British goods are in high demand. Behind China and the USA, PayPal’s 2018 Cross-Border Consumer Research report found the UK to be the third most popular online destination for international shoppers.
Shoppers in the Middle East are most likely to shop cross-border, with the top motivations being better prices and access to items that aren’t available in their country.
With British brands enjoying interest from overseas shoppers, it presents a good opportunity for more to grow their eCommerce business. And there’s some compelling reasons why you might be considering international expansion. It can help you reach new customers, spread your business risk and increase profits.
So why aren’t 44% of British retailers selling their products overseas?
Retailers are being put-off by a number of factors including the cost of expanding, language barriers, rules and regulations, and most recently, Brexit.
But, with the right guidance and some proper planning, shipping internationally can help unlock a new market that’s eager to buy your product.
There’s a lot to think about before you can launch internationally, so, we’ve put together our three steps to international shipping for eCommerce retailers to help you plan your strategy.
1. PUTTING A PLAN IN PLACE
You want to be successful, so, before deciding whether or not you’re ready to go global, there are some essential business matters to think about.
THE SCALE OF EXPANSION – WHERE ARE YOU GOING TO EXPAND YOUR SHIPPING AND SELLING TO?
International expansion doesn’t necessarily mean that you need to serve every country. To improve your chance of success overseas, it’s worth carefully considering which regions you’re going to begin selling in. There are several criteria you can use to do this:
Where is your existing demand?
It makes business sense to start with the countries where there is already an established interest in your products. With the help of your marketing team or agency, you can use your insights platform to identify and analyse where your website’s visitors are located.
Which countries can you already market to?
Marketing will play a large role in the brand awareness and product launch overseas. As a British retailer, your current website and communications are likely written in English, therefore, expanding to other English-speaking countries will mean there’s no need to incur the cost of a multi-lingual website or customer service. However, you will still need to familiarise yourself with regional holidays and do some extra marketing.
Which countries are quick and easy to ship to?
Logistically, it’s easier to provide order fulfilment in countries that are nearby. And, with 50% of shoppers in Western Europe saying they are comfortable making a purchase on a foreign language site (PayPal), these nearby countries would make a good starting point for British retailers looking to expand without having to invest too much in marketing.
CHOOSING THE RIGHT PRODUCT OFFERING – WHICH PRODUCTS WILL YOU MAKE AVAILABLE TO YOUR INTERNATIONAL AUDIENCE?
Not all of your current product offerings will be suitable for international sales. And, to help keep things simple as you begin shipping overseas, it’s best to curate a smaller product offering for your new audience.
Consider the following when deciding which products to offer when shipping overseas:
Can the item in question sustain a longer logistics route?
Large or fragile items might not travel well, and international shipping might require different methods of travel to your domestic order fulfilments.
Air freight is one example – flying a fragile item to its destination comes with the risk of damage. If you repeatedly have to replace damaged items, it may not be cost effective to offer that fragile product to international shoppers.
Look for items with a low return rate
You will need to have a reverse logistics plan in place when you start selling internationally so you can offer the same easy return process available to domestic shoppers. But, choosing items that are already known to have a low returns rate will help to save costs.
OPERATION MANAGEMENT – HOW WILL YOU KEEP TRACK OF YOUR STOCK OVERSEAS?
Language barriers and time differences can make it difficult for retailers to keep track of overseas operations. It’s critical to have a plan for monitoring demand and profitability of your international expansion. Some ways to monitor your international operations include:
Use real-time tracking to keep an eye on each part of the supply chain; including your inventory
Software like MySEKO can help eCommerce retailers manage international order fulfilments by connecting you directly with your factories and warehouses in other countries. It’s important to have visibility over stock levels to avoid sending too much and/or incurring costs on items that aren’t selling.
See how retailer, Reiss, used MySEKO to make their international expansion run smoothly > https://www.sekologistics.com/us/case-studies/reiss/
Hire an international operations manager
Additionally, you might think about investing in a dedicated team to run the international aspects of your retail business and have them based at the location that you’re looking to expand to. However, this might not be cost-effective until your international strategy is up and running and you’re sure it’s a profitable market.
2. SETTING UP YOUR INTERNATIONAL SERVICE
Once you have identified a plan, chosen which countries you will ship to, decided on the products you will make available and determined how you’re going to manage operations, it’s time to start looking for a logistics partner to support your international growth.
With the guidance of a seasoned logistics partner, you can begin calculating the costs you will encounter by shipping to your chosen country.
CHOOSING A LOGISTICS PARTNER – WHAT SHOULD RETAILERS LOOK FOR?
Depending on your needs, you may require different things from your logistics company. Some questions to consider are:
Does the logistics company have distribution centers in your desired location?
