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How can you scale cross-border?

Cross-border ecommerce is when consumers purchase products online, from brands and retailers outside their home country. 3 out of 4 consumers buy something cross-border each year, and its popularity is rising.

The benefits of cross-border ecommerce
The challenges of cross-border ecommerce
Tips to succeed
Software for cross-border ecommerce

The benefits of cross-border ecommerce


Cross-border selling offers huge benefits for sellers. The most obvious is a much bigger market reach – and this means massive sales growth potential. For example, let’s imagine your brand currently targets consumers in the US; this means you can reach a maximum of 289 million potential buyers in 2027.


By expanding sales to Latin America, you can add another 388 million customers; add China to the mix, and you could reach another 1330 million (1.3 billion) new customers. The benefits of cross-border selling include:

Market expansion: As illustrated above, each additional region can massively increase sales potential. A US brand expanding to China and Latin America can increase its customer base by 594%.
Potential for less competition: Especially for unique brands and products. A great example is Apple, which expanded into Japan in 2003 after saturating the US market. Despite the established position of domestic electronics brands in Japan, their unique offering enabled the brand to gain traction internationally.
Leverage differences in buying power: You can get better margins in high-GDP countries, or where the wealth gap is large. Looking at a nations’ GDP growth is an important consideration when assessing international expansion.
Outsmart seasonality: Sell seasonal goods (e.g., fashion) in both hemispheres and get better sell-through, in combination with higher margins. International selling is a recommended way to clear seasonal stock at good prices. Australian retailer MySale has built its business on this premise.
Build your brand: Use your chic appeal in overseas markets to build brand identity and loyalty. The popularity of your brand in other countries may surprise you – 65% of Chinese consumers and 49% of Australian consumers have an overwhelmingly positive view of US brands, for example.
Cut out the middleman: Sell directly to the consumer (DTC), without relying on distributors for your brand reputation. By becoming the distributor for your own brand globally, you gain full control over your branding, content, and customer experience.
Control over methods: Freedom to use more sustainable methods distributors don’t offer. This might include sustainable delivery methods, or environmental certifications, which are increasingly demanded by consumers.
All the advantages of DTC. These include better margins and direct contact with consumers.

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Challenges of cross-border ecommerce


Selling goods internationally involves some challenges to ensure everything runs smoothly. You need tools that can help manage the challenges of international sales, including the logistics and fulfillment side. This is why marketplace integration software is essential, enabling you to link all your backend systems to one centralized dashboard.

 

Typical difficulties associated with international ecommerce include:

Understanding the market
This has legal and cultural dimensions to it. For example, in The Netherlands, duvet covers are open at one end. Try and sell these in other countries and they’ll think it’s faulty, resulting in avoidable returns.
Assortment and content
Align with cultural norms to ensure that your content isn’t offensive, too formal, or too casual.
Legal regulations
Some products are restricted or prohibited, while others must meet standards for quality and safety. You must be authorized to sell as a registered trader, and/or be a registered importer, and have authority from brands and trademark holders.
Sales taxes and customs
The taxes you need to pay depend on your setup. You might escape sales tax, but need to pay customs, or vice versa, or both.
Exchange rates
These can make a big difference to margins, and leveraging exchange rates at the right time can generate extra margins.
Branding and identity
Does your brand identity work with the target market? Do your values make it hard to justify selling in countries with regimes opposed to human rights or sustainability?
Distribution agreements
You may be prevented from selling some goods due to exclusivity agreements.
Payment methods
Secure payment that prevents fraud is essential. Many countries still use cash as a preferred method, but online payments are now almost ubiquitous.
Last-mile delivery
This is critical. Some marketplaces require certain last-mile providers, and in some regions the coverage is poor.

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How is cross-border ecommerce different from regional expansion?

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4 tips to succeed with cross-border ecommerce
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1. Partner up

Strategic partners help you do more by leveraging their capabilities and connections. They can handle the toughest parts of cross-border ecommerce as you get started. Once you're up and running, you can take on more yourself. But often, sticking with partners long-term is beneficial—they can get better deals on shipping and warehouse space and help with licensing and customs, especially in places like the GCC.

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2. Get advice on strategy

Stepping into a new region isn’t something you should do alone, or without advice.

Strategic advice at an early stage can help you understand the true potential of each market and what’s needed to make cross-border selling successful from the very start. This way, you can avoid expensive mistakes and strategic errors.

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3. Start small, perfect it, and expand
It’s generally better to launch with a well-coordinated and small-scale assortment, with stock replenishments made little and often. The cost might be greater to begin with, but this approach can pay off by making your enterprise more responsive to customer demands in each region.
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4. Use FBA/MCF
Amazon recently launched its multi-channel fulfillment service (MCF), which uses fulfillment by Amazon (FBA) to serve customers from other sales channels. This can be a great way to reach customers in regions outside your current area, but which are already covered by FBA.
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What’s the best software platform for cross-border ecommerce?

As we’ve seen, selling cross-border requires distinct capabilities and tools. There are several software packages and platforms that are designed to meet (at least) some of these challenges.
Cross-border payment solutions
Logistics platforms for international ecommerce
Marketplace integration software
The power of Partners

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  • Guidance for marketplace selection, integration, cross-border opportunities, and efficient order fulfillment.
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