Cross-border ecommerce has taken off in the last few years.
A recent survey found that 32% of online shoppers bought more from retailers located in other countries, and 51% plan to do it more often in the future. Retailers who have been considering selling internationally have an eager and willing market waiting if you make the right moves.
Between translation, currency exchanges, shipping logistics and international law, it might seem like international ecommerce is intimidating to try to tackle. However, with technology built to streamline your business and by teaming up with partners specialized in international shipping logistics, selling internationally is within reach.
In this article, we’ll break down how you can take your ecommerce site to the world (and why):
- The advantages of selling internationally
- Where you should start selling
- How to enable international ecommerce
- Choosing how to sell
- Translation and localization
- Cross-border retail pricing
- International ecommerce taxes
- International shipping
- Return policy
- Marketing
Payment service providers: how to spot hidden fees and negotiate the best rate
Make sure you’re prepared for international ecommerce with a payment provider that’s on your side.
Why should I start selling internationally?
Ecommerce already breaks down barriers. Online shoppers aren’t bound by time and space. Whether they’re in your city with a hankering to shop at 3 AM or they’re located halfway across the country and want to make a purchase, they can. Because you’re available online, you don’t lose those sales.
International ecommerce takes that principle to the next level. Now, instead of being across the country, a shopper could be across the globe. You open your business up to a much wider customer base, provided you can let them know who you are and why they should shop with you.
While selling internationally comes with its own unique costs, it also has the potential to be lucrative because of that expanded customer base.
What countries should I operate my ecommerce business in?
Where you decide to set up shop depends on your budget for shipping and localization, as well as the potential market for your products.
As an example, a Canadian shoe retailer wanting to open up their products to the American market would be set for localization—even with spelling convention differences, their English site would function just fine for American shoppers, and Americans and Canadians use the same shoe sizing system. They would only need to factor in shipping costs, which might mean shipping to Alaska and the lower 48 states, but not Hawaii.
Meanwhile, an American Spanish book retailer looking to open up their products to the Canadian market has two points of consideration beyond shipping costs:
- Spanish books are a more niche product in Canada than in the USA’s other neighbor, Mexico.
- In order to sell products in Quebec, one of Canada’s most populous provinces, they’ll need to create a French version of their website, emails, packaging and product details.
It may be more worthwhile for the Spanish book retailer to expand into Mexico first, especially as they might already have a Spanish version of their website. They can then revisit expanding into Canada once their Mexican operations are up and running profitably. Niche markets and translation costs can certainly be worth it, but starting with the surer bet gives the retailer more security and a bigger budget when it comes time to try to crack other markets.
To determine where you want to sell, start with market research about the country you want to expand into. What other ecommerce companies have done well there? What is the average buying power of its citizens? Is there an official statistics and data agency, like Statistics Canada, tracking retail sales data?
Next, research the laws about ecommerce, taxes and illegal goods in the country. Contact a lawyer for help with this step—it’s best to have expert advice.
Once you’re sure there’s a market opportunity and no insurmountable legal hurdles, you can start drafting up a budget to get your new international operations off the ground.
Are there any products that can’t be sold internationally?
There are heavy restrictions on some products that make international ecommerce a no-go. CBD oil, for example, can be sold internationally in select countries, but there’s a lot of red tape around the process. The CBD generally needs to be hemp-based, and there are strict regulations on how much THC can be in the oil.
Firearms are also tricky. US law allows for the export of firearms, but other countries need to be on board as well. Being able to export doesn’t mean much if shoppers in your prospective new market can’t buy your goods.
As a rule of thumb, any product with domestic restrictions—such as CBD, firearms, alcohol, tobacco and vape products—will be difficult to sell internationally, but won’t always be impossible.
But even if you don’t sell any of the typically restricted products, you still might not be able to sell your entire catalog in a new country. There may also be laws and restrictions on products that are perfectly fine at home. Baby walkers are illegal in Canada, for example. If you’re looking to start selling your infant care products in the Canadian market, you won’t be able to sell baby walkers to those shoppers.
Consult a lawyer specialized in exporting to determine what laws you need to follow.
How to enable international ecommerce transactions
Selling internationally is a big opportunity, so it’s important to do it right. Once you’ve picked your new international target market and made sure you can sell your products there, it’s time to get your online operations ready.
Choosing how to sell
Before you sell internationally, you’ll need to decide how you’re going to sell. You have two options: international marketplaces or your own website.
International marketplaces include Alibaba, Etsy and eBay—marketplaces where customers expect to buy from sellers in faraway countries.
