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International eCommerce and You

E-commerce shipping and payment solutions UK

The eCommerce market in the UK is immense in size, netting over £44bn in online sales in 2014 (according to the Centre for Retail Research), but it’s merely a fraction of the global online retail market.

Nearby Eurozone countries such as Germany, France, Spain, Italy and the Netherlands have netted £79.9bn in 2014, and expected to grow at much higher pace than the saturated UK market. The USA eCommerce market by itself is larger than all of Europe combined (including the UK) with a staggering £189bn in online sales in 2014, and its sister-market, Canada, is twice as large as the Spanish market. Let’s not forget about the Asian markets which are absolutely booming right now, most especially China, where shopping is the fastest-growing online activity, leading to over £300bn in online sales last year.
UK-based online sellers should not ignore current trends, and instead, should seek out ways to take a piece of the global pie. It could be quite intimidating to operate abroad, especially for sole traders and SME’s which are often times fully preoccupied with their current affairs, but selling globally is nothing short of a necessity. The whole idea of selling online is scalability, and narrowing the scope to local regions means capped potential, increased risk, and increased competitiveness.
International E-Tailing isn’t a cinch. There are multiple inherited complexities that go along with the great potential. What online retailers should keep in mind is that this an effort pays itself at the end of the long, winding, road. These are the aspects we feel are pivotal when devising an international sale plan:

1. Shipping:

Shipping is often the soft spot of many international e-tailers. Complexity, alongside overwhelming (and sometimes unexpected) costs can cut profitability to a level where selling internationally isn’t worthwhile anymore.
Recommend course of action – using an eCommerce shipping solution to access pooled volume discounted rates from a range of parcel delivery carriers.

2. Pricing:

The rule of thumb dictates that pricing in foreign currency never works. That means the seller should decide on a new price in local currency. That doesn’t necessarily mean translating the GBP price into Dollars or Euros, but instead, doing local competitive research to understand how each product is priced locally.
Recommended course of action: Conduct thorough research and consider local competition and your profit margins before deciding on prices. Start off slowly with a subset of products to see if the market reacts as you have planned, before going full throttle.

3. Taxation:

As HMRC targets online sellers in suspicion of tax evasion, eTailers can’t be too careful. Taxation is a big part of online selling, and it’s tricky.
Recommend course of action: As international taxation laws vary between countries, and could be difficult to comprehend, it’s always good to use professionals in this field. It’s best to get a clear understanding of the costs and overheads relating to taxation before diving into the international market.

4. Receiving foreign currency payments:

Although Amazon sellers can automatically have their foreign payments paid in Pounds into their local UK bank accounts, this currency exchange has a tremendous cost. Amazon charges about 4% of the total amount sold in foreign currencies as a commission.
With other markets, where automated currency exchanged isn’t offered, it could be even more difficult, and without having a domestic currency bank account abroad (where the marketplace is operating) – sellers will not be accepted.
Recommended course of action: some UK foreign exchange companies allow online merchants to open bank accounts abroad in multiple locations. The exchange rates they’ll use will have much lower mark-ups than Amazon’s (1-2 per cent), and they would provide free consultancy and introductions to new marketplaces as a part of their service.
To summarise, selling internationally is highly recommended to E-tailers of all sizes. It might take some time and effort to move from selling locally to globally, but it will be worth it when international sales start accumulating.

Simon Wright

As SEO and Content Marketing Manager at the Whistl Group, Simon has over 10 years' experience in both B2B and B2C marketing, and as a result, offers a unique perspective on the pre- and post-checkout delivery experiences. Simon writes regularly for both the Parcelhub and Whistl blogs and is passionate about helping retailers make delivery their competitive advantage.

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