There are many ways to grow and scale an ecommerce business.
You could go from online only to brick and mortar. You could add new products, scale up your marketing, or take on wholesale buyers. Or you can take the exact formula that has worked for you so far and expand into new markets with it. You can go global.
That’s what I want to help you with today: Figuring out if taking your ecommerce business into new international markets is the right way for you to scale.
Here’s what we’ll cover:1. What opportunities exist for ecommerce stores around the world?
2. Is international ecommerce right for you?
3. How can you get started in global markets?
4. How can you expand your global presence?
5. How does Shopify Plus handle global ecommerce?
The global ecommerce opportunity
Every few years, we can look back on something and see when it really changed. I’m just old enough to remember adult life without smartphones. I don’t remember what we did on long car rides, but I know it didn’t involve a tiny screen.
Anyone involved in ecommerce probably remembers when buying things online was sketchy. The few trustworthy looking sites stood out. Being able to find what you wanted was much harder than it is today.
Both of those things changed. These kinds of sea changes don’t happen overnight. But at the end of 5 years or the beginning of a new decade, you can look back and see the difference between what was and what is. We are standing right at the edge of one of those sea changes right now.
Another ecommerce barrier is crumbling, and the next 5 years will see it fall. Until now, global ecommerce has mostly belonged to two groups: Massive multi-million dollar brands and the tiny sellers willing to deal with one-off shipments around the world.
As this barrier falls, global ecommerce is going to open up to all of the merchants that make up the glorious middle. Mid-sized businesses will be able to get their own piece of this huge pie.
Today, in 2018, the B2C ecommerce market stands at $2.3 trillion globally. That is set to grow to $4.5 trillion by 2021.
For B2B , the projected worldwide total for ecommerce in 2018 is $7.7 trillion. North America and Europe make up only 16% of that number, so the rest of the world represents a $6.46 trillion B2B ecommerce market.
So what we’ve got is a $12.1 trillion global ecommerce market that you can be a part of, and there are more new ways to scale up and take claim your seat at that table.
Where is this growth happening?
- China- $1.1 trillion+ in 2017
- Japan- Over $100 billion in 2018
- India- More than $25 billion in 2018
- Australia- Expected $15.5 billion in 2021
- United Kingdom- $268 billion by 2021
- Germany- $71 billion projected for 2018
- The Netherlands- $43 billion estimated by 2021
- Italy- $27.5 billion in 2017
- United States- $526 billion in 2018
- Canada- $28.66 billion
- Mexico- Estimate $39.4 billion by 2021
- Brazil- $14.5 billion in 2017
- Argentina- $12.4 billion projected by 2019
- Chile- $5.2 billion in 2018
North Africa and the Middle East
- United Arab Emirates- $10 billion by 2018
- Saudi Arabia- $9.5 million by 2022
- South Africa- $24.8 million by 2021
- Nigeria- $13 billion by 2018
It seems safe to say that ecommerce is a globally growing trend, and that buying and selling across the world is not a concept that is not dying out any time soon.
If you want to grab a piece of this worldwide ecommerce pie, we want to help you. Let’s talk, and figure out what your first steps should be.
Is international ecommerce right for you?
Why should you go global with your store?
Like I said in the opening, there are a lot of ways to scale a product business. Going international is just one of them. But it is one with huge potential ROI that can open new doors for your business.
The biggest reason to go global is the potential for large amounts of revenue that comes from expanding your customer base. The sheer numbers of new customers you could reach in new markets means a lot of sales you would otherwise never have seen.
Additionally, scaling globally doesn’t mean you can’t scale in other ways.
Almost any method you can use to scale domestically can be done in international markets, as well. You can sell B2B wholesale. You can introduce new products or target multiple market segments. You can sell through social.
Going international just means those efforts will reach a much broader audience.
When should you start thinking about global ecommerce?
There are signs to look for. If you see international expansions as part of your future, keep an eye on these signals to know when the time is right:
You have consistent success in domestic markets
If you have a proven brand or product that is doing well in your current markets, you have a success. That means you have a solid product, and you should take advantage of it by offering it to more people.
Paid ads are usually a huge source of traffic for stores. It simply works to put products in front of targeted, qualified customers.
But after a while, the ROI on your ads will start to slide, and your ad spend will start to creep up. All potential buyers have seen your ads. Either they have already bought from you, aren’t going to, or are not ready to make a purchase. This is ad fatigue.
What can you do to combat ad fatigue? Run your ads in front of fresh audiences. That means getting in front of new eyes in other places. If you are already targeting a domestic audience heavily, that means going after an international audience next.