While selling on these platforms puts your products in front of shoppers who potentially didn’t know you were an option, they come with setbacks. They all have their own fees on top of the taxes and payment processing you’ll need to pay, and they get the brand recognition, not you. You get little control over how your store page displays and what your product pages look like, and you blend into the crowd as just another name instead of a company with a unique presence.
If you decide to internationalize your website, you won’t have to pay extra transaction fees and you’ll be in charge of your brand and customer experience. You’ll need to do some work to get your name out there—marketing through ads and social posts, for example—but the amount of control you get in return can’t be underestimated.
Selling through your own site also bypasses any potential stock level management hiccups without the need for an integration. With Lightspeed eCommerce, for example, every time an item is sold, your stock levels are automatically updated across your business. It’s a few seconds of automatic updating in the moment that save you time and headaches across the board.
Translation and localization
If you plan to expand and sell internationally in countries that speak a different language, make sure you’re prepared.
Some jurisdictions—like, as noted, Quebec—require you to translate your online operations in their entirety, including all of your product and information pages and your email notifications. Even in countries that don’t require this, you’ll reach more shoppers if they can access your site in a language other than English. It’s just good business.
But beyond that, you’ll need to be able to communicate with customers in their language—if you hire someone to translate your site, you might also need to hire someone who can provide customer service in the local language, too. You could also hire a freelance translator as needed.
Keep in mind that even if two countries speak the same language, there may be significant differences in spelling, grammar and word choice conventions between them. If you’re planning to open your site up to the Latin American market, you’ll need to account for dialect differences lest you end up innocently describing a product with a word that’s offensive in some countries.
Cross-border retail pricing
Sure, you could just sell to international customers in your local currency. However, that’d be confusing for shoppers, as they’d need to convert currencies on their own as they browse. It’d be a hassle and feeling hassled leads to abandoned carts.
A better idea is to enable the local currency for the country you’re looking to start selling internationally. Currency exchange rates are constantly changing, so trying to keep your entire store’s prices up to date might sound intimidating, but good news: ecommerce platforms like Lightspeed eCommerce automate the process for you. When shoppers choose to browse your site in their currency, they’ll see prices based on live exchange rates.
Even though your international shoppers will see your prices in their local currency, you should still be getting paid in your currency, which is good news for your bookkeeping—you don’t need to keep track of currency exchange fees while selling internationally.
International ecommerce taxes
Alright, now we’re getting into the tricky stuff: taxes.
Your shoppers generally pay the taxes for the state, province or country they’re located in, not where you’re located (though this isn’t a hard and fast rule). Which means when you open up your business to international markets, you’re agreeing to take on the tax collection and reporting requirements for wherever it is you’re doing business, as well as your domestic market.
There’s no one-size-fits-all advice here. Tax law is complicated.
The good news is that platforms like Lightspeed eCommerce can track tax rates for you so you don’t need to enter every individual rate.
When doing business in a new country, check with an accountant to see if there are any unusual tax rates you need to be aware of and what your liability for reporting taxes is.
International shipping
Free shipping is a winner for online shoppers, but should you offer it for international transactions? The cost of international shipping might make it prohibitive to offer, though you could set a much higher threshold to qualify.
Third-party logistics companies like EasyPost and ShipStation are absolutely necessary here. You could handle international shipping yourself, but why would you? They’ll take care of the details for you—just make sure you have the Harmonized System codes for your products so your shipping partner can accurately calculate any applicable tariffs.
Return policy
For the most part, your return policy shouldn’t be different for your international shoppers. However, if you’ve been covering the cost of return shipping for your domestic shoppers—and you should be, it’s a winner—you’ll need to decide if you want to do that for international shoppers, too.
Whatever you decide, be sure you clearly state what aspects of your return policy apply to your domestic and international shoppers on your website.
Marketing
Once you’re all set up for selling internationally, time to let potential shoppers know.
For maximum impact, you’ll want to set aside some budget for paid social media ads. When breaking into a new country, you can’t be sure your current organic social media reach will be enough just yet—you need to establish a presence first.
Research the demographics of each social media platform and platform usage statistics in the country you’re selling in to decide where to start. You might want to consider advertising a grand opening promotion to entice potential shoppers.
Get your business set up to sell internationally
Selling internationally takes some work to set up, but it can be worth it. In exchange for some time setting up new currencies and shipping methods, potentially a little translation, you open your business up to whole new markets. With more online shoppers willing to buy cross-border, there’s never been a better time to consider it.
Having a platform designed to help you internationalize your store makes it just that much easier—and that’s where Lightspeed eCommerce can help. If you’d like to talk about how Lightspeed helps you go global, get in touch.
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