20 years ago, international selling seemed only possible for the largest corporations. Today, businesses of all sizes have the opportunity to do cross-border selling via international ecommerce — without a billion dollar budget, a multinational team, and a physical presence that they own and operate themselves.
According to Oberlo.com, global ecommerce sales reached $2.5 trillion worldwide in 2019. In 2023, it’s estimated to reach $6.5 trillion. These numbers tell us that the opportunity is there, but you have to be willing and ready to make changes to your current fulfillment strategy to meet the needs and demands of your international customers.
In this international selling guide, we’ll go over how to expand internationally and what to consider before you start selling overseas.
Found success at home? Here’s why you should expand abroad
If you’re seeing ongoing success in your home country, it might be time to expand internationally — to increase your customer base, continue to scale, and expand your brand’s recognition. Here are some of the top reasons established ecommerce businesses decide to go global.
“Through our crowdfunding campaign, we ended up shipping to 55 different countries and all 50 states. There’s a pair of Ombraz on every continent, so international shipping is very important to us — not only in terms of costs but also the customer experience.”
Nikolai Paloni, Co-Founder of Ombraz Sunglasses
Bigger customer bases
According to a study by Pitney Bowes, 40% of online shoppers purchased an item sold from another country. If you go from selling in one country to selling in several, you’ll have the chance to expand your customer base significantly. Even better, some of your existing products might sell better internationally than they do in your home country due to a higher level of demand, larger population, or lack of competition.
Brand expansion opportunities
By having your brand recognized internationally, you can expand your brand’s recognition outside of your home country. Of course, when expanding your brand internationally, you must make sure your branding and messaging tailors to the beliefs, values, and cultures of international buyers.
Cross-border purchases will comprise 20% of all worldwide ecommerce by 2022. By expanding into international markets, you’re able to grow your business faster by reaching customers on a global scale, escalating your growth at a more rapid speed than you could do locally. As long as your international shipping strategy is set up to ensure you’re profitable and keep logistics costs down, there’s a lot of unmet potential in expanding across the globe.
6 factors to consider before you start selling internationally
International expansion does come with some challenges. It’s important to know what products can be imported, if expansion will lead to profit, and if you’ll need to find fulfillment resources that can help you navigate each country’s local laws, taxes, and shipping regulations.
1. Cultural and consumer behavior
Cultural norms and consumer behavior in different countries have to be accounted for. Does the country you’re looking to launch into have a need for your product? For example, if you sell football equipment, it might be popular in the US, but it may not be as popular overseas since football is largely a US sport, and ‘football’ refers to soccer in other countries. Additionally, not all products are acceptable in certain cultures or legal in certain countries.
Keeping an eye on international product and market trends will help make better decisions on which products you should offer in certain countries.
2. International pricing
Product pricing also has to be considered. If you’re expanding into international markets, you have to factor in how much spending power the average consumer has. For example, if you run a US-based business and want to start selling in Thailand, you’ll have to offer lower prices since customers have less per capita income.
As mentioned before, shipping will be more expensive internationally, so if you sell an inexpensive product whose shipping cost is even higher than the item, then you will likely have a higher cart abandonment rate as more shoppers will bounce when they’re surprised at checkout. Be sure to keep a very close eye on your landed cost, which takes import duties and shipping costs into effect.
3. Payment and buying habits
Most countries have their own local currency, but payment providers aren’t guaranteed to support every country’s currency. Since your ecommerce business can’t accept cash, you’ll have to ensure that international customers have a way to pay online. Credits cards are the standard online payment system, but depending on the market, you might have to support digital wallets or other payment types like PayPal in order to accept payments.
4. Advertising and marketing differences
Effective advertising in different countries can happen through channels you’re not used to working with. Did you grow your business heavily through Facebook and Instagram ads in your home country? Paid social media might not be as effective in other countries where, for example, traditional TV advertising might work better. Where do these citizens begin their search online? You might need to think outside of Google or Amazon.
When researching how different countries advertise, spend some time learning about how other ecommerce businesses in the country market and what channels have the most opportunity. Keep an eye on your competitors — are any of them selling internationally? Check out how they’re advertising in different countries.
5. Fulfillment costs
To sell internationally online, you can be at home, but you’ll still need to optimize your supply chain including moving inventory and fulfilling orders. However, the costs of international fulfillment can quickly add up. Many ecommerce businesses choose to work with a fulfillment partner that can help them with international order fulfillment — whether through global locations or discounted shipping rates — to help support their international ecommerce strategy.
6. Laws, fees, and taxes
Many countries restrict the types of products that can be imported from other countries. It can even come down to a single ingredient found in your product. On the other hand, even if your product can legally ship to a country, it doesn’t mean it will be cheap. When expanding internationally, make sure you do thorough research on import laws, taxes, and import duties (which can be different for each country) to determine where you can legally sell your products and how much it will cost you to do so. Here are some tips on how to start selling in the United States.
International ecommerce orders will need to stop at customs upon entry to a new country. Sometimes, packages will be handed off to a different carrier (e.g., when you’re shipping from the USA to Germany via USPS, it will change carriers to Germany’s local Deutsche Post). This transfer can cause order tracking to break and delays in transit.
If a buyer is not aware upfront of the additional duties they will have to pay to receive their package, they may never claim it and you are liable for packages that get held up at customs. While DDP shipping may seem more expensive than DDU, you won’t risk orders getting sent back when a consumer refuses to pay additional duties and fails to receive the package when it enters their destination country.
For example, as BAKblade expanded their online presence into Canada, they knew they needed a trusted fulfillment partner with a physical presence in Canada as well as the U.
