Global retail sales hit $2.8 trillion in 2018... and there are no signs that growth will slow anytime soon.
In fact, that number is projected to nearly double by 2021 with estimates reaching $4.8 trillion. This is a pretty clear call to action for any online sellers considering cross border sales.
However, as you'd expect, there are plenty of obstacles unique to running an international business. Global localization, global shipping, returns, and more.
To get a better idea of cross-border sales, we sat down with Gil Elias, CEO of American Outlets – an ecommerce marketplace that helps US sellers and top brands tap into global markets. Let’s dive right in!
How long have you been involved in global ecommerce?
I’ve been involved in international ecommerce for 5 years now.
What made you get involved in international ecommerce? When did you notice there was potential there?
When I was in Israel, I understood the difficulties of importing products from the international market. The idea to be an exporter and sell products to global markets... it makes it much easier for an importer trying to bring products into their country.
Because of importing restrictions, it’s easier for exporters to reach new markets, than it is for importers in their markets. With less restrictions for exporters, there’s no need for an expert customs broker. We want to make it as easy as simply shipping products.
What are the biggest challenges you’ve seen sellers face in cross-border sales?
Sellers need to understand the market they ship to first. They need to understand the restrictions, customs procedures, shipping logistics, and most importantly, the people.
I think many sellers don’t have expertise on that – especially when it comes to correctly declaring customs codes. Just starting an international business can be costly because of shipping alone.
Many sellers might not even know they can optimize their shipping procedures for better results and to save money. There are a lot of questions on how to begin piecing together this big cross-border selling puzzle.
How important is localizing content, forms of payment, and marketing, to have success in cross border sales?
We continue to see a huge impact on sales when we sell products in the currency of the local market we are trying to achieve success in. We have seen lack of confidence to purchase products in a non-localized currency.
Global consumers generally want to feel like they are buying locally. Even if they know they're buying from an international source, buying in their own currency further eliminates any objections to make a purchase. There is less confusion – and if a person thinks less, they tend to buy more.
What obstacles do sellers face when it comes to global shipping?
As I mentioned before, importing can get complicated. When an exporter wants to ship products to a global customer, there are far less restrictions.
However, exporters need to understand how much per item can be shipped, how much the maximum amount per item that is not being taxed is, understand categorical restrictions, and more.
Essentially, the sellers need to be experts in two fields, the export country and the global import market.
If you ship products one-by-one, it can be a hassle. Think of all the steps to ship one box, for example. Shipping larger volumes can be difficult, but it doesn't have to be. With the right infrastructure, it can be faster and more profitable.
Does global shipping vary by country?
Every country has their own laws and taxes – but international shipping uses the same formula, only different values.
For example, if you ship to England, the tax will be different than other countries, but the logic will be the same. You just need to ask international-specific shipping questions. Sellers need to understand what they are doing before selling cross-border, especially when it comes to global shipping.
How important is getting product listing price right?
You need to have the ability to search within global markets to see if your pricing fits. It doesn’t matter if you’re trying to understand exporting and importing, if your price metrics don’t fit the market. See if the UPCs fit the market you want to sell in and compare.
Understand if it makes sense after all the shipping costs and other expenses are factored in to be competitive.
What technology should sellers consider when setting up a global marketplace?
Sellers need to close agreements with UPS or USPS on how much it will cost to ship to a specific country. Try to negotiate terms and think about ways to put the price of shipping into the product and bundle it all together. Then you need to understand if taxes need to be collected in advance.
If you’re selling a product, you can aim to include those taxes when selling. You can account for all expenses up front, it’s called DDP – delivered duty paid.
If you go that route, you're already collecting duties when a product is purchased. This gives customers one price, ensuring they will not be surprised by hidden costs.
Do you think it’s easier for sellers to partner with already established global marketplaces to succeed in international markets?
If you have a strong niche for your products, and you already know your niche, it’s much easier for you to focus on your business and to try to engage with partners who have the ability to easily sell internationally.
If you want to focus on every aspect of a global ecommerce business, you won’t find yourself excelling in the niche you’re good at. For instance, if you’re good at buying products cheap and this is your niche, you only need to find the right partners in the right global markets that can do the cross border sales piece for you.
In many cases, US sellers are better off handling US shipping, while established partners take on their global shipping.
What global markets are primed for US products?
I think China, the Middle East – like Israel, for example – and also Europe are primed for US products. European countries, like Finland, have markets where prices are very high and consumers have money to spend. It is not always the largely populated countries like England or Germany, either. Sellers need to find niche markets within Europe, or elsewhere, to capitalize on.
If you could give US sellers one tip for cross border sales success,what would it be?
To better understand everything before you do anything.
Investigate, put in the time, understand general importing and exporting logistics. If you see the whole picture, but you still don’t quite get it, you can – and should – find a partner to save yourself a lot of time and money.