14
Dec

4 Myths About Expanding Globally

From World First:

One of the biggest misconceptions is that it’s too hard to sell internationally. Even though 75% of all global e-commerce sales happen outside of US borders, a 2016 PayPal e-commerce survey finds that only one in three US merchants plan to start selling in a foreign market over the next twelve months.

But the opportunities from selling abroad far outweigh any of the complexities or costs. In fact, a late 2014 Payvision survey found that almost 80% of global merchants agreed that selling their products or services overseas is profitable. To prove it, let’s look at some of the most common reasons why online sellers don’t go global, and how they can overcome them to keep their sales growing strong.

  • Marketplaces charge too much to open in each country.

A marketplace’s setup fees are nominal when you see what you’re missing out on by not selling globally. Consider this: out of the world’s 10 largest e-commerce markets in 2015, around 75% of all e-commerce sales were made in non-US countries according to a report by Remarkety.

And there’s plenty of room for growth, too. In fact, e-commerce giant Alibaba Group is expecting cross-border e-commerce sales to quadruple in size to $1 trillion by 2020 and account for almost 30% of all global B2C transactions.

  • International shipping costs may scare off shoppers.

PayPal’s survey also found that among those that were already shopping overseas, 48% planned to increase their cross-border spending over the next year, suggesting that shipping costs may not be a problem for many shoppers.

Shoppers around the world are especially receptive to US-based online sellers. PayPal’s 2015 Annual Global Report found that 50% of shoppers purchased from a foreign country. And half of those shoppers bought from US-based websites over the prior 12 months – making the US the top cross-border market in the world.

  • Foreign taxes on my product shipments are complicated.

Foreign taxes such as value-added taxes (VAT) are often no more complicated than a state sales tax, especially if you know what to expect. And you typically only need to pay them if your sales reach a certain threshold.

Think you might do well enough selling in a foreign country to qualify for VAT? Check out our four-step VAT guide to see where you might owe. We also share a tip on how to avoid double-conversion charges when it’s time to pay the tax bill.

  • Foreign exchange pricing is way too hard.

PayPal also found that 25% of shoppers abandoned their online carts because they were not willing to buy products listed in a foreign currency, so it’s crucial to list your items in a shoppers’ home currency.

Start by finding your competitors’ prices in foreign markets so you know the going market rate of what you’re selling. Then use a currency conversion calculator to see how it translates into US dollars. From there you can make the decision to undercut the competition or keep your prices at market rates to keep your profit margins up.

Don’t miss out

Simply put, if you’re not selling outside the US, you could be missing out on 75% of the global e-commerce market. And with user-friendly global marketplaces like Amazon, Rakuten, and Yahoo Shopping making it easy to sell in foreign markets, there are more opportunities than ever to start growing your sales and profit margins.

world first