By Mike Cassidy
There is a reason that international markets remain a vast untapped opportunity for U.S.-based e-commerce merchants to increase sales: Selling internationally is really, really hard.
Probably not what you wanted to hear. But wait, as they say, there’s more.
When it comes to selling globally, you don’t have to go it alone. In fact, the work behind expanding into international markets has been getting a lot of attention lately — first at a recent panel discussion in Seattle and more recently in a webinar presented by Signifyd and ThreatMetrix, two firms that protect e-commerce businesses from fraud.
“I’m not going to sugarcoat it,” Signifyd’s Head of Partnerships Lee Hadsock said at the “Path to Growth” panel discussion in Seattle recently. “Selling internationally is not easy. There are a lot of challenges involved. But it’s a great way to expand your business.”
It’s the payoff that successful online businesses need to focus on. The United States is a fantastic market. But if you’ve been selling domestically, you’ve no doubt attracted a customer base. Sure, you can grow that base, but the pace of growth will naturally slow. And the vast majority of new customers live beyond our borders.
Globally, e-commerce is a nearly $2 trillion business today. By 2020, it will more than double to $4.06 trillion, research firm eMarketer says. While the United States will continue to be a considerable driver of that growth, the fastest growth (31.5 percent) will be happening in the Asia-Pacific region, eMarketer says.
“There is a huge opportunity for us to share our product with them,” she said. “There is huge demand. Most are going to argue it’s definitely a necessity.”
Easy to say. But going international can mean dealing with different languages, currencies, taxes, duties and customs — as in at the border and as in how people behave and expect others to behave.
Shipping is a big enough challenge within the U.S.’s borders without adding the drama of an international order. And there is the fear of fraud, given that it’s even harder to know who a customer is from a world away.
Global E-commerce is a Team Sport
Again, you don’t have to go it alone.
“We have partners now who are building applications specifically dedicated to enabling merchants to sell internationally,” said panelist Dan Fertig, global director of agency partnerships for BigCommerce. “There are different ways you can do that.”
Just as automation and innovation have shrunk the world in areas including travel, communication and finance, so too are they shrinking the world in terms of e-commerce. No one needs to build their individual e-commerce infrastructure and storefront from the ground up.
“Nobody got into the business of e-commerce to fight fraud,” Hadsock said. “Nobody got in it to be a payments expert or a shipping expert or taxes or what have you. They would like to sell their widgets.”
Automated programs can deal with translation, currency conversion and tax calculations. Machine learning and data science can spot potential fraud and ferret out digital devices that have been used for evil in the past.
“The tools are out there right now,” said panelist Jordan Brannon, president of Coalition Technologies. “They anticipate you going international.”
And when you decide to take on the world, no one is saying you have to take on the whole world all at once.
“You take inventory again of what you do well,” Brannon said. “For a lot of U.S. merchants, English language is kind of their first step out of the gate.” So, he said, consider English-speaking countries as a first move.
A thoughtful approach is the way to go, Fertig agreed.
“Be deliberate about where you want to expand, where there might actually be demand for your product,” he said. “Don’t just go international because it sounds cool. Test the market. “We’ve seen international expansion done well when the organization doing it is very deliberate.”
For instance, think about your average order value and the duty structure of your target country.
As for shipping, Brannon said he’s seen plenty of e-commerce operators who see shipping as so daunting because they make the mistake of thinking that have to keep up with Amazon.
Maybe Free is More Important than Fast in Global Shipping
“They assume they have to do the two-day shipping thing and they can’t,” he said. “The reality is, most customers buy based on free shipping. That’s the priority. Free shipping. Not so much two-day, free shipping.”
So, consider baking the cost of shipping into your products and take a little more time to get there. Customers can be patient, particularly if they’re waiting for an item that Amazon doesn’t sell, Hadsock said.
Which brings us to fear of fraud, which Hadsock acknowledged is something for e-commerce retailers with international ambitions to think about.
“Fraud is much more rampant internationally, especially when you move into Africa and Asia,” he said.
But again, merchants don’t have to tackle fraud on their own. Hadsock pointed out that Signifyd provides a financial guarantee that means if Signifyd approves an order and it results in a chargeback, Signifyd will reimburse the merchants for the loss, the fees, the shipping and taxes.
Hadsock ran through a couple of examples of Signifyd customers featured in the August “Expanding into International Markets” webinar. The webinar looks at five online businesses who are growing internationally while reducing their fraud losses.
The two Hadsock emphasized in Seattle included a perfume and cosmetic company that had dramatically reduced declined orders in the United Arab Emirates and a jewelry retailer that increased its revenue by 61 percent by selling into Nigeria.
“Who the hell would sell to Nigeria?” Hadsock asked.
The answer, apparently, is a company that wants to see a significant increase in sales. And that, in a broader sense, was pretty much the conclusion the panel landed on after a lively discussion.
“If you’re thinking about moving international, to borrow a line from a local brand,” Hadsock said toward the end of the Seattle event, “just do it. If you’re not thinking of doing it, if you’re not doing it, your competition is. So, move ahead and find the right people to work with who can help get you there.”
Mike Cassidy is Signifyd’s lead storyteller. Contact him at email@example.com; follow him on Twitter at @mikecassidy.