Selling internationally used to be a speculative gamble that small companies hesitated to make, but the internet has lowered barriers, allowing international buyers to connect with U.S. companies and reducing the upfront effort to make international sales. In fact, the recent 2018 American Express Grow Global Survey of over 500 U.S.-based companies selling internationally reported that 30% are currently doing business in foreign markets because a customer found their product online and 15% started purely by accident when an opportunity came to them unexpectedly.
For many companies, ecommerce can offer a feasible, scalable route into international markets by combining payment, logistics, and compliance functions into streamlined online platforms. Increasingly, not only does the web make U.S. businesses discoverable, but ecommerce can simplify the process of selling and fulfilling international orders.
Ecommerce Is An Effective Tool for Small and Mid-Sized Companies, but Is It Right for Your Business?
The American Express Grow Global survey found that technology, including ecommerce, has made selling internationally easier to scale for a large number (43%) of small and mid-sized exporters – perhaps contributing to the average five markets they enter within three years of starting their international sales journey. And ecommerce is a popular option for global sales: 38% of exporters report that they use ecommerce to sell from their own websites and 48% use public international ecommerce platforms.
But it’s important to ask yourself if global ecommerce is right for your business at this time. Keep in mind that ecommerce includes a wide range of situations – from individual hobbyists who sell their crafts on boutique sites through multi-nationals selling large volumes on global ecommerce platforms. Cultural factors and market issues like pricing affect whether products can be easily sold online. Your company’s product or service, and your ability to scale to new demand, are additional considerations.
Service businesses initially considering global ecommerce may wonder if it’s only appropriate for products. The Grow Global survey found that 48% of those who provide services internationally market promote their goods or services through public platforms – a near equal number to product companies (52%). While some location-based services may not be easily adapted for international customers, there’s no general barrier to selling many services internationally by ecommerce and there are an increasing number of service-specific platforms publicly available.
It’s also important to consider whether you are able to handle an increase in demand for your product or services. With 95% of the world’s buyers outside the U.S., international sales may be too much of a good thing if capacity is tight, but for others it could make sense – even those at or near capacity. Some businesses find niche international markets into which they sell at a higher margin and with less competition.
Another factor to consider is how potential customers will interact with your ecommerce experience. For some new to ecommerce, it might be better to learn and experiment with domestic sales first and use lessons learned to progress internationally.
Selecting a Platform
If you’ve decided that you are ready to proceed, then you’ll need to consider your options. You might choose to sell passively and only process occasional transactions to international buyers through the same platform that you already use domestically. If your goal is a larger proactive effort, you can sell through your own website’s store or use public ecommerce platforms. The better alternative will depend on various factors including target industry and geography, comfort with the details of international sales, and how extensive your internal IT capabilities are.
Most companies starting out will opt for a public platform, many of which incorporate language, payment and logistics features that simplify the process. Be sure to specify which markets you’re comfortable selling to and clarify pricing so that buyers are clear about any packaging, shipping and customs costs that will be added to the direct cost of the product or service.
In addition to simplifying the transaction, other advantages of public ecommerce include extensive search engine optimization (SEO) and localization. For example, China is a market that’s difficult for outsiders to enter, but using platforms with a strong local presence and market localization often enables U.S. small and mid-sized enterprises to reach buyers effectively. Some platforms even control the transaction versus simply facilitating it. In this scenario you would sell in U.S. dollars and ship to a domestic address. The platform would take responsibility for the international shipment, logistics, and compliance, as well as local delivery and payment.
Selling to the World….From Your Own Office
The big picture is compelling: the Grow Global survey found that 90% of small and mid-sized exporters view international sales as a major growth opportunity. U.S. companies tend to move quickly into multiple markets once they get started and derive an average 40% of revenue from global markets. In many cases, it starts with web-related activity via customers finding products and/or services online, and then ecommerce facilitates transactions.
Whether you’re a large company eager to diversify internationally and tap new market opportunities, or a sole proprietor looking for passionate buyers wherever they live, ecommerce can be a very effective tool. It can be a relatively simple way for businesses to start your global growth journey, as long as you are ready. Taking the necessary steps to ensure your business can handle an increase in demand and working through logistics and transactions can ease the way. Once you are up and running, you may find ecommerce is an effective channel to grow your global sales over the long-term as well.
To get started selling globally online, you can find extensive coaching and assistance through the U.S. Department of Commerce eCommerce Innovation Lab and the American Express Grow Global program.