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The e-commerce segment has witnessed impressive growth in recent years. Sellers today think beyond supplying products across the country because international e-commerce business offers a far bigger growth opportunity. Entering new markets means a chance to increase the buyer base and revenues.
According to Statista, the global e-commerce market is set to cross the $6 trillion mark by 2024. Another survey estimates that the cross-border e-commerce market is likely to touch $4.8 billion by 2026, with a staggering annual growth rate of 27%. The growth rate is surprisingly high, considering the moderate decline in global retail spending.
The benefits of going international with an e-commerce business are undeniable, but business owners cannot overlook the challenges involved. High competition, currency complexities, regulations, and cultural hindrances may stand in the way. Besides these, the current geopolitical landscape and ocean freight issues are perhaps the biggest reasons to worry.
The World Economic Forum notes that the Suez Canal and the Red Sea crisis are affecting the operations of shipping firms. With these areas handling 30% of the world’s container traffic, a disruption here spells doom for e-commerce businesses seeking international expansion.
A robust shipping model can be a game-changer in these circumstances. In this article, we will explain how e-commerce businesses can build the foundation with a resilient shipping strategy.
Building an International E-Commerce Business: 5 Best Practices
An early 2023 survey showed that over half of manufacturing and retail companies were engaged in cross-border e-commerce sales. Additionally, 8% of respondents had plans to ship products abroad in the following 12 months.
While these numbers look promising, they also indicate growing competition in the global e-commerce sectors. Standing apart amid such stiff competition calls for planning and strategy. These best practices can pave the way to sustainable growth and success.
1. Identify Your Target Markets
Knowing your target audience is the first step on the road to success, whether selling online or offline, locally or abroad. When going global with your e-commerce store, think beyond just landing visitors from all over. Of course, localized content and SEO can drive huge traffic, but conversion rate matters more.
What’s the use of 100,000 random clicks if almost none of them convert? Instead, look for 500 clicks from people with the intent to buy. That will happen only if you know your target audience and ramp up your marketing strategies to win them over. You will save time and effort by narrowing down your audience and targeting the ones with high potential.
Define your potential buyers with details like demographics, needs, expectations, and budgets. Conduct surveys and categorize your audience, specifically when planning to sell in multiple locations. This will help you localize your marketing strategies. Also, gather feedback to fine-tune your tactics as you go. At the same time, pay attention to competitors and their strategies.
When it comes to expectations, check what your target buyers want in the context of shipping. Do they prioritize express deliveries? Does delivery cost matter to them? Do they seek multiple shipping options? Answering these questions will help you build a resilient shipping strategy.
2. Understand Country-Specific Customs and Shipping Regulations
The country-specific customs regulations and shipping requirements often complicate the journey of e-commerce businesses seeking a global presence. Failing to understand them can lead to additional fees, delays, and even confiscation of goods.
Data shows that 41% of e-commerce businesses struggle with customs regulations and Harmonized System (HS) codes. The number indicates the significance of understanding the local customs and shipping regulations of your target market before diving into the market.
For example, if you want to sell electronics in the European Union market, you need to know that the zone has strict regulations on electronic goods. CE marking is mandatory to certify that the products meet EU safety standards.
3. Select the Most Cost-Effective Shipping Option
When it comes to building a resilient international e-commerce business, choosing the right freight option is essential. You must explore different shipping methods and select the appropriate one, depending on factors such as the size and weight of your products, destination, and cost considerations.
For instance, ocean freight is right for large items like furniture. In this case, FCL shipping is ideal for transporting bulky goods in large volumes. You can save significantly by booking a full container at a flat fee.
With the LCL shipping (less-than-container load) model, you get a part of the space in the container. Conversely, air freight is a good choice for small, high-value items like jewelry.
The global freight forwarding market is booming, and there are many reliable providers offering top-notch services for international e-commerce businesses. You can compare options to find a reliable and cost-effective provider.
4. Factor in All Extra Costs for International Shipping
Finding the right freight provider and shipping model is a good start when chasing global expansion. However, at this point, remember to consider the extra costs of international shipping. According to a survey conducted in 2023, 8 out of 10 shoppers prioritized free shipping in their online purchases, both domestic and cross-border.
Shipping costs, therefore, can make or break the international expansion plans of e-commerce sellers. Even if you cannot offer free delivery, ensure that the shipping charges are not exorbitant. Factor in the costs beyond the base shipping rate. These include taxes, insurance, customs duties, and handling fees.
You may opt to bear these costs to entice customers, but they can hit your profit margins. Accounting for them beforehand will help you set realistic product prices that balance customer expectations and profits.
5. Build a Concrete Return Policy
According to Shopify, the international e-commerce business sector faced an average return rate of 17.6% in 2023. The number sounds painful for sellers incurring the costs of global shipping. However, returns are something the industry has to co-exist with. You can reduce them by improving packaging to curb damage, double-checking quality, and adding customer reviews for better insights.
A robust return policy is essential as it builds customer trust and keeps them on your side. Knowing that they can send the products back is a good reason for buyers to take a chance. The return policy should also include flexible refund options.
While creating a return policy, check the country-specific regulations for approvals and returns. For example, the EU mandates a 14-day cooling-off period when customers can return goods, while Australia has no cooling-off period. Setting up a return portal is also a part of the process.
Building a resilient shipping strategy with an international e-commerce business is not a walk in the park, but the effort is worthwhile. The opportunity can set up your business for success, expanding its market and creating a global brand.
Fortunately, you can expand your e-commerce operations internationally by following these actionable best practices. Besides giving you a head start in the global market, these steps foster resilience and long-term growth.
