pros and cons of selling internationally

Technology has made the world a lot smaller. Today, we can communicate with people on the other side of the planet just as easily as with our next-door neighbors. And because it’s so easy to reach out internationally, it’s also easy to shop internationally.

That’s one reason that ecommerce business owners may consider expanding into the international market. However, international expansion isn’t right for every online retailer – it may not make sense for your business. To help you determine whether selling online to customers in other countries is right for you, we’ve listed some pros and cons of selling internationally to be aware of.

 

Pros of Expanding Your Online Business Internationally

What, specifically, does your ecommerce store have to gain from expanding internationally? Here are some advantages to consider:

  1. Increased Visibility for Your Brand. Any expansion is going to give your brand and your products more visibility, making it even easier to continue expanding in the future. This goes double for niche markets, who may have trouble sustaining a large enough customer base domestically.
  2. More Sales. At least, that’s the idea. To be successful in international markets, you do have to make sure that you are marketing locally to the areas where you are selling your products. This will encourage customer loyalty, establish local relationships, and improve your overall sales… as long as you understand the new market you’re breaking into.
  3. Less Competition. Believe it or not, going international means you will actually have less competition. This is because a quality product that sells well will deflate competition at the local level. Of course, there will always be customers who prefer to buy from local vendors, but more international markets mean a greater global market share – and that will help drive the competition away.

 

Cons of Expanding Your Online Business Internationally

On the other side of the coin, there are challenges you should be aware of before committing to an international expansion. Here are some of the disadvantages of international ecommerce:

  1. Time Zones. In international business, no one’s on the same schedule. To accommodate your new customers, you have to be creative with your working. While you can find outside help for customer service issues at all hours, you’ll still need to talk with suppliers and shipping partners during their business hours, which could mean some late nights or early mornings.
  2. Language Barriers. Language is one of the biggest obstacles in international business – that’s why it’s referred to as a “barrier.” While you’ll find plenty of people abroad who are fluent in English, you still want to make your online store convenient for your shoppers by translating it to their mother-tongue, not to mention customer service.
  3. Currency Fluctuations. Currency exchange rates can change at any time, and not always in your favor. That makes it more-or-less impossible to predict fluctuations, and a healthy profit could turn into a loss overnight. Additionally, there are often fees associated with currency exchanges, especially with credit card transactions, that further cut into your profit margins.
  4. Shipping and Delivery Issues. International shipping can ultimately derail an otherwise healthy business model, especially the carrier fees. Having local dropshipping suppliers who handle your order fulfilment is ideal. If that’s not an option, you will have to decide how to charge your international customers for shipping. Is it more practical to charge a flat-rate no matter where the shipment is going? Or, is it better to attempt to charge exact shipping, keeping in mind that the cost will be different for all the different areas that you ship to? You have to come up with a reasonable plan to avoid confusing your international buyers and losing money yourself.
  5. Cultural Differences. It’s not always about prices and shipping benefits – every country has a distinct culture that influences how they shop and what products they prefer. Research the different markets: Who will your customers be? What types of products will appeal to them? What is their buying behavior like? Unless you answer these questions beforehand, you’re just stabbing in the dark.

 

The Wrap Up

Choosing to take your online business overseas is a huge decision that takes careful consideration. For every dire challenge you face, there’s a lucrative opportunity. But if you take an educated approach, and do you research beforehand, you can prepare yourself for the best possible outcome, even if it means deciding against the expansion. But whether you decide to expand or not, it’s a decision that should not be taken lightly.

If you think you’re ready, make sure you follow these 5 tips for global expansion.

 

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