The earth is home to about 8 billion people, many of whom are your potential customers. In 2023 alone, global e-commerce sales were more than $6 trillion. As an ambitious business owner, you can no longer ignore cross-border ecommerce.
We’ve all heard stories of small businesses launching online and within days receiving orders from around the world. A few stories spring to mind, including a bag company from Cambridge, UK that successfully reimagined the old-fashioned satchels!
You might have heard of an artisan soap maker from Marseille, France, who days after going live with their online store, ended up sending products to Tokyo, Toronto, and the UK.
These stories and many more are thanks to cross-border ecommerce and the power of online platforms. It’s easier than ever to start and grow a business that serves a global customer base, and all from your spare bedroom.
Cross-border ecommerce offers huge potential for most businesses. However, international trade presents multiple unique challenges that need to be navigated, from varying regulations and logistical hurdles to cultural nuances and currency fluctuations.
Successful cross-border ecommerce hinges on careful planning and strategic execution, and in this article, we’ll cover the major elements you need to consider to start selling across the globe.
Exploring The Global Ecommerce Landscape
There are only two ways to grow your business. You can either get your current clients to buy more or find new people who can purchase from you. Of course, there’s more nuance to it but that’s the basics.
As I’ve written a lot about the first, let’s cover the second. There’s a range of places you can hunt to acquire new customers and, expanding into new countries is one option.
The UN estimates the global population to be over 8 billion people with about two-thirds having internet access. Major courier services ship goods to an ever-expanding list of countries. For example, DHL delivers to over 200 countries.
In short, you don’t lack new potential clients or the logistics and infrastructure to reach them! You might lack the capital, marketing budget or don’t fully understand the cultural nuances. But they are straightforward problems you can solve with local partners.
There are a few countries/regions to consider research if you’re looking to expand using cross-border ecommerce. Many USA sellers don’t consider expanding into Europe, despite the region having 400 million consumers.
If you’re in Europe, the USA might be tough for you to crack as it requires the same resources as breaking into 50 different countries. But you can start small and grow.
LATAM is also another hot market with double-digit ecommerce growth over the last few years, a trend that’s set to continue. As more people in Africa get an internet connection, I can see certain African countries becoming hot for expansion.
Regardless of the micro-political climate, there will always be opportunities somewhere on earth! And with cross-border ecommerce, you can capture the demand and turn it into cash!
Essential Steps For Cross-Border Ecommerce Success
Expanding into new countries can take several forms, as there’s no one-size-fits-all way plan. That said, I’d encourage taking a measured approach where you start small and ramp up as you build traction. Don’t bet your house on the first spin!
Market research
I’ve covered how to do market research in a previous article, and the basic process is the same when entering a new market. You need to combine your fact-based research with potential customer interviews, allowing you to build up a complete picture of the market.
It can pay dividends for you to work with a local market research firm that understands the nuances of the country, your potential competitors, and might have relationships with people in your target market.
A mistake I see far too often is when the CMO or CEO believes they can extrapolate their current marketing plan to include the new market. You need a completely new plan that maps to the differences in that market and the consumers you’re targeting.
It’s worth creating a marketing strategy document that’s under two pages and outlines the basics. As you learn more, you can expand the strategy document and your cross-border ecommerce marketing plan.
Legal
Now you understand how you’ll reach new customers, you need to ensure you can legally operate in the new market. Failure to operate within the law could bankrupt you and the business.
I’ve seen companies believe they can slap a sticker on their product and claim it’s compliant for the new country, only to be sued later. It’s vital to get the proper legal advice before investing a penny in marketing or stock.
Part of the legal process is proper protection. You need to register trademarks and intellectual property. Also, you should understand how the data privacy regulations work in that region (e.g., GDPR).
Logistics
You could ship products directly from a central warehouse to your customer, you could set up a warehouse in each country, or use a 3PL/4PL. There are pros and cons to these options.
However, with all of the options, you will need to navigate international shipping regulations and customs (including dealing with import duties, taxes, and tariffs). It might take you a few attempts to build a system that works smoothly.
You’ll also need to find a reliable shipping partner who can deliver your packages to the end customer. This could be the county’s national postal service or a courier. Doing a test run is worth it and use what you learn to adjust shipping time and costs.
Localization
You can’t use some AI tool to translate your copy into a different language. Sorry! You need to hire someone with experience in translating and localizing website content and product descriptions.
As part of your expansion, you need to consider how you’ll provide multilingual customer support while being culturally sensitive.
Payments
I’ve left the best to last! You need a seamless way of getting paid that local consumers also trust. The best way is to offer multiple payment options and integrate with local payment gateways.
These options will help you to manage currency conversions and exchange rates. You’ll also want to consider how you’ll handle fraud and security concerns as part of your cross-border ecommerce plan.
Effective Cross-Border Marketing
Entering a new market can feel a bit like starting a new business. You don’t know what works but are eager to try many things and figure it out!
It’s best to split your marketing tactics into a few buckets: short, medium, and long.
- Short-term bucket: Paid ads and PR.
- Medium-term bucket: Email and SMS marketing
- Long-term bucket: SEO and Organic social
Ideally, you’d spend a large chunk of your time (say 50%) on the short-term activities, as this should provide you with some quick wins and momentum. I’d suggest using around 30% of your time on medium-term tactics and the final 20% on the long-term bucket.
This way, you’re prioritizing generating revenue while building a multi-touch point marketing system that will connect with your ideal customer across several channels.
We have a ton of marketing tactics that involve investing your effort (organic social, PR, videos, podcast, micro-influencers, etc.) and a tiny amount of cash that will drive the revenue you need to invest in tactics that require money.
You’ll want to create a budget that grows as revenue does while still allowing you to invest over the next 12 months. I’ve seen many brands spend their entire year’s marketing budget in 3 months without hitting their KPIs and now lack the resources to continue building traction.
Overcoming Common Challenges in Running a Global Business
While you can grow your business with cross-border ecommerce, you’ll likely face many challenges. Thankfully, most of them can be overcome in time.
The biggest one is the time difference. I’m based in the UK and work with many US clients who are between 5 and 7 hours behind, meaning some late-night calls. Thankfully, I can structure my day to start and finish later without disturbing the rest of my week or productivity levels.
You’ll likely encounter issues with language and cultural barriers that might be trickier to navigate. Working with a local partner is essential for navigating these issues and ensuring you have boots on the ground.
Having a local partner can also help you navigate legal and regulatory requirements. It’s vital you stay on the right side of the law and don’t get a fine that will put you out of business.
You’ll need to plan how you’ll handle logistics and shipping complexities, as having packages waiting weeks for customs clearance should be avoidable in most situations.
One of the biggest risks in cross-border ecommerce is handling currency fluctuations and payment issues. Working with a foreign exchange service like Airwallex is vital to your success.
As an unknown brand that’s new to the market, you’ll face an uphill battle to make early sales. So, don’t lose heart. Instead, rely on your plans and keep pushing on!
Getting started with Cross-Border Ecommerce
Reaching billions of potential customers through cross-border ecommerce is highly appealing! As a business owner, you have unlimited opportunities to enter new markets and continue growing your business.
Success hinges on detailed planning, careful execution, and a willingness to adapt. While challenges like time differences, cultural nuances, and currency fluctuations are inevitable, you can overcome them with the right partnerships and a resilient mindset.
Taking your brand global requires a measured, iterative strategy. Start small, test your assumptions, and learn from each phase. Don’t be afraid to leverage local expertise to navigate the complexities of new markets.
By embracing cross-border ecommerce, you transform your business into a truly international success story.
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