Expanding e-commerce beyond borders
Why now is the best time to expand overseas
Scott Galvao is a co-founder and a Managing Director of InterCultural Elements (ICE), a Leipzig, Germany based company. In his life before InterCultural Elements, Scott was a ChannelAdvisor UK Implementation Manager for more than 6 years, where he gained vital know-how of both ChannelAdvisor and the international e-commerce landscape. But interculturalism isn’t just limited to work; he holds a degree in both Intercultural Communication and Geography from the University of New Mexico, is a dual American/Portuguese citizen, and his better half and son are both German.
A few days ago when talking to Scott he said that bearing in mind the state of the UK economy, now more than ever is the ideal time to take advantage of overseas sales. Scott agreed to share his thoughts with Tamebay…
Waiting to Expand Abroad?
Waiting for the opportune moment to expand your ecommerce business abroad? It seems the winds of change, and the news, are pointing in that direction. Last Wednesday, the Bank of England governor Mervyn King’s attempt to boost the economy was voted down, and as if the last weeks weren’t tough enough on the plummeting British pound, the BBC reports the King decision was followed by sterling dropping to $1.52/€1.14, the lowest level in 17 months. So is it time to panic?
Probably not, as long as sellers see the silver lining behind the cloud, and act. The current situation caters to those who sell abroad. Besides the fact that cross border trade (CBT) will likely account for greater than 20% of e-commerce by 2017, there are other compelling reasons to expand internationally. And if history is any lesson, many of our UK-based clients reported their foreign sales were the life raft which saved their previously domestic-only businesses through 2008-2010.
Some good reasons for expanding overseas sales
• Diversifying risks: Sellers report varying top products by geography, allowing a wider breadth of stock.
• Listing seasonal stock in Australia enables year-round sales of otherwise seasonal items, and on the flip side take advantage of buying out-of-season stock at lower cost when other sellers aren’t.
• Diversifying currencies: Sterling’s drop makes UK items cheaper to sell abroad, especially into livelier economies like Germany’s. Deutschland will likely avoid a second quarter of slumped growth and dodge the “recession” bullet, and keeping an eye on both countries’ markets, I’d suggest the economic downturn affects the average German consumer much less than their British counterpart.
Mistakes to avoid when expanding abroad
We’re often asked what mistakes to avoid when expanding abroad. The costliest is by far “only doing it halfway”. Golden rule: Expand your business with the same care you would your bread & butter business. Case in point: if you wouldn’t trust a machine to piece together your UK listings, don’t use machine translation. Other examples:
1. Native-speaker, e-commerce-targeted translations: Titles, search terms, and all descriptive text should be translated by native translators whose goal is selling your products, not just converting the words. Online sellers have very repetitious text, so insist your translation service offers free translation of duplicate texts (e.g. descriptions) and discounts on similar texts (e.g. titles varying only by size & colour). Amazon is rightfully finicky about translation quality and actively withdraws offending ASINs.
2. Use listing tools which simplify CBT: Tools are useful in feeding multiple markets/locales from a single stock quantity and providing easier listing access to foreign markets. Many sellers report good experiences using ChannelAdvisor (who offer a good Retailer’s Guide to International Expansion) and eSellerPro.
3. Localize both items & your CI right: Listings only sell when they’re found so ensure optimized categories, browse nodes, item specifics and other details are well chosen (ideally by a native speaker). As important: make sure your store, ad backgrounds and seller info is accurately localized & translated. International buyers generally don’t trust sellers who don’t bother to localize. Finally, ensure you’ve been advised what tax and legal steps you’ll need to take.
4. Customer service & returns collection which cater to international buyers: Amazon already insists you have target language speakers when selling abroad. A best practice is to hire in-house speakers or outsource to a foreign language e-mail customer service. Hint for more sales – offer returns collection in target country (big advantage in Germany)!
5. Are you ready? International expansion can substantially increase your sales, so be sure you can handle the uptick before beginning the process.
All said, it’s a great time to take advantage of the silver lining and expand your business. Just ensure that you avoid the common pitfalls and use these tips to do it right the first time.
Can’t agree more with you Chris! IN fact, I think the best time to expand internationally was already YESTERDAY!
There are so many un-tapped opportunities in Europe, especially in small countries. For eBay sellers, the first thing they should do is start offering international shipping on their UK listings.
Then, based on sales they get from EU, start list on regional eBay sites for maximum exposure.
Lastly, Amazon now also offers one, integrated Marketplace for whole Europe so it would be simply stupid to not use this opportunity to increase sales!