4 Factors to Consider for International Ecommerce

Sometimes, in order to grow you need to move beyond your comfort zone. For some U.S. retailers, that might mean going global—at least online.

While the Internet has helped to blur cultural borders and spur the open exchange of ideas, geo-political borders remain very real obstacles for U.S. retailers looking to expand overseas.

Governments regulate duties, tariffs and taxes within their own borders, and merchants must play by the local rules when expanding into foreign markets.

Retailers must ask: how do we find creative ways to drive new revenue growth, while leveraging the infrastructure we already have in place? One obvious place to start might be with your own Website.

In an international ecommerce survey conducted with ORC International, we found that 93% of consumers shop online—and nearly 50% did so in the last 30 days. The survey polled approximately 10,000 respondents from 10 countries representing a wide variety of markets, from developed economies in the Eurozone to emerging markets within Asia and South America.

What motivates these online shoppers? The survey uncovered interesting similarities, including a shared desire for competitive pricing (71% of all surveyed) and wide selection of products (42%). Shipping costs, duties and taxes are an important factor for 35% of respondents.

Yet retailers must also note that thresholds for duties and taxes vary widely by country and product type. Often the best way for an online retailer to expand internationally, while reducing the impact of local regulations, is to collaborate with a service provider with a strong track record of success in international shipping.

Recently, one of our customers, a producer of high-quality dolls and accessories, recognized their high-end dolls being sold into Canada exceeded the duty and tax threshold. This meant that when the postman delivered the doll to the consumer he also delivered a duty and tax bill—creating a customer experience that was inconsistent with the company’s image.

To satisfy customers, this retailer needed to change its back-end process. Now the checkout page includes different delivery choices as part of the online shopping experience. This gives customers the option to pay duties and taxes up-front, rather than at their front doors—leaving no surprises and providing a better customer experience.

Key factors for international ecommerce success
To help build a successful international online shopping experience, U.S. retailers should pay close attention to the following key areas:

  1. Provide fully landed cost information at checkout: Consumers are more likely to be satisfied if applicable duties, taxes and shipping costs are calculated and provided up-front during the buying process.
  2. Make sure that international shoppers see pricing in their preferred currency: Shoppers will want to see pricing in their own currency on product pages. Don’t make them go into their shopping cart to see how much a product really costs.
  3. Give consumers the option to select their own delivery method: Empower consumers to control their costs through choice of standard delivery (at lower cost) or expedited delivery (at higher cost). Spell out the time frame for each.
  4. Offer several payment options: Debit and credit card usage vary by country and custom so, whenever possible, offer both. Make it easy for consumers who wish to pay by electronic payment systems with PayPal or Moneybookers.

Global online retailing can be an exciting venue for U.S. retailers, especially when you begin with an understanding of what makes those shoppers tick. You also need an appreciation for the varying logistics requirements by country.

To succeed, retailers should focus on what they do best—developing and marketing desirable products—while leaving the shipping and logistics to the experts.

Michael Vassalotti is vice president of International Services at Pitney Bowes.

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