Simplifying International Growth
Growing your brand internationally has never been easier in today’s borderless ecommerce environment
It’s no secret that direct-to-consumer ecommerce is growing at an unprecedented rate. In 2020 alone, North American ecommerce sales grew by 18.1% (Source – eMarketer). With the rise in online purchases, brands want to continue to grow. But how?
First, let’s consider that in 2020, ecommerce sales grew by 16.5% worldwide (Source – eMarketer). This includes Latin America, Europe, Asia, Australia, Africa and the Middle East. Global ecommerce sales are expected to continue to grow in 2021, representing a huge untapped market for most brands.
To expand internationally, it’s important to evaluate certain considerations first.
Barriers to Cross Border Sales: Many brands have attempted cross border sales and missed the mark. There are still many hurdles to overcome but finding international growth today is not nearly as difficult as it once was. Some of the more obvious hurdles that exist when considering international growth include:
- Expensive shipping rates and lengthy delivery times
- Local language and currency differences
- Tax implications
- Clearing customs
- Fraud and security
- Implementing an international returns solution
While international ecommerce is complicated, there are many tools that enable brands to clear these hurdles and do so in a responsible and profitable manner.
Ultimately, every consumer expects to receive their orders quickly and exactly as they were advertised. So how can brands meet these expectations when there is so much unfamiliarity with local markets and their disparate customs and regulations?
Let’s take a look at some of the larger impediments and how brands can overcome them.
- Shipping: Cross border shipping is no easy task. With so many different variables, brands need to consider the following:
- Product Dimensions – both size and weight
- De minimis – thresholds set by country where taxes may or may not be applied based on the value of your product
- Delivered Duty Paid (DDP) vs. Delivered Duty Unpaid (DDU) – Duties and taxes included or not included in your carrier service
- Expedited shipping vs. resource-friendly solutions
Fortunately, there are specialized carrier solutions that can provide a granular solution, down to the SKU, that allow for maximum profitability per order.
- Local Language/Currency: This area is one of the larger barriers to brands since most do not have the time or resources to accomplish such a tall task. Again, there are plenty of solutions available to automate this function. Before making a selection, speak to as many providers as possible and investigate costs, conversion and real-time updates since these variables could be the difference between success and failure.
- Tax Implications: When working with your Finance Department, tax implications will be their first concern. If a team doesn’t have experts in this field or the resources to set up systems for each country, this could easily put international growth on the backburner. Fortunately, there are many cross border tax solutions available in the marketplace.
- Fraud: How do you prevent customers’ payment/returns security fraud when they are thousands of miles away? Leave it to the security experts! Many of the cross border solutions that exist include international security solutions.
- Returns: Select an international RMA that works seamlessly with your operations solution. At the end of the day, you don’t want to be bogged down with numerous, costly returns in a largely manual effort.
Benefits: Today’s ecommerce brands are all competing domestically for the same customers trying to find an edge by effectively and efficiently improving ad spend, product development and providing bundles or subscriptions. While all of these efforts are necessary to incrementally grow and improve the brand, they are missing one key component: growing the brand by growing the entire pie. And the fastest way to do that is by entering untapped markets. Dozens of solutions exist today that enable brands to provide frictionless cross border experiences to their consumers. It truly has never been easier to reach consumers all over the world.
No one knows your brand’s priorities better than you. Time and resources are finite and you need to decide where to spend them. You may be an apparel company that has already decided to focus on mitigating your returns. You may be focused on making your orders as profitable as possible through granular fulfillment. Whatever your priorities include, international growth has never been easier. The barriers and obstacles of yesterday are simply minor hurdles and molehills in today’s global ecommerce environment.
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Article by Matthew Carpentieri, VP of Global Partnerships at Ruby Has.