Ecommerce provides an unprecedented opportunity for businesses to “go international”. Today, even a 17-year-old’s blogshop can sell to an international market. But just because you can, does it mean you should? Due to the costs involved, there’s a right and a wrong time to focus on cross-border sales. Here’s how to know when you’re ready:

 

The rise of borderless shops

Ecommerce transactions are predicted to become a USD$ 27 trillion (approximately SGD$ 36.8 trillion) market by 2020. In 2016, online transactions already accounted for 8.7 per cent of all retail sales worldwide. More importantly for Singapore, Asia Pacific is the fastest growing region for ecommerce. Total transactions by 2020, within this region, are expected to hit USD$2.75 trillion (approx. SGD$3.75 trillion). It’s not surprising that many small businesses are rushing to grab their share of the pie. However, cross-border sales are deceptively expensive – while anyone with a payment portal and social media can try to run an international business, it takes more time and investment than most of them suspect. Here’s what you’ll need before making that leap:

 

  1. Your business has geo-targeted landing pages

Google’s search algorithms pay close attention to not just relevance, but location as well. For example, say you’re in Singapore, and searching for luggage carriers. If two websites are selling luggage carriers (and both have the relevant keywords), the seller closest to Singapore is the one that’s more likely to appear. Before you even ask, no, you can’t just create five or six websites that are similar, and then change around city / country names. Google expects you might try that trick, and you’ll be red flagged for spamming. Each geo-targeted landing page must be substantially different. For example, a small business might need each page to highlight different regional staff, or promotions unique to the events in the region. We can’t give you all the details on how to make geo-targeted landing pages in this article (you’ll need to speak to a qualified SEO expert), but you can like us on Facebook for future updates. Creating geo-targeted landing pages are a big investment of time; but it’s not really a choice. Your cross-border sales face a nigh-impossible challenge, if you’re constantly ranking somewhere on page 3 or 4 of a Google search.

 

  1. You are prepared to handle customer returns and refunds

Different regions will see different types of customer behaviour. One of the key traits to note is returns and refunds. For example, the rate of customer returns is known to be around 15 to 30 per cent in the United States. In Germany, there is an ongoing problem of high rates of customer returns – enough to cost some retailers 50 per cent of their profits. When we asked some blogshop owners in Singapore however, the rate of customer returns is estimated to be lower than 10 per cent. In short, you must be prepared to deal with a much fussier market, and the resulting costs that come from international returns. For example, you may find that processing a refund is cheaper and quicker than product replacement. Your return policies must be well-defined, and you may want to skirt problem areas as you find them. If you’re not prepared to deal with the logistics of this, it may not be time to focus on cross-border sales yet.

 

  1. You have chatbots or related virtual assistants, for 24/7 service support

Don’t neglect the time zone differences between you, and your overseas clients. If your sales support requires long conversations with clients (e.g. explaining how to use the software you sell), then a 12-hour time difference is going to be a problem. If you’re selling complex products overseas, such as accounting software or machine parts, make sure your support arm is ready to go 24 hours. Customers will get frustrated, if they need to wait till 9 or 10 pm (in their time) to get simple questions answered. Besides using chatbots or virtual assistants, it’s advisable to have YouTube tutorial videos. A well-made “how to” video can save hundreds of hours worth of Skype credits.

 

  1. You have a reliable logistics chain

If your idea of shipping is packing things for UPS to deliver, and then crossing your fingers, you’re not ready for cross-border sales. You must be able to update customers on the status of their order, give estimates of arrival times, have contingencies for delays or missing shipments, and even know labelling requirements to prevent customs interference. You need to have a clear understanding of all the third parties you’re working with, be they rented warehouses, co-loaders, or international courier companies. For example, if you use a co-loader to ship and they lose the delivery, what is their maximum liability? You’re looking at serious trouble if you entrust a $15,000 shipment to a co-loader, which has a maximum liability of $100 if they lose or damage it. The good news is, we can handle this part for you. At Synagie.com, we provide  dynamic warehousing with no initial set-up fees, along with real-time management and automated supply chains.

 

  1. Know the local business cycles and events

While the December holiday season is common to most of the globe, other events are more localised. For example, Black Friday in the United States (24th November) is one of the country’s busiest shopping days, and shoppers are expecting discounts. In China, Singles’ Day (11th November) is one of the busiest shopping days of the year, and definitely worth a special promotion. This also applies to the nature of products sold. In Australia, for instance, the December Christmas period occurs during summer – it’s improbable that there will be much demand for winter clothes. Be aware of these cycles and events, before you head into a particular market. If you have the budget, it helps to employ some local to the area for guidance.

 

  1. You have multiple payment systems

Just using PayPal to transact everything won’t cut it*. Different regions have specific payment preferences. For example, debit cards are generally not used for online payments in India, even though it’s common enough in Singapore and the United States. In America, Amazon actually has a flexible payment system, which you may want your product to take advantage of. Google Checkout, almost unheard of in our region, has a much stronger presence in the United Kingdom. Do check the preferred payment methods of the country you want to move into, and try to accommodate them. *That being said, always have PayPal. With over 190 countries in its network, this is not an option you can forego.

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