The online space has introduced countless new opportunities for retailers to reach both domestic and foreign audiences.
Many are now fully embracing the potential to target foreign markets by offering international shipping or developing a country-specific website.
While this opportunity should not be overlooked, setting up international ecommerce capabilities is no small feat.
In this post, we’d like to review the basic solutions, questions to consider, and the pros and cons of taking the global leap.
Options for fulfilling internationally:
• Third party integration: Our clients Kidrobot and Michael C. Fina have partnered with the companies Fiftyone and International Checkout to offer a seamless checkout process that includes the option to ship internationally. Taking advantage of the expertise and existing systems in place of these solutions can save a lot of headaches in the long run.
• Single website & distribution center offering international fulfillment: If your existing resources are able to accommodate international shipping without the aid of a third party, this is an option.
• Different multi-language, multi-country websites: For example, Diptyque manages three separate websites for the US, UK, and France. Product prices, site languages, tax, and shipping fees are all customized based on shipping country.
If you’re still not sold on the idea of offering international ecommerce options…
• Internet adoption in Europe is only at 50%, and in Asia at 17%. The average Internet penetration rate globally is only at 26.6% (IWS). As global Internet use increases, so does the opportunity to reach a larger audience.
• Traditional word of mouth marketing isn’t obsolete. Giving foreign users the chance to purchase will expand brand awareness and foster international influencers.
• Use an ecommerce initiative to test out new markets. A positive response in a new country may allow you to Identify foreign markets that have potential for additional (ex, brick and mortar) business development.
• Be first to market. If you’re thinking about expanding internationally, chances are so are your competitors.
But before you take the plunge be sure to evaluate…
• Does a customer base exist? Implementing international ecommerce is a serious investment that may not be profitable for all business models.
• International trade and taxation liabilities can be very complex. Make sure you fully understand these aspects before entering into a new market.
• Translating currencies and making all customs, fees, and taxes transparent to consumers is not easy and may be an additional liability.
• Shipping rates tend to be much higher for international fulfillment. Are your customers willing to pay higher rates, or are you able to subsidize or offer free shipping while still staying profitable?
• International shipping carriers are not always reliable. Choose carefully and do your research.
• Whether customers are domestic or international, the return policy is always a key decision factor when placing an order online. Will international customers be able to easily return products?
If you would like to create a new site targeting a specific country:
Your first question may be as simple as, how should we host and handle the domain structure of the international version of our website?
Below are three primary methods:
• Use a country-specific sub-domain. For example, http://us.havaianas.com/
• Use a folder within an established domain. For example, http://www.example.com/fr/
There is no universal “right solution” in this case. Each option has different factors to consider relating to cost, search engine optimization (SEO), brand reach, among others.
The key benefit of using a ccTLD is better geo targeting. Additionally, depending on the targeted country, international users may be more likely to click through to a site including their country’s specific domain extension. On the other hand, setting up a new ccTLD loses domain authority and all the credibility of the back links associated to the established domain.
Sub-domains are also criticized for losing domain authority; however it is questionable how much. Both ccTLD’s and sub-domains require additional costs in DNS setup and more organizational maintenance.
Creating folders entails less maintenance and cost and maintains existing domain authority, but it is more difficult to be optimized when geo targeting.
Tools For Success in International Shipping:
• Consider lowering shipping costs to encourage conversion and gain loyal international customers.
• Transparency: make it very clear to consumers what they can expect for shipping costs, taxes, tariffs, and other fees.
• Take advantage of specialists: third-party providers of international shipping management can take care of many of the complexities involved in fulfilling globally.
Look out for our next client spotlight post, where we’ll go into more detail on the specific international shipping and ecommerce implementations we carried out for our clients Kidrobot, Michael C. Fina, Diptyque, and Chrome.