still need to adjust to local market demands in order to make each product a perfect fit. Like what? Make sure the listings are accurately available in the local language and don’t use Google Translate to get you there. Hire reps to answer social media queries who can speak and write the languages you’re working in. Meeting the needs of your customer at every level will go a long way to your success.
4. Check local laws
The old saying that ‘ignorance of the law is no excuse’ is absolutely true. It’s vital that you check into, and comply with, all the customs laws and regulations relating to the products that you want to sell, in the country you want to sell them in. More and more countries have strict regulations regarding labeling, product safety, packaging restrictions and environmental laws that need to be respected. There could also be additional costs to dealing with any given market, in the form of duties and related taxes. You need to consider all of these factors, as they add to your product costs, to ensure that the market you’ve chosen is indeed worth pursuing.
5. When it comes to international shipping, keep it simple
Selling abroad has one big sticking point: getting the product to the buyer. If you’re using an established international marketplace like Amazon, you’ve got ready made solutions at your fingertips. For example, they offer FBA Export, a service which determines which of your products is export-eligible and allows you to ship your inventory to one of their fulfillment centers. After your customer has purchased the product through Amazon, the team at the fulfillment center packs and ships the package to your customer, at no extra cost to you.
6. Remaining competitive in an international market
Once your products are out there and selling, it’s a matter of remaining competitive in the international marketplace to retain and grow your share of the market. There are two major factors in remaining competitive: 1) having a digital marketing strategy that speaks to the customer you’re trying to attract and 2) ensuring you are priced right. The latter is critical. You need to do your research to see what your competitors—local and international—are charging for similar products. Then, you need to factor in your own costs. Look at everything from currency exchange rates to production, marketing and distribution costs, to ensure that you’re maintaining an important profit margin. Without this last factor, there’s no point in being in business!
7. A happy customer is a repeat customer
That’s true for any business but even more so for an international e-commerce business because you are physically disconnected from your customer. High quality products for reasonable prices, fast and affordable shipping and great customer service are all part of the package you need to offer. A satisfied customer will mention you to others so make it worth their while by offering rewards for those precious referrals. If you maintain a conversation with your customers online, through a mailing list and social media, you’ll find that they are loyal and willing to share their interest in your product.
8. Get the word out
In real estate, it’s all about location. In international e-commerce, it’s all about promotion. Success comes by offering great products at the right price, but only if people know about it. Referrals, as mentioned above, are a great source, but it’s still important to promote your business and products to ensure that you reach the widest possible audience. Marketplaces like Amazon allow you to purchase sponsored posts, which ensure that your product comes up on relevant search result pages. Leveraging social media advertising is another great way to get your product front and center with your target market: be where they are and they’ll see you! Remember that promotions, deals and the like will generate interest, but be creative and make sure that you are having a conversation with your customers. They’ll trust you more, which leads directly to buying.
9. Leverage a solid global payment provider and save
You’ve spent time researching your product markets, pricing structures, and costs, to ensure that you can provide a great product at a competitive price. Don’t add to those costs by working with a payment provider service that has exorbitant fees for currency conversion and transfer of funds to your business account. Instead, save up to 75 per cent on margins and fees when you sign up to be an OFX Online Seller. OFX will provide a local currency account in USD, EUR, GBP, CAD, AUD, JPY or HKD to send your e-commerce profits to so you can transfer them to your local business account, at the best possible rate.
10. Start small, but aim high
While it’s true that being first to market is a benefit, starting too big and aiming too high will only make the fall that much harder. Instead, take it slow and steady and grow at a pace that you can manage while still maintaining excellent product quality and customer service. One technique to ensure that you grow incrementally is to enter one international market at a time, rather than trying to be everywhere at once. Pick markets that are as closely related to your own as possible so that you can work out the kinks in your business without some of the pitfalls that come with a completely unknown foreign market.
Like what? If you’re in the United States, for example, you might choose markets that are English speaking, like the UK or Canada. This avoids translation issues as well as the ability to manage customer service and promotions more easily. Over time, and as your success in existing markets grows, you can spread your wings a little further.
David Nicholls is director of enterprise development and ecommerce for OFX. He leads OFX’s efforts to provide simple and secure payment solutions to allow SMBs to operate on the global stage with the agility of a multinational. Mr. Nicholls has more than 15 years of experience in cross border payments and startup enablement. He is a regular contributor to Entrepreneur.com providing advice and opinions for businesses with international focus. He is a media spokesman and has been quoted in The Telegraph and Evening Star in the UK and has appeared on Bloomberg commenting on currency issues for SMBs. Mr. Nicholls is a qualified financial market technical analyst with a degree in Economics and Corporate Finance.