Take a hint from your analytics
Analytics can be a great hint as to what markets are already interested in your products. If you have a lot of visitors from a given area, that could be the best place for you to start testing global markets.
The best thing to look for is geographic areas that see a lot of people adding a product to cart, but abandoning it when they get to shipping or payment pages. There is a good chance that they want to buy, but lack of good shipping options or native currency is preventing them from finalizing their purchase. Later on, we we’ll talk about how to overcome those problems.
You’re ready to grow the business
This one seems a bit simple, but it’s worth stating.
Selling to customers in other countries has never been easier than it is right now, and that is going to continue into the future. If you want to grow, this is a phenomenon that you should take advantage of. It’s a solid, sensible and profitable route for growth.
If profitable growth is what you are after, you should look at international sales as a potential cash cow. Milk it for all it’s worth.
Will your product work globally?
Not every product is an ideal candidate for global sales, even if they are ready to grow. There are reasons it could be too expensive to sell overseas or in specific markets, or that you just might not find enough buyers to make it worth the effort.
Here are 3 criteria you can use to see if going global is an option for you:
Can you ship it?
Shipping orders is one of the biggest barriers starting out. If you find a huge amount of success in a country, you can find partners to manufacture and warehouse closer to your customers and use local shipping partners. But all of that is very expensive, so in the initial phases, shipping is the biggest test.
Products that have a small size and low shipping cost are ideal for testing international waters. Ideally, you are looking for products with as low a weight as possible. If your product is extremely large or heavy, it doesn’t mean you can’t sell overseas, but it means that your customers are going to have to foot the bill for large shipping costs, or that you will have to partner with in-country help from the start.
If you can ship for a decent cost, you’re doing great.
Does it fit culturally?
Does it make sense for people in your target market to buy from you? Will the value proposition actually make sense for them?
You can sell American fashion styles in Europe or Latin America. But if you try to sell t-shirts with American pop-culture references, you probably won’t do so well.
Why? There is no cultural fit. You might get away with selling Baywatch t-shirts in Germany (Never forget that Germany has a deep cultural love for David Hasselhoff), but if you try the same thing with “The Office” memorabilia, you probably won’t get much response.
People around the world think differently about their homes, their clothing, their food. They have different cultural influences and everyday problems. North Africans don’t need dehumidifiers. The British rarely need air conditioners. The Danish don’t like to flaunt individual differences and achievements. Americans are all over the map and are actually made up of an insane number of regional subcultures.
Does it fit technologically?
Technology standards around the world could mean that your product will work out well in one market, but not in another.
If you sell an add-on for showers or faucets, the plumbing fittings could be different enough that installation is impossible. Electric outlets in different parts of the world are different in both shape and type of current used. Phones in different parts of the world have different standards.
So if you are selling anything that needs to be plugged in, attached, etc, you’ll want to make sure that you have a fit before you ship too many orders. Preferably you could find this out before making any efforts at all to sell, but it could be that you won’t sniff out any problems until initial customers have received their orders.
How can you get started in global markets?
So, if you’ve read this far, you probably think that going global makes sense for your business.
You know what doesn’t make sense? Diving headfirst into international waters without knowing how to swim. You should dip a toe in first. It will save you a lot of headaches and money.
Crossing the barriers to entry
The first thing to understand is that some markets will be easier to succeed in than others. You might already know for sure that there is a fit in a given country. Maybe you already get orders from certain countries despite not marketing there or offering a native currency option.
Your biggest barriers to starting out in a new market are:
- Shipping costs
- Language differences
- Different currencies
That means that to get started, you need to pick a limited number (1-5) of new markets to test. Before you invest a lot of time or money, you will test in those markets and see if it will be worth it.
Here’s how you can overcome those barriers and test out a new market to find out if it could be profitable.
If you are going to enter a new market, the first step is to find a shipping provider that can give you the lowest rates to your test countries. UPS and DHL are trustworthy and well-known options, but you may not be able to get the best rates.
There are other options that may help you find lower rates:
Shipping is a huge topic, and we’re not going to focus on it too much here. Shopify did a great in-depth piece on international shipping. Right now you are testing, so you just need to find a cheap and effective way to get a package to a customer in another country.
Since your marketing and website exist in just one language, selling to people who speak a different language is a bit of a problem.
The easiest solution is to start off selling to those who speak the same language. For example, if you are based in America, you have several English speaking countries to test out:
- The UK
If you want to try selling to countries in a different language, some will be easier than others. If you are starting with English, you should focus on languages that share similar traits and structures. Latin-based, left-to-right languages will be easiest.
