What to know before starting an international e-commerce store
By Jeremy Norberg
What sells in January in Seattle won’t always be what you should sell in Sydney in January. While Seattle is hunkering down for more rain, Sydney is bronzing up on the beach. In this post we discuss what to consider before setting up an international e-commerce store. Here are the big takeaways:
- Long-term commitment, collaboration, and communication are essential to expanding.
- Always consider your market. The culture, climate, and more may completely alter your customer persona and even your product offering.
- Pay attention to cost and supply chain management—if you don’t you won’t last.
- Should you outsource or offshore? Decide what’s best for you, your partners, and your customers to answer that question.
- Expanding once can mean expansion all around, and even beyond your expectations. Prepare now and reap the benefits later.
Things to consider
When it comes to expanding your retail business internationally there’s a lot to consider. Taking the time to think through and plan your international expansion will not only save you money but help you know if it’s the right move for your business. From your customer experience, to supply chain logistics, to business intelligence, here are some things to think through and help you create a plan as you expand.
Internationalization and customer experience
Starbucks set an amazing example creating a localized customer experience when they expanded to China. According to Forbes, their success is attributed to their “long-term commitment to the market, well-executed collaborations with Chinese partners, superior supply chains, adopting local technologies, and offering local items on its menu.” When it comes to localization and customer experience there are several ways to set your retail business up for success:
Speak the same language
42% of Europeans never purchase products and services in a language other than their own. So, it’s important to actually speak the language of your customers. But, when it comes to translating your site, there’s a lot of work involved. While there are third-party apps available, we’ve found that working directly with translators provides the best results. People are able to pick up nuances that are simply overlooked when using a translation app. If you’re going to sell in a country with a different language than your own, take the time to invest in not only translating your copy but localizing your content. This simple step ensures you’re not inadvertently creating offensive content through copy mistakes or images that may clash with local values.
What sells in January in Seattle won’t always be what you should sell in Sydney in January.
Merchandise your store for the country you’re in
In an earlier article, we shared how effective merchandising increases sales. When you consider your customers, the seasons, where your products are placed on your site, and what products they are paired with, you can build an effective strategy to increase your sales while serving your customers by providing the products that they need and want when they need and want them.
What sells in January in Seattle won’t always be what you should sell in Sydney in January. While Seattle is hunkering down for more rain, Sydney is bronzing up on the beach. It’s important to consider the calendar year and what seasons each region you’re selling will be in and merchandise accordingly.
Then there are local trends. While Miley Cryus might be crushing the charts in the US (we love you Miley!), she may not be topping the charts in Europe. Knowing who’s hot in Germany is important so you can create a relevant merchandising experience for that local audience.
How much does it cost?
You can price a product too high and discourage sales. Or, worse, you can price a product too low and squander the possibility of profits. But, when done correctly, price can help you get new customers, keep existing customers, turn inventory into cash, and make a profit.
Get help setting your prices. What are local taxes? Are there import and export tariffs? Who are your local competitors and is your item priced competitively to sell in that market? We’ll come back to this topic in a little bit.
Internationalization and supply chain
Did you know you can’t ship kangaroo meat to California? Don’t worry, it’s not as bleak as it sounds. A friend received a prescription for dog food for her dog with severe allergies. When she tried to ship the dog food from Canada to her home in California, she received a notification saying the company legally couldn’t ship to California as that state didn’t allow kangaroo meat. While this is a huge win for kangaroos, tracking these regulations is a major headache for humans when selling internationally.
Do we ship there?
That’s why it’s important to understand the rules and regulations of where you can ship what to. One of our clients has factories in two different countries. Australia won’t accept imports from one of the factories. This means Australian orders for those products have to route through an entirely different manufacturer—despite being otherwise identical.
So, how do you navigate the shipping process? First work with someone who can help explain the constraints your specific type of retail faces. Then, set up your shipping.
What about returns?
You may also want to work with someone to help figure out your return policy. How can you offer a fair policy that builds trust with customers while not losing money? Regional regulations and cultural expectations around acceptable return windows and reasons can differ wildly around the world. Taking the time to understand and have a plan in place upfront increases your credibility as a brand and ensures you don’t lose a region’s trust as soon as you land.
What are we selling?
Different regions require different products. For example, if you sell books, different countries need the book in their local language. It’s important to manage inventory and product variations so that each local market gets the right product. If all your French books end up in Panama, you’ll have some disappointed readers and a whole lot of waste.
Where do we get the stuff?
According to Forbes, “People are increasingly expecting and calling on businesses to uphold higher social and environmental standards.” Forbes found that, “Nearly seven in 10 US Millennials actively consider company values when making a purchase,” and they’re not alone. “Across other generations, the trend is moving in the same direction, and values-based consumers already make up a significant proportion: Today, four in 10 Younger Boomers tune into company values, along with a third of Older Boomers.”
As you expand operations, your supply chain will likely also expand. As consumers continue to vote with their wallets, choosing purpose-driven businesses with ethical practices, it’s more important now than ever to know where you source your material from and ensure that both the people and planet were treated well during the process.
Then there are things like logistics. Is speed important? Then you may need more suppliers closer to your various markets. Again, this is where it helps to pull in a supply chain expert.
Where do we store the stuff?
This has a lot to do with customer expectations and satisfaction. If you need to get products to your customers quickly, you’ll need more warehouses across the regions you serve. This is also another area where it’s important to be aware of the local laws, taxes, etc. Can you store goods in this country? How much does it cost? Is it cheaper to store them somewhere else?
How do we know how much stuff we have?
Keeping track of inventory across multiple countries is difficult. That’s why it’s important to architect your technology from the get-go and invest in the right PIM. A PIM is the source of truth for your product data. Having a central source of truth allows you to manage the data in one place and have it propagate everywhere else. With the right PIM, you can not only track your inventory but also manage constraints—like no kangaroo meat in California—so your customers only see available products.
How business intelligence can help you expand internationally
When we talk about business intelligence, we’re talking about turning cash into growth. When you have the right business intelligence solutions in place you can protect margins squeezed by competitors and market forces, while reporting data from across the business, to drive continuous improvement.
Manage your data
While new privacy laws have limited what 3rd party data is available in the marketplace, you still own your own data. Take the time to interpret this data and use it to plan for the future. When do people buy your products? Are there certain variations people buy more of? What colors do they like? All of this information can not only help you plan your inventory for the future, but it can also help you know how to better serve your customers by creating products they enjoy and buy, and prevent you from pushing products onto customers because you’re sitting on too much inventory and just need to move products.
Other things to consider
Outside of customer experience, supply chain logistics, and business intelligence, there are a few other things to be aware of before you start to expand your retail business internationally.
Know the tax laws
You guessed it, hire the tax guy! If you don’t know the tax implications of selling in different markets, tax days can catch you by surprise, and come with a bigger bill than anticipated.
Know the privacy laws
Make sure it works, long-term
Technology is like a car: it needs to be maintained. Imagine if you forgot to change your oil for two years; there’d probably be some repercussions. In the same way, your tech stack requires ongoing maintenance, and when that gets neglected what was a simple oil change can quickly become a whole new engine.
Find the right partners
Successful retailers not only provide products and services to customers, they also work across multiple continents and companies to source, manufacture, curate, deliver, and service their offerings to customers. While it looks simple on the surface, keeping everything in sync requires many people and processes to continue moving smoothly at scale. At Assemble, we partner with retailers to build and maintain retail ecosystems with technology. If you’d like to learn more about how we can help you, consider signing up for an Everyday Retail Bluprint, and we’ll work with you to come up with a plan to help you scale and grow.
This article was written in collaboration with Rachelle Cummings.