“We have seen that Canadian customers order more when they know the order ships from within Canada and they do not need to worry about additional taxes if the order comes from the US. From our history through the years with ShipBob, it was a no-brainer to expand into other markets with them knowing that they have done their due diligence to meet the ShipBob standard.”
Marc Fontanetta, Logistics Manager at BAKblade
4 tips to get your online shop selling internationally
Selling internationally can be a challenge at first, but there are ways to make the process simpler. Before you start selling to international customers, here are a few additional tips to help you get started.
1. Check your payment provider
Many payment providers have rules and restrictions in place for countries you can accept payments from. PayPal, Square, Visa, and other payment processors can let you know where they accept payments. Different ecommerce platforms will work well with different payment methods.
If you’re looking for a payment provider to assist in international payment processing, be sure to look for one that has a strong global reputation. To signal trust to customers on the different payment processing options available, you could add their logos to the footer of your website.
2. Pre-calculate shipping costs
International shipping is more expensive than local shipping due to distance, tariffs, and taxes. Before you start selling internationally, make sure you calculate shipping and handling costs to ensure you come out profitable at the end. This includes not only international shipping fees, but also fulfillment costs, warehousing, and shipping supplies.
This may help you find solutions to reduce shipping costs, such as storing inventory closest to your customers — or determine that certain international markets are not feasible for you unless you increase your average order value.
“We partnered with ShipBob to scale up operations in the United States. We’ve seen a reduction of 70% on shipping costs in the US, which helps keep conversions high.”
Greg MacDonald, CEO & Founder of Bathorium
You also have the option to tailor shipping methods available and how you charge for shipping based on the customer’s destination country, including slow and expedited options, flat-rate shipping, real-time rates, or free shipping over a certain threshold.
3. Optimize your online store
No matter where your customers are shopping from, your store’s website is the buying hub. Depending on the size of your business, you may want to open unique online stores tailored for each country or region. Another option is to optimize your current website for international buyers with a multi-language translator tool or create landing pages optimized and tailored for different countries or regions.
For example, many ecommerce brands will provide an option (sometimes with flag icons on the top of the page) for international customers to view a page that’s in their language and featured products available in their area.
4. Get a third-party fulfillment partner
A third-party logistics (3PL) partner can help you with almost every aspect of shipping and fulfillment when launching into a new international market. When researching 3PLs, ask them about their international fulfillment services and how they can help you get set up quickly.
“As we’ve grown internationally and in our general order volume, we’ve seen satisfaction go up. ShipBob was a key player and significant partner in helping manage what became unmanageable. And we have access to live inventory management, knowing exactly how many units we have in each location.”
Matt Dryfhout, Founder & CEO of BAKblade
If international selling is a big part of your ecommerce growth strategy, you’ll want to make sure that the 3PL you partner with offers fulfillment center locations internationally and has plans to expand into new markets. That way, you can split your inventory across multiple locations worldwide to reach your customers faster and track the entire fulfillment process in one central location.
ShipBob can help your international ecommerce expansion go smoothly
Setting up the infrastructure for international shipping can be time-consuming and costly, but a tech-enabled 3PL can help ease the headache of expanding internationally with shipping and fulfillment solutions that help you scale faster. By working with a 3PL like ShipBob, you can launch into international markets quickly and become a recognizable brand worldwide.
International selling doesn’t mean you only have to ship products from your home country. ShipBob offers a growing network of fulfillment center locations across the US as well as Canada and Europe. With ShipBob, brands selling internationally can store inventory closer to their customers. By partnering with a 3PL that offers international fulfillment, you can continue to deliver fast shipping while cutting down on shipping costs.
“Speeding up deliveries and keeping them affordable for customers is a top concern for us. With ShipBob, we can comfortably assign a shipping cost to each order by pinpointing the product weight and destination zip code. In comparison to shipping products to the US from Canada, which can be extremely variable in cost, fulfillment by ShipBob is much easier to estimate because we know the true fulfillment cost.”
Greg MacDonald, CEO & Founder of Bathorium
International shipping discounts
The costs to ship internationally will depend on the destination country. You’ll have to factor in additional shipping costs, such as getting your inventory from the manufacturer to the fulfillment center location by air or freight. It might seem more expensive to ship inventory to multiple locations before shipping to the end user, but in the long run, storing inventory closer to your customers will save you money in the long run.
But no matter where you’re shipping to, ShipBob partners with major carriers to offer shipping discounts for ecommerce businesses looking to expand their reach.
“As our customer base grows, so does our global reach. Having orders shipping internationally, ShipBob’s affordable rates solved our need for international fulfillment capabilities.”
Carl Protsch, Co-Founder of FLEO
Easy ecommerce platform integrations
ShipBob integrates with all of the leading ecommerce platforms including Shopify, BigCommerce, WooCommerce, and others. If you created a custom-built ecommerce site or need a more robust technology solution, ShipBob’s open API allows you to connect your entire ecommerce tech stack to ShipBob’s technology and fulfillment network.
There are a lot of benefits to launching into new markets, but making international ecommerce work and learning to ship products abroad can be a challenge. That doesn’t mean that selling internationally is impossible.
Before you start acquiring international customers, be sure to do research on product demand, fulfillment costs, and international selling regulations for the countries you want to expand into. If you find there is an opportunity, ShipBob can help you get started by offering fast, affordable international shipping to reduce cart abandonment, increase average order volume, and drive more revenue.
If you’re ready to start selling internationally, click below to request a fulfillment quote.