What is cross-border e-commerce?

You may have heard the term cross-border e-commerce and wondered what it meant or whether it was a good fit for your business. Perhaps you’ve even looked into a few third-party logistics partners but were left scratching your head. We’re here to simplify the conversation.

What is cross-border e-commerce—a definition.

Google defines it this way:

“It’s simply the process of selling products or services via an e-commerce website to buyers overseas. You can be a traditional brick-and-mortar store or purely an online business – what matters is that you’re reaching international customers in the international markets. It’s worth bearing in mind though, that while the concept is fairly straightforward, being able to tap into new mindsets abroad and persuade folks to try your products or services is no easy task. Tastes, cultures, competition and even attitudes to buying from foreigners vary in each country, so you’ll need to plan carefully before diving in.”

Source: https://marketfinder.thinkwithgoogle.com/intl/en_gb/guide/cross-border-ecommerce

Sadly, this is the mistake some companies make—growing excited about the revenue potential of selling globally, and then jumping in without a solid plan. This can lead to expensive results, cumbersome processes, and a lot of regrets. But, don’t let that sour your mood on the topic completely. Instead, let’s take Google’s advice, and plan carefully before diving in.

What you’ll need:

• A place to sell. This could be your own website or through a partnership with an online marketplace (such as Amazon or Mayple Marketplace).
• A way to get paid. Specifically, you’ll need the ability to accept payments in foreign currency.
• A way to get the order there. Once the order is placed, you need to be able to pick, pack, and ship internationally (a shipping and logistics partner can help with this).
• The ability to accept international returns. Remember, customers expect this to be as seamless as possible.
• Compliance. This includes staying accurate on things such as import and export fees, local regulations, and customs.

Yet, before you start checking off the items on that list, you’ll want to make sure you have potential international customers to sell to. While marketing plays a role in this, so does meeting customer concerns and expectations. As one example, “91% of shoppers will abandon retail sites if they don’t offer fast or free shipping.” (link)

What are some of the top concerns of global customers:

• Fast shipping time.
• Reasonable shipping rates.
• Accuracy of the order.
• Ease of returns.
  

Now that you know some of the requirements, as well as the customer concerns, you may be wondering whether it’s worth the effort. We cover the incredible size of the opportunity in another post (link to 8 cross-border stats), but here we’ll share four key reasons it is worth the investment. We’ll also remind you that, depending on the path you choose, implementation can be quite simple. We cover this in detail below.

Why invest in cross-border commerce

• Expand reach and revenue.
• Capitalize on existing site traffic. They’re already visiting your site and engaging with your marketing, why not sell to them?
• Increase brand awareness. Domestic markets can end up highly saturated with a greater expense for attention. International markets can offer increased awareness at a more efficient cost.
• Protect against competition. Build a wall around your market share by gaining a global foothold.
  

Finally, how will you put your plan into action? There are three primary paths to implementation:

1. Do it yourself

• Using online tools like Shopify and a payment provider, you can begin to accept international orders in foreign currency through your existing site.
• Legally, you’ll need to understand the requirements for each country you are selling into. This may involve customs, import/export fees, or other duties and taxes. Some countries will also require the setting up of a legal entity based within their borders.
• Logistically, you’ll need a way to fulfill these orders accurately, quickly, and cost-efficiently. This includes packaging, storing of goods, transportation partners, and an understanding of the costs throughout the entire journey.
• From a customer-experience standpoint, you’ll need a way to set expectations around cost, speed, and returns. If unmet, you run the risk of one-off orders without the hope of repeat purchases. If your promises do not line up with your customer’s expectations, you run the risk of missing out on the purchase.
• Ultimately, you may be able to save money by doing it yourself but be prepared for a lot of complexity and the on-going management of a piece-mealed supply chain. Customer experience may suffer as a result.
  
  

2. Sell through a third-party marketplace

• Using platforms such as Amazon or Mayple Marketplace, sellers can begin selling to international customers by outsourcing some of the processes.
• These platforms attract an audience on your behalf and they can also partner with you to help in the fulfillment of the orders and to manage potential returns.
• Utilizing these marketplaces can also reduce your complexities—legally, customs, and the supply chain.
• Depending on the platform, the fees and/or revenue sharing can be prohibitive to profitability, make sure to do your research.
• This option can be a good short-term solution depending on your brand aspirations. For those with the hope of larger-scale revenue and brand awareness goals, our final option may make more sense.
  
  

3. Partner with a third-party global logistics platform for e-commerce

• Unlike using a third-party marketplace, this option allows you to still sell through your existing website. There’s no great change required to your sales cycle and some partners even make it as simple as a single Shopify integration.
• There are two categories of partners:
  • First, those who take over just the shipping side of your supply chain. They’ll help you manage the order after it is placed, to get it to whichever country the customer is located in.
  • Second, those who proactively store your inventory in their strategically located warehouses, taking over the entirety of your supply chain—from fulfillment to shipping to returns and more.
• The first category of partners can help lift the supply chain burden but at a steep cost—slow shipping times at a high expense. We’ve seen that these obstacles are prohibitive to many international customers.
• The second category of partners is relatively new and they are bringing innovation to the logistics industry. For example, brands who partner with Mayple Global as their third-party global logistics platform, can reasonably expect 2-5 shipping, 99% same day order fulfillment, and express shipping starting at $7.
• These third-party platforms will also take care of the legal requirements, helping you to navigate the complexity of customs, duties, taxes, and fees.
• From a simplicity and customer experience standpoint, partnering with a third-party global logistics platform can be a fantastic option, especially for brands who have larger ambitions and want to invest in their own digital properties rather than relying too heavily on marketplaces such as Amazon or eBay.
  

Wondering how much this kind of full-service global fulfillment would cost your brand? Reach out to us and we’ll put together a quote.