When an eCommerce retailer decides to go international, it can be a complicated process. There can be legal, logistical, and distribution challenges that arise, and your business may be caught off guard by the complexity of the situation. Let’s take a look at some of the challenges that may arise when you decide to take your business international.
1) Currency exchange problems
When an American business decides to begin operating in another country, they must consider the intricacies of the exchange rates. The stability in the value of the currency heavily varies by country.
For example, when a sale is made on Monday at an exchange gain, the following Monday, you may be making sales at an exchange loss. The tumultuous nature of currency exchange is something your business should consider before deciding to do business in a foreign country.
Additionally, when your business officially begins operating in a different country, your eCommerce site would greatly benefit from the optimization to display the product’s price in the currency the customers are used to dealing with.
Forcing the customers to do the exchange rates themselves leads to confusion, especially since the exchange rates are constantly in flux. Displaying how the transaction will be recorded, eliminates the confusion, and allows your business to be up-front with their consumers.
2) Getting Lost in Translation
If your business chooses to open themselves up to the international marketplace, then you are likely going to want to optimize your site to have the ability to be translated into other languages.
Having the ability to make sales to other countries means nothing if those customers cannot understand anything on your website. Providing language options also helps to increase a customer’s feeling of comfort with the transaction since the customer can read and understand every part of what they are paying for.
Additionally, you may need to look into other ways you communicate with your customers, including translating product instructions, and modifying the language in customer communication materials.
By offering your customers the ability to shop in a language they are most comfortable in, you can position your business to be a trusted eCommerce site.
3) Legal Problems
International law can be messy for businesses to have to deal with. Entrepreneur.com reports “Consumer rights laws governing returns, complaints and refunds differ from country to country. Similarly, countries differ in their privacy and data protection laws for account, address and payment information that merchants can retain.”
Additionally, international payments come with a much higher risk for fraud. When your business has a harder time detecting fraud in a new market, they may be susceptible to losses, and accounts that are uncollectible.
Last, many countries are restrictive with what kinds of materials they permit to be entered into the country and how much of it can be sold. Overall it can be a tricky road to navigate.
When deciding to go international, you need to be aware of the fact that every foreign country may present legal liabilities to your business’s operations.
4) How to accommodate the increased business volume
By going international, your business will be opened up to a greater amount of customers than you had previously been used to. Depending on the success of your business, there will ideally be an increase in orders, revenues, and the overall movement of inventory.
You do not want your domestic or international customers to experience sold-out inventory, or frustrating delays in their orders simply because your operations are overwhelmed.
In order to capitalize on the increase in these components of your business, you should ensure that your business has the capacity to handle the intricacies of inventory management, shipping logistics, and customer management.
5) Cater your marketing materials to a new audience
The marketing strategy you have used for your U.S. customers may not be adequate for an international market. Accordingly, you will need to perform market research to ensure that you are effectively communicating with your international customers.
Your eCommerce business may also find that the marketing channels need to change to adjust to what is popular in a foreign country.
For example, while Facebook is the dominant social network in the U.S., a site called “RenRen” is the leader in China.
Therefore, your business will have to look into how to handle the social media aspect of their marketing as it relates to a foreign market.
6) Shipping Problems
The cost of shipping internationally is much more expensive than just shipping domestically. Additionally, customs can present a logistical problem for companies. When your business decides to go international, you must ensure that they are equipped to navigate through this challenge.
To begin, the cost to ship is ordinarily passed on to the customer. The international customers you serve, however, will likely be displeased with exorbitant shipping costs. Since these costs cannot be eliminated, a more desirable way to reflect these costs would be to include them in the cost of the product. By doing this, you can display the shipping cost as being more reasonable, and the customer is not surprised by their total cost to purchase right as they are about to pay.
Additionally, businesses may look to locate a distribution center in a foreign country in an effort to minimize the border-crossing issues.
Your business needs to be aware of the logistical considerations in moving goods across borders.
In deciding to go international, businesses are faced with many challenges. There are complexities concerning laws, logistics, and communication that a business must overcome in order to be successful. By making sure that your business is aware of the challenges of international business, you can be sure that you will be in a better position for success.