Expanding internationally seems like the most obvious way of growing your company. If you’re already the market leader for your type of business in your home country, where would you try to look for growth if not abroad? If you have strong local competitors and have to give up on some of your margins to remain in the game isn’t it obvious to try your luck elsewhere?
It is. Only, if you don’t do it right, it may come at a price.
Having worked with thousands of ecommerce merchants who tried their luck abroad, here are some of the challenges I have observed.
Different consumer expectations in different countries
It’s common knowledge for Cross Border Trade veterans but may be less obvious to merchants who until know have only contented themselves with their domestic market – consumers behave differently in different parts of the world and have different expectations. Germans, for once, has the highest return rate in Europe, with 41% of orders being returned. The return rate there is more than twice higher than in Italy or Spain. You should also expect German consumers to thoroughly read through your terms and conditions and privacy policy and point out anything which is not in accordance with the German law. Ouch!
International taxes
Once you start to export, you should make sure you’re up to speed with the local tax regulations in the countries you’re selling to. If you export to the European Union, once you have exceeded a pre-defined threshold, you need to register for paying the VAT tax on the goods that you sell in a given country (please note that this explanation of the VAT regulations starts by saying : “Due to the complexity of
the law, this information is not exhaustive”). The recently introduced GST in Australia works in a similar manner.
Countries with unreliable postal services
You’d be surprised by the number of shipments that will mysteriously get lost once you start delivering to countries such as Italy or Greece. In Russia, you should generally only deliver to business addresses. In the countries with many islands (such as France) delivery rates may vary a lot between a mainland and island addresses.
Custom duties
If you export to Canada a good whose value exceeds $150 (it’s called the de minimis threshold), the good risks being stopped at the border and your end consumer may have to pay an extra fee in order to receive it. Other countries have their own de minimis thresholds above which the products you ship may be eligible for custom duties.
How do you navigate across this incredibly (and increasingly!) complex landscape? The best advice is to look for some help, for instance with the experienced Cross Border Trade experts at WebInterpret.
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