Cross-border e-commerce best practice. How to prepare your platform and enter new markets? Monogo E-commerce News, #59
Why is it worth it?
In addition to the aforementioned scale of cross-border trade, other important advantages of cross-border include the increased sales potential. With an increased market, increased turnover can be expected. In addition, access to new markets provides an influx of fresh customers that may be lacking in the home market, especially in niche industries.
By having developed sales beyond national borders, you also reduce the impact of local perturbations on your business. So-called diversification is the basis for sustainable growth and securing your company's interests. Traditional expansion into other markets involves introducing an offer to existing stationary stores, or even building your own. Which entails considerable investment. In this case, e-commerce has the unquestionable advantage of testing the potential of the foreign market.
Challenges
Entering foreign markets based on guesswork can end badly. Therefore, it is advisable to conduct an analysis of the target country first. A good understanding of the demand in the target market, or markets, will allow you to make a better decision on which country to start with. When researching, we also suggest including the cultural aspect and differences between nations/countries.
What customers are used to and what their expectations are may be different from what you are used to in your local market. A lack of understanding of this aspect of online trading will lead to friction and, consequently, a failed investment. There are plenty of studies showing e-commerce shopping preferences in Europe and other continents. We recommend contacting practitioners or attending conferences that have speakers going through this process on their agenda. This is an ideal opportunity to get to know each other and ask questions while networking.
Translation
This is the first point that can be addressed efficiently with the right platform. After 13 years of implementing e-commerce systems, we see that the trio that works best is: e-commerce engine - CMS - PIM.
If you don't have all three systems implemented in your business, a solid engine to start with should also suffice. Adobe Commerce (Magento), has a superbly laid out information architecture, immediately adaptable to multilingualism. Even without specialist knowledge, a translation agency will be able to start working on pages, products and categories very quickly.
If, on the other hand, the amount of information to be translated is really large, we recommend using the TMS (Translation Management System). This is a service to which you send your data in the local language and after a while you receive the translated product data, CMS pages, etc. This is an additional cost for which you get the convenience and not just machine translation.
And since I mention machine translation there is, of course, the option of Google Translate or Deep-L translation. However, it's kind of an option as if it doesn't exist, because that's one we don't recommend very much. Minor lapses in machine translation are instantly picked up by customers. This usually ends in them losing confidence in the shop and going to a local competitor.
Payments and currency exchange
The payment system you have in your online shop probably already supports at least some foreign markets. Such PayU has coverage around Poland. However, it is not ideal as it only offers a certain proportion of popular payment methods.
That's why entering cross-border e-commerce, it is worth considering changing or introducing a new payment system. One that allows better and tighter integration of your favourite payment methods in your target markets. An interesting example is Adyen. A company that relies on payments in countries that are preferred by local customers. Fact, they have a higher commission, but it is always worth recalculating: whether less commission or more sales. Keep in mind that some customers purchase based on the available payment methods.
Here again, Adobe Commerce comes to the rescue. It is a mature e-commerce engine that has plug-ins (plug-ins) for all popular payment methods, not only in Europe, but also from the world. In a confident configuration, integration with the target payment system will come down to the installation and configuration of the plugin.
Another important topic is exchange rate differences. If your business is structured on very low margins, these can prove to be a killer. Pay attention to what currency you sell in and what currency you pay for goods or operations in. With high turnover, losses, or gains, on exchange rates can make a difference.
While we are on the subject of finance, attention should also be paid to customs duties. Selling abroad means there are a number of rules and laws to follow. Being well acquainted with the rules for importing/exporting goods and services will help you avoid surprises.
A reliable transport company
Once your products have been purchased, they need to be delivered to the end customer somehow. Choosing, maybe not the cheapest, but a reliable transport company will reduce the number of returns that will certainly affect your bottom line.
Delivery time also matters. There are countries and customers who accept a certain waiting time for delivery. There are countries where customers are not used to parcel machines, which are so popular in Poland. It is worth bearing this in mind what delivery methods and rules you offer.
Cross-border is a great business adventure. The huge potential for overseas sales, used well, will certainly help your business. We wish you a lot of success in this field and invite you to talk to us about cross-border sales!