In the past couple of years, many esellers have been taking on the challenge of expanding their business into the EU. With a prediction of almost €660 billion in total online revenue in 2018, it’s easy to see why. Countries such as the UK, Germany and France, make up almost 60% of the EU’s revenue, making them easy bets for bringing in more profits - but any expansion into ‘unknown territory’ can come with risks.
No matter where you decide to expand, being informed and prepared will make the difference between a successful business venture, or a huge business risk.
In this post, we point out common concerns for expanding your business to the EU, and advise you on how to account for them efficiently.
When transferring any product over to a foreign market, the key to success is something we call localization. While many might see expanding as a process of going ‘global’, the world’s most successful businesses know that going ‘global’ is not enough; you actually need to go ‘local’ as well.
Language - When you expand your business to foreign countries, you’ll need a local copywriter. Anyone can use Google Translate, but only a true local will be able to take your web copy and prepare it for its new market by staying on top of accepted and current lingo that locals use and trust.
Consumer Trust - Your new customers will trust you more when they see that you offer familiar companies, such as shipping companies and options, as well as payment methods that they are accustomed to using.
Trends - Staying on top of the local trends is another important factor of localization. Knowing what’s selling each shopping season will be the key to a successful product, and will require some research on your part.
International payments can be a big adjustment for new overseas businesses, and may quietly eat away at earnings if you’re not attentive. When transferring payments internationally, whether receiving incoming payments from marketplaces or sending ongoing payments to suppliers, the best route is to use a third party payment platform. Companies such as Payoneerhelp by cutting down on expenses spent on payment transfers, as well as currency exchanges between countries.
Payoneeralso offers a service aimed specifically toward VAT (Value Added Tax) fulfillment. When selling products to the EU, you’ll find that tax requirements for sellers, such as VAT, become an important factor in your business preparations and responsibilities. Payoneer’s VAT service helps by transferring VAT payments straight to the relevant tax authorities, saving you money in the long run through deduced transfer and conversion fees.
While VAT laws and foreign languages may take up a lot of your preparation time, we don’t want to forget about the nitty gritty details that go into building any successful business. Shipping and fulfilment is an important, and sometimes underestimated factor of any new ebusiness.
One top secret to a successful ebusiness is figuring out how to ship profitably. Because shipping costs can be a significant expense for esellers, you can end up losing a lot of hard-earned money if you don’t take the time to do the necessary research.
Using a detailed chart to track all your costs (not just shipping alone, but any and all costs associated with getting your products to the customer) can be an enlightening way to catch all the little charges that eat away at profit. Many esellers are shocked when they see how all the little charges add up into significant expenses. Doing this before you settle on your final strategy and prices can save you from falling in this common trap.
Other important things to keep in mind when distributing and shipping products are your shipping packages’ size and weight, package tracking, and shipping insurance. Keeping packages as small and lightweight as possible will save both you and your customer money, while taking into consideration efficient tracking and trusted insurance will save you much hassle in the long run.
Expanding your business into a foreign market is an exciting endeavor; one that comes with a lot of research and preparation. So, before jumping in, be sure to have your facts straight, and prepare efficiently for your new business venture.
To sum it up, be prepared to take into account:
Localization; language, consumer trust, and changing trends
International payments and VAT payments
Logistics; shipping and fulfillment
And don't forget, ChannelGrabber's multi-channel ecommerce software helps you to automate the management of listings, stock, orders, billing, shipping and messaging no matter where you choose to expand your business.