Look for a logistics partner with distribution centers worldwide, as this will help shorten delivery times allowing you to provide customers with a fast service.
Can the logistics provider meet your international customers’ expectations?
There are regional differences when it comes to what shoppers expect from their delivery service. For example, in the UK next day delivery is common, and shoppers expect to have it as a choice. But in Japan, most urban areas are used to an efficient same-day service.
Your logistics partner should be able to advise you on regional expectations and be able to meet them.
WORKING OUT THE COSTS – WHAT CHARGES SHOULD YOU ACCOUNT FOR?
In the early stages, you’ll be able to negotiate delivery and operational costs. This will help you calculate the charges that need to be passed onto international customers so your expansion is profitable. Some ways you can calculate costs include:
Integrate tools to calculate the cost of delivery to each destination
The first cost to consider is delivery. There are a number of helpful tools to calculate how much this will cost you, and your logistics provider can serve as your advisor.
You should also remember to take insurance into account - this may increase the cost of delivery, but it will protect your stock.
Research tax and customs charges
Due to the fact that each country will have different tax and duties, you will need to be thoroughly aware of which ones apply to your business. For example, this means you could end up paying tax on items that you transport into a country, even though there is no guarantee they’ll be sold there.
One solution to consider is a bonded warehouse where dutiable goods can be stored, and tax is only paid once the goods are acquired; allowing for a bit more flexibility. Bonded warehouses allow you to move your products between countries without paying tax multiple times.
LAWS AND REGULATIONS – DOES THE COUNTRY REGULATE THE SUPPLY CHAIN?
Depending on where you’re shipping to, there may be regulations that will affect the way you run your supply chain. And with the uncertainty of Brexit, retailers need to be more aware than ever of the laws affecting international delivery.
Work with your logistics partner to establish solutions to any regulations
Japan is one country where strict quality controls apply to the delivery of goods, and all items need to be X-rayed. This can slow down the supply chain considerably but, by making adjustments, retailers and logistics companies can overcome these challenges.
See how SEKO and Cath Kidston adapted the supply chain to meet Japan’s regulations > https://www.sekologistics.com/us/case-studies/cath-kidston-japan/
Watch for any information on how Brexit could affect international shipping
At the moment, nothing has been agreed with regards to Brexit and there is limited information. At this stage, you can register for a UK Economic Operator Registration and Identification (EORI) number to prepare to pay duty and tax in the EU. Once Brexit is finalized, you can continue trading without interruption.
In the meantime, we recommend studying the government’s guidelines which can be found here.
3. LAUNCHING YOUR INTERNATIONAL STRATEGY
The recommendations given will help guide the major elements within your international expansion. But there are a few practical things to address that can be easily forgotten. While PayPal’s report shows that shoppers’ attitudes towards buying from a foreign eCommerce site is largely positive, things like currency can still be a barrier.
To overcome this, retailers could consider doing the following:
UPDATING YOUR MARKETING MESSAGE
Your marketing message needs to be adjusted to suit the new country being served. This adjustment will help make the shopping experience resonate with your new customers.
Localize your website content
All the content on your English-speaking website needs to be translated for your international customers. But, localisation doesn’t mean a straight translation, it’s more about adapting your marketing message for cultural context.
This is an expensive task though, especially if you’re just testing the waters with international expansion. As a minimum, you need to be aware of regional holidays, like China’s Singles Day, and work with your logistics provider to cater to them.
Convert any costs into local currency
Research shows that 76% of shoppers said they’d prefer the option to pay in local currency on an eCommerce site (PayPal). So, to encourage conversions on your eCommerce site, give shoppers the option to pay in the relevant currency, rather than sticking to GBP.
PROVIDING CUSTOMER SERVICE – HOW CAN YOU REPLICATE YOUR EXISTING CUSTOMER SERVICE FOR AN INTERNATIONAL AUDIENCE?
Chances are you already have a clear customer service process in place for domestic sales, and your international customers will expect access to the same level of service.
Set clear expectations for delivery and returns
Whatever eCommerce fulfilment options you offer, make sure they are clearly outlined on your website in the correct language. This will help your customers get a better idea of the service you and your logistics partner will provide.
Have multi-lingual customer service
Should any issues arise, you will want to make sure your customers can solve them easily, and providing a customer service team who can communicate in the correct local language is crucial. Again, this can be an expensive addition to your international strategy, but outsourcing can be a cost-effective option and a happy customer is priceless.
With these final housekeeping actions, you should be ready to launch your international strategy.
The international market presents a huge opportunity for British retailers. British goods have a reputation for high-quality production and design, so there’s already an established demand overseas and it makes sense to capitalize on it.
Pitfalls can be avoided by careful preparation and finding a logistics partner with the knowledge and experience to support your expansion.
For more expert tips and advice on taking your business global, get in touch.
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