There are many ways U.S.-based small businesses can gain by diversifying into overseas markets. Beyond the obvious benefits (a larger sales base, millions of new prospects), here are some broad economic and seasonal reasons that globalization makes good business sense:
- In 2008, when the U.S. housing market stumbled, American companies selling overseas were able to mitigate the effects of America’s economic downturn. Not only were cross-border customers still buying and spending, their currencies remained strong against the U.S. dollar. Plus, “foreign exposure allows U.S.-based companies to capitalize on rapid growth in emerging markets like China, India, and Latin America, and earn much stronger profits than if they were totally dependent on the struggling U.S. economy,” says US News & World Report.
- Holidays differ from country to country and can represent some of the most lucrative opportunities for e-sellers. China, for example, is now the largest e-commerce market, having surpassed the US in 2013. The Chinese New Year is the biggest holiday in China, happening in January or February according to the turn of the Chinese calendar. China’s Single’s Day (November 11, a day of indulgence targeting single people) sets the standard for holiday sales. Online sales in 2016 reached $17.8 billion within 24 hours—a new record. In Mexico, El Buen Fin (“the good weekend”) occurs across four days in November. In 2014, retailers in Mexico City accrued approximately €11.3 billion. Originally inspired by Black Friday, El Buen Fin was conceived to increase consumption in Mexico, thereby boosting its economy, as well as offering some assistance to the overall welfare of the country’s families.
- In Japan, workers typically receive their annual bonuses in June or July. With payouts often being quite large, bonus season has led to an annual national shopping spree, with people rushing to buy the products they’ve coveted all year. Think Christmas in July.
You are already leveraging the benefits of Amazon.com, the ninth most visited website in the world. But consider this: Amazon operates 10 more websites in countries around the world. If the benefits of going global seem compelling, extending your Fulfilled by Amazon (FBA) presence to international marketplaces could be a natural next step. It would enable you to go to market quickly and with minimal incremental startup cost. And hurdles such as international shipping, customs, taxes and localization of listings can be easily addressed with the Amazon platform and its ecosystem of partner resources. Amazon adds an element of stability and security to what might otherwise seem like a crazy leap of faith.
Businesses of all sizes are diversifying via international markets in record numbers. According to the Boston Consulting Group, cross border transactions will nearly triple in volume from 2010 to 2020. That means that, soon, nearly all businesses will be reaping the benefits of playing in a global marketplace. Will your business be one of them?