Now you’re established in the UK, you might want to consider expanding into overseas marketplaces. David Prosser of Forbes explores your options.
If you trade through online marketplaces, such as eBay, Rakuten and Amazon, you’ll well know that these platforms offer access to a mass market audience, as well as tools and resources that make selling your products much easier. But if your business currently serves only a domestic customer base, now is the time to consider international expansion. Because these platforms also make it straightforward to reach customers around the world.
For example, eBay says 17 million customers visit its UK site each month, but the figure for the US is 60 million; add in other eBay users worldwide and the figure tops 100 million. Selling overseas, then, expands your marketplace five times over on eBay alone. It’s a similar story on other platforms. China’s Alibaba, for example, claims to have 300 million customers in 240 countries.
It’s about quality and quantity
International expansion isn’t just about increasing the size of your potential customer base but also the quality. For example, many businesses specialise in products that have a seasonal element to them, ranging from summer sportswear to kit for coping with the winter weather. By selling all around the world, you can ensure there is always a market for your wares.
“selling all around the world means there can always be a market for your wares”
Similarly, many businesses are keen to target customers in particular high-growth developing markets and the platforms can help here too. In Brazil, for example, MercadoLivre is the most visited site in the country, whereas Alibaba represents an opportunity for you to establish yourself in China.
So far, so good. But selling internationally isn’t simply a question of opening up your domestic listing to a platform’s international audience (though marketplaces such as eBay will allow you to trade in this way). To really take advantage of the international opportunity, you need to overcome the hurdles standing in the way of your business achieving its full potential overseas.
Do your market research
The first of those hurdles is the need for good market research. Rather than selling to the entire world, you need to concentrate on those markets where your product is likely to do well. That means carefully investigating target markets and the likely demand for your product, then focusing your efforts accordingly.
That might mean doing business through a marketplace that has especially good penetration in your chosen territory – in France, for instance, Fnac.com accounts for one in every three euros spent online. Alternatively, it might mean tailoring your offer for the market in question. For example, listing individually in the local language on the eBay or Amazon sites of a particular country.
Check out prices, taxes and delivery options
Pricing and accountancy is another potential challenge. You’ll want to quote prices in the local currency, but you’ll also need to ensure you’re complying with local regulation on sales tax and other levies. The European Union, for example, has just introduced a complicated new system for VAT on sales of cross-border digital services such as music downloads. Coping with the intricacies of other countries’ tax systems may require professional guidance.
Then there’s the challenge of fulfilment: getting your goods to an international customer base. You’ll need to investigate the best way to distribute: direct or through a UK-based fulfilment centre, for example. Consider things like network reach, delivery speeds, returns services and, of course, pricing. You’ll need to talk to postal services companies in order to weigh up your best options.
Remember too that you’ll need more stock if your exports take off. Managing inventory when you’re selling across multiple outlets can be a real challenge – while you don’t want to be left with excess stock, you also need to be sure you can fulfil customers’ orders quickly.
Prepare for cultural differences
Don’t be surprised by cultural differences, particularly if you’ve only ever dealt with British customers. One common observation when UK companies begin to sell overseas, especially in certain European markets, is that customers there are much less shy about complaining. You’ll need robust customer service processes to ensure such problems don’t get out of hand.
For all these challenges, however, don’t be put off – the scale of the opportunity on offer from international customers is too large for a marketplace-based business to ignore. Moreover, many of the hurdles can be overcome by automated tools offered by the marketplaces themselves, and by delivery partners.
“the scale of the opportunity on offer from international customers is too large to ignore”
For example, see what data you can find on particular markets from delivery providers or from specialist market research providers such as Terapeak. Tools such as Selling Manager Pro can help you manage your inventory, Turbo Lister can help you to upload more and more product listings on different sites, and Despatch Manager Online can help you deal with shipping to overseas destinations. It may even pay to work with an online selling consultant that specialises in international sales such as WebInterpret or InterCultural Elements.
Start small but seize the opportunity
If in doubt, start slowly. Target one particular overseas market, say, or only open up certain product categories for international sale. That way you can identify and iron out problems that are specific to your business without being overwhelmed by them.
However you do it though, seize the opportunity. Just as marketplaces have enabled the smallest business to take on giant domestic companies with their own sophisticated web presence, so they can help you compete overseas. The world really can be in the palm of your hand.
David Prosser is a freelance journalist with more than 20 years’ experience writing about business, entrepreneurship and personal finance for national newspapers, magazines and websites such as Forbes. He is former Business Editor of The Independent.