3 Things to to know about cross border ecommerce
Building a business across borders
In modern business, you’re no longer confined by your geographical location to sell your goods or services. The internet is now a place to start a worldwide business, no matter if you live in a big city or small town. One concern with selling across the globe is global payments, but new technologies are helping to alleviate the stress of accepting payments, therefore helping businesses everywhere thrive in ecommerce. If you’re thinking about starting a global cross-border ecommerce business, this article will give you what you need to know to get started. First, let’s define cross-border ecommerce.
What is cross-border ecommerce?
While it may be apparent, cross-border commerce is selling goods or services across borders to people in different countries. But with the internet boom, cross-border ecommerce utilizes online selling of goods and services to reach a global audience. As social media and technology play a more central role in the way online shoppers buy goods and services, global ecommerce will only continue to grow. For online retailers, there’s a big growth opportunity in cross-border purchases, especially as international ecommerce payment acceptance has become easier for merchants.
The next wave of commerce is taking place internationally, and besides reaching a global audience, cross-border ecommerce can also benefit brick and mortar stores. While a small business may only have one physical storefront, cross-border ecommerce lets that business have a virtual storefront all over the world. Plus, for companies looking to expand into new, international markets, cross-border ecommerce helps them test the target market in that country with an online shopping experience before investing in building physical storefronts. If the online demand is high enough, retailers will know that a physical storefront is viable.
To sum up cross-border ecommerce, it’s a sales method that allows businesses to expand their reach to new markets, test those markets to see about demand for their products, and introduce a whole new audience to their products. New technologies are helping businesses enter into the world of ecommerce. These technologies help optimize all of the issues businesses once faced, including credit card acceptance, delivery times, and logistics. Now that you know more about cross-border ecommerce, let’s look at three things you should know.
Three things you should know about cross-border ecommerce
When it comes to cross-border ecommerce, there are some things you should consider in order to set yourself up for success. Let’s take a look at three of the most important points:
Offer more than one way to pay
Customers like payment flexibility. While credit cards are the number one way that ecommerce shoppers pay, you’ll want to make sure to consider all of the other payment options as well. In addition to credit card payments, mobile wallet payments are also increasingly popular. No matter what payment method you support, you’ll need to take an extra step to ensure that you have all of the kinks ironed out. This can include making sure you can accept multiple payment currencies as customers like to pay in the currency they’re most familiar with. To do this, you’ll need to work with your payment processor to ensure that your payment gateway is set up for currency conversion to USD. Other popular payment types that are picking up steam in cross-border payments are payment functions like one-step checkout and QR code payments. This can help make it even easier for consumers to pay for their purchases no matter where they are. You’ll want to make sure that your ecommerce platform has the capability to integrate these payment methods.
Payment security is also a concern for many buyers and sellers. Therefore, it’s critical that your ecommerce business protects itself from fraud. To do this, ensure you work with your payment processor to have the greatest level of card security possible within the countries you operate. This could include utilizing tokenization, address verification systems (AVS), and even a second layer of data encryption like CVV codes or 3D secure authentication.
Struggling economies embrace ecommerce
In global markets where economies have struggled, ecommerce websites provide an opportunity for savvy shoppers in those markets. In fact, there are markets where ecommerce has grown by 40-50%, even though the normal market has been down. It’s easy to understand why: consumers in these slumping economies are looking for bargains, and the ability to compete on price is a big reason that ecommerce retailers see so much success in struggling markets. By streamlining their offerings and not having to worry about physical retail spaces, these vendors can beat the market pricing in those specific countries. That’s good for customers and for ecommerce retailers alike.
Be aware of international rules and barriers
When it comes to selling goods outside of your home country, you’ll need to be familiar with the laws and regulations in those countries. These barriers to entry can inform your strategies in these countries and, with a little preparation, set you up for success in whichever ecommerce market you choose to operate.
Here are some of the biggest obstacles you’ll need to overcome in cross-border markets:
- Language barriers – Depending on the market, there’s a chance your customers may not speak the same language. Therefore, it can be helpful to translate your website into their native language, helping to provide a better and more customized customer experience with your brand, thereby leading to higher customer satisfaction rates.
- Cultural interpretation – In contrast to domestic ecommerce sales, there can be a wide discrepancy between cultures in cross-border transactions. Therefore, you’ll need to establish how the target audience’s particular culture will affect the product’s success. Knowing these nuances can help you determine what products may do better than others in a given market.
- Payment preferences – As we’ve mentioned, it’s helpful to display pricing on your online store in the local currency, as customers are more familiar with their own currency. When you do this, you’ll again need to ensure that you can accept foreign currencies by talking with your payment processor. You’ll also need to understand the exchange rate in these currencies so that you price your products accordingly.
- Taxes and duties – Again, depending on the country, there could be mandatory tax and duty charges for customers who make online purchases. Therefore, it’s important to communicate these costs with your customers. You can ruin an otherwise great customer experience by tacking on hidden fees and charges during online sales. So it’s best to disclose all of these charges up front before a customer gets too far down the purchase funnel.
- Customer support – You’ll want to be sure to adapt your customer support for each region you’re selling to. This could mean translating manuals and instructions into a variety of languages or having dedicated support staff in those regions. Keep an eye on what your customers are searching for on your site, as this can help you ensure you’re providing the best information to them no matter where they are.
In addition to these obstacles, there’s also certain pieces of legislation in certain countries that you’ll need to follow. In Europe, for example, you’ll need to meet the following legislation:
- Pre-contractual details – This concerns details of how visitor site data will be used and stored. Your website must tell visitors how electronic documents containing information on the provider, client, products, and/or services will be stored.
- Post-contractual details – You’ll also need to notify new customers of any purchases they make within 24 hours.
- Withdrawal period – Your customers have the right to change their mind and withdraw from the contract to purchase. This is a law, and if your website doesn’t clearly state this, the withdrawal period extends to 12 months.
- Cookies – You’ll need to tell your customers about your internet cookies policy, including all points where cookies are being utilized upon their visit to, or purchase from, the site.
- Information – If your ecommerce site gathers information from customers, you’ll need to inform them. This information can include registration, contact forms, etc. In addition, you’ll have to let them know where the data is registered and what tools they can use to access this information in the future, make modifications, or even cancellations.
As you can see, there’s a lot of preparation you’ll need to tackle before getting your cross-border ecommerce business set up. There are a lot of benefits to ecommerce on a global level, and hopefully this article has shown you some of the benefits of getting into cross-border ecommerce. From more sales to building a broader customer base, cross-border ecommerce can have a big impact on your business. You’ll just need to ensure that you work with the right partner who can help you navigate all of the considerations to thrive in new markets.
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