Target and Prepare: Two Keys to Profitable International Online Retail Sales

Target the Right Countries and Do Your Homework to Build Profitable International Online Retail Sales

For those of us who remember the retail world without the Internet, there will always be a mystery and a magic to the fact that you can launch an online store and attract customers from literally all over International business growththe world – any time, day or night. However, as many companies have learned, it takes more than an “if you build it, they will come,” approach to building a profitable international online customer base. Following are some tips to consider:

Some countries are more “online retail” ready than others.

China, Japan, South Korea and the UK rank high in e-commerce readiness, according to a Forrester report that looks at such factors as shipping and technology infrastructure and disposable income to rank 55 countries on their e-commerce potential. (1) Not surprisingly, they make up the majority of buying power along with the U.S. buyers.

Developing countries also offer potential, if companies choose carefully. A study by Cushman Wakefield cited Russia for its potential to establish itself as a key player in the future online market, but a preference for cash over credit – as well as long product delivery times due to rail reliance – will limit early growth to its major cities. (2)  Forrester Research also noted that Central European countries are worth reviewing. For example, Poland’s online buyer penetration is more than double that of Brazil’s. These Polish online shoppers are frequenting the same few online retailers, indicating a need for more competition in the market. (3)

Australia is an attractive online retail market, given its remote location and widespread population that is accustomed to ordering from afar. Projections call for Australian ecommerce sales to total $64 billion in 2016—double the volume of 2010, and a three-year increase of 73% over 2013, according to Australian marketing firm Merlin FX. (4)

These are just a few examples of countries that may fit your company’s global online retail strategy. If you’re unfamiliar with launching global online retail strategies, it’s wise to seek advice from experienced advisors.

Warning: It’s important to localize your website for language and shopping preferences.

Early on, many of us assumed that if a buyer in Mexico or China or Poland could find your website, the odds were good that they’d shop there. Unfortunately, too many companies have seen less than desirable results because they failed to translate the website into the audience’s languages – making sure there were no misinterpretations that could cause their market campaign to actually backfire. If you want to drive sales in a new country, it’s wise to invest in international SEO strategies and translating the site to local languages. For an interesting read on serious bloopers that caused internationals sales to backfire, read the Fox Business post, “Lost in Translations: 9 International Marketing Fails.”

Do your research to minimize your risk.

It’s important to understand each countries’ e-commerce infrastructure, banking practices, tax laws and other business practices before taking the plunge. Merchant banking service provider Payscout recommends that U.S.-based merchants wanting to do business overseas would benefit from a global merchant service processor (MSP) that understands the complexities of the market and can help them manage risk while capitalizing on a truly spectacular growth opportunity. (5)

Plan ahead to control shipping and delivery costs. 

Shipping costs can rapidly escalate and erode your profits if you don’t have the ability to compare carrier rates and services. There are many carrier options to consider and savvy shippers are digging in and finding ways to ship for less. For example, did you know that the U.S. Postal Service International Shipping Division ships over 60 million packages a year, often at a lower cost than many well-known small parcel carriers? In other cases, the best choice may be an in-country carrier who offer the best, low-cost, last mile delivery to your customer’s door.

The key is to have a multi-carrier shipping software system that allows you to easily add and compare all your international carrier options. Your shipping system should also allow you to consolidate shipments by customer and by country to further minimize freight costs, and auto-generate the export shipping documents.

ADSI’s logistics specialists can help you configure the ideal international shipping software solution for your online retail operations. Contact us for more information.

 

(1) Katie Evans, “Why Online Retailers May Want to Explore the East,” www.internetretailer.com, 1/20/14.
(2) Cushman Wakefield, “Ranking of the Countries the Most Developed for Online Retail in the World,” www.cushmanwakefield.com, 9/7/13.
(3) Susie Huynh, “A Comprehensive Review Of The Global eCommerce Landscape, Finally,” www.forrester.com, 9/19/13.
(4) Multi-Channel Merchant, “Why You Need to Reach Customers in Australia,” www.multichannelmerchant.com, 12/11/14.
(5) Multi-Channel Merchant.

 

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