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5 Steps to Cross-border Success

Brands have seen explosive growth of cross-border e-commerce in the past few years, and even more potential lies ahead. It is estimated that by 2022, cross-border e-commerce sales will reach $627 billion — up from $284 billion in 2017 — and account for 20% of total e-commerce sales.

You should know the obstacles and opportunities for expanding into new markets. The ability to assess the situation and build a strategy for your brand can make all the difference in your global success.

1. Use web traffic data to understand demand

Organizations often look to market growth rates to determine their number one priority. While that’s not bad, it’s better to start where you already have demand, as that will turbocharge your success. For example, if you are a European-based business, but are seeing a high volume of traffic on your website from Japan, you may want to consider this as an initial market opportunity.

2. Determine which countries will allow your product to be sold

To sell products across country borders, you must understand import requirements and how they apply to your products. This includes the country of origin for the final product and the materials from which it was constructed.

Major carriers like FedExUPS and DHL are great resources that can help you understand country-specific guidelines and guide your international shipping strategy.

3. Provide customers with clear information on duties and taxes

Generally, when selling across borders, you or your merchant are the exporter and your customer is the importer. This means your customer is responsible for duties and taxes required for import. If these are not calculated correctly at the time of the transaction, the carrier will be required to collect from the consumer upon delivery. That can result in refusals and customer dissatisfaction.

It’s important to provide a clear calculation of final duties and taxes required for import using a landed cost tool. You should clearly present this information and allow consumers to pay these fees upfront during the checkout process. This will improve conversion rates and the overall customer experience.

4. Determine the right fulfillment strategy for your business

Shipping across borders is one of the biggest challenges of global e-commerce. It requires deep knowledge of trade compliance, cross-border customs clearance and commerce trade rules, import and export rules, fluctuating shipping rates, and more.

There are a few common fulfillment methods to consider:

  • Direct Fulfillment requires you to be in charge of shipping your goods out to your customers yourself. This gets trickier as you grow and begin to sell globally.
  • Third-party Fulfillment utilizes outsourced warehouses to help you ship both domestically and cross-border.
  • Drop-ship Fulfillment does not require your business to keep products in stock. Instead, a store sells your products, then passes orders to a third-party supplier, who then ships the order to the customer.

Regardless of fulfilment method, it’s crucial to understand all regulations and compliance nuances specific to your products and the new regions you plan to sell into. But, it’s also crucial to provide efficient order fulfillment to get your customers their products on time and provide a positive experience. And it really matters—70% of shoppers are unlikely to make another purchase from a brand following a poor delivery experience.

5. Localize the customer experience to improve overall conversion

Localization can mean a lot of things to different people, but it most certainly means that your products and the purchase experience will represent the local language. And not just translated — it’s imperative to use culturally appropriate words and images.

Localization also means you should understand the desired shopping and checkout experience. That includes displaying local currency and offering preferred payment methods during checkout. While credit cards may be the dominant global payment method, providing local preferred payment options can significantly improve conversion. In the European Union, direct debit is preferred by more than 16% of the population, while digital wallets are preferred by almost 60% of the Asia-Pacific population, and installment payments, such as Klarna, are becoming popular in the U.S. Seventy-six percent of international shoppers say they prefer to purchase in their own currency. Providing local payment options decreases cart abandonment — that’s a big reason to prioritize this for your brand’s e-commerce experience.

There’s no telling where e-commerce will go next. But with the right preparedness and forward thinking (armed with these five steps) you can grab a piece of the “explosive growth” and realize your cross-border goals.

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