It’s no secret that we’re living in the era of international commerce. Global eCommerce sales have increased substantially year over year, with estimates predicting that global retail eCommerce sales will crack $4.2 trillion by the end of 2020.
And while much of this landscape is dominated by big market players like Amazon, companies of all sizes are starting to get in on the action, with pretty impressive results: Research on cross-border eCommerce suggests that companies can boost their sales by an average of 10-15% by extending sales to international customers.
Of course, this is often easier said than done, as there are plenty of unique challenges in international retailing that companies will need to overcome. To help you get started, lets review a few of the biggest issues companies face when going global.
1. Currency Exchange Problems
International commerce relies on clear information exchange on your eCommerce platform. First and foremost, this applies to currency formatting.
Before you begin selling in a new country, you’ll need to consider the local exchange rate and how you’ll display these rates in your eCommerce site. It’s a given that you’ll need to perform currency exchange calculations for your customers, but you have some flexibility in how you implement it.
For example, will your eCommerce platform simply display each price in the region’s local currency? Or could you offer a multi-currency dropdown menu that lets users choose from a list of common options?
This comes down to providing a simple, unified eCommerce experience for customers no matter where they are. Many buyers feel insecure about making international orders in another country’s currency, so setting up a convenient way to translate these financials can help boost their confidence in the process—and in your company as an eCommerce vendor.
2. Getting Lost in Translation
Cross-language translation is a common eCommerce challenge for cross-border selling. Clearly, you can’t sell to a market without speaking to them on their own terms, so if borderless sales are your goal, you’ll need to make sure your eCommerce platform supports translation across web content, marketing materials, and any other form of customer communication.
To make things easier, consider taking a more language-agnostic approach to your eCommerce site design. For example, photos don’t require translation and are a universal way to share information. If your U.S.-centric commerce pages are text-heavy, consider building international versions that feature a more robust library of product images.
This applies to payment methods as well, particularly when you consider just how many e-wallet, online banking, and payment processing options are available to buyers these days. Preferred payment methods vary across country and demographic, meaning that to meet the demands of your new market, you may need to build new payment options into your eCommerce engine.
3. Legal Challenges of eCommerce
Competing in international commerce means understanding and complying with a more complicated legal landscape. International laws surrounding global eCommerce are more stringent than ever across user privacy and data handling. (2018’s GDPR update in the European Union is just one example—U.S. companies selling to EU markets need to play by these rules or face substantial penalties.)
But data privacy is only the beginning. Companies will need to be aware of other regulations governing their sales, including any local limitations that may exist on materials or products coming into the country. Every country has its own rules on what products are allowed, many of which conflict with U.S. standards, so this is a necessary bit of research to undertake early in the process.
In terms of your eCommerce strategy, make sure your sites include reviewed and up-to-date terms & conditions that will cover you as you participate in global commerce.
4. Taxes, Duties, and Shipping
Of all the eCommerce issues and challenges you’ll have to deal with, one of the trickiest is navigating the world of shipping taxes and import/export fees. Every company has its own rules for how these fees are levied, and you may encounter varying types of fees as your business expands: import duties, value-added taxes, goods & services taxes, and so on. Each of these fees will affect your shipping costs and potential costs passed down to the customer, so you’ll need an easy way to calculate these totals before getting your shop set up.
Ideally, you’ll integrate a duties and taxes calculator into your eCommerce system that automatically reports what kind of duties and taxes you can expect for a given order, based on the category of goods sold and the country in question. It’s easiest to integrate tools like these into eCommerce engines with open architecture (like headless), but however you manage it, this is an important tool for managing these more complicated international shipping issues as you establish your cross-border business.
5. Accommodating Increased Business Volume
While having more customers isn’t an unwelcome eCommerce challenge, it’s one that’ll require plenty of attention. A bigger market means more customers—meaning that you’ll be moving more orders, processing more financial data, and managing bigger stores of in-transit inventory. It’s a lot to manage for any company, so you’ll need to tap into the features of your eCommerce platform and its associated systems to help keep things together.
For example, keep an eye on how your sales volume changes with the addition of new markets and prepare your supply chain systems accordingly. Will your warehousing and distribution systems be equipped to handle the new orders? Do you have enough product at the ready to prevent selling out too quickly or time-consuming backorders?
This is a complicated aspect of international sales that will affect every aspect of your business, from your eCommerce platform to your supply chain vendors. Be prepared to rely on your eCommerce engine even further and if necessary, consider more flexible solutions that help you manage this volume.
Overcoming the Challenges of eCommerce Business
The move to international eCommerce is an exciting time for any company, but it’s one that needs to be approached with care. Put some thought into the way you’ll structure your eCommerce experience for different markets, and make sure your eCommerce platform is up to the job of bringing everything together. Some platforms lack the flexibility required to integrate these solutions effectively, but businesses with the right eCommerce engine behind them will have no problem reaping the benefits of international commerce.
This article was originally published in December 2015. The content has since been updated for accuracy and relevance.