- Spanish (Spain, Mexico, Latin America)
- German (Germany, Austria, The Netherlands, Luxembourg, Switzerland, Belgium)
These countries also share many values and ideas with English speaking nations and are mostly economically prosperous. So translation will be straightforward, you are likely to have cultural fit, and shoppers have disposable income.
A couple of notes on testing new languages
If you choose to target countries where people don’t speak your primary language, your best way to do it is to create a copy of your store on a new domain or subdomain and hire someone to translate your site.
When you test your products in a new language market, hire a native writer to translate the copy for your primary pages and products, and start with those. If you have success, you can always bring over more content and more products later.
In addition, you will need to translate your ad copy and your basic marketing emails (abandoned cart, order confirmation, new customer, etc)
There are automated translation solutions, but most of them create problems.
Automated translators usually work very literally, and can miss subtleties and differences in meaning. This can even happen within the same language, such as American versus British English, or Mexican versus Spain with Spanish. Within the same language, these differences are subtle and can be stood, but between different languages, they could cost you sales.
For merchants on Shopify and Shopify Plus, this is the easiest problem to overcome.
Shopify Plus will soon support end-to-end currency support for 9 new currencies. Shoppers will be able to browse and checkout with their native currency, which will be auto-selected by location.
For those on regular Shopify Plans, Bold’s Multi-Currency app is a huge help, and it’s free. It will detect location and allow shoppers to shop and checkout using their own currency.
Do you think your store is a good fit for international expansion? Want help taking your products to the rest of the world? Give us a call, and we'll talk about how you can use Shopify Plus to build an international success.
The easiest way to test a new international market for your business
Before you make a decision on whether or not a specific geographic market is right for you, test it. See how sales go, see if you have support issues and good technological fit.
Do this BEFORE you spend time building infrastructure in a new market.
Preferably starting out by using your existing site, find 1 or more markets you can test that meet these 3 criteria:
- You can ship there effectively
- Your product fits culturally
- Your product fits technologically
To make the test as simple and low-cost as possible:
- Start in your own language so that you don’t have to translate
- Use Bold Multi-Currency app to eliminate currency difficulties
- Find your best shipping options to get product to your new market
Once that is done, start targeting your test markets with advertising. Again, if you have gone the best route and are starting with countries that speak the same language, you can just re-use your existing ads and target them towards your test markets.
You can use lookalike audiences, target email signups from your test markets, or any other strategy you want to target your ads. Facebook is great at narrowing it’s focus down, so if you give it a bit of information to start on and set your budget, your targeting should improve quickly.
You could even add a note at the top of your homepage that you now offer shipping to these new markets. Even though you are still selling from your existing store, the added currency functions and better shipping options should see you convert more traffic from your test markets.
How can you expand your global presence?
Once you’ve had a taste of global success, you will likely want to keep it going. That can be done in two ways:
- Test more new markets
- Solidifying existing markets
The first is easy. You know how to test new markets. Find the ones that meet your criteria and look profitable, and test them. If they work out, you have a viable new market to expand into. If they don’t work out, you didn’t spend a lot of money on your testing, so it’s not a big deal.
The second is more complicated, but important for long-term success.
Establishing yourself in your new markets
Once you have found success in a new market and are sure that it’s worth the effort, It’s time to up more permanent and advanced infrastructure in your business. This will allow you to get all your ducks in a row in terms of legal, financial, and logistics
Here is a quick rundown of how you can go from test market to fully established:
Get legal and accounting help
Before you can fully take on international selling, you’ll need to make sure you have all the proper paperwork done and are legal to operate in your new market.
As long as you are testing and don’t ship anything that destination countries consider banned or dangerous, you shouldn’t have any issues with a small number of orders. But remember that we are not lawyers, so don’t tell the judge that Underwaterpistol told you it was okay to ship sketchy stuff. We’re not saying that at all.
Legal requirements will be different for individual country you will be expanding into. If you were beginning to sell in the US, you would need:
- A registered business presence with whatever corporate structure you choose
- Individual Taxpayer Identification Number
- Sales Tax Permit
- Business License
- Local Banking
When you are ready to expand, your best way to proceed will be to find someone that helps businesses in the locale you wish to expand into. If you have someone who understands the local legal and business landscape, they can save you time, money, and headaches.
Pay your taxes
International business regulations can be cumbersome, but taxes introduce another level of complication altogether. Make sure you have help on-board to find your way through the quagmire of costs. This will help you figure out a pricing system that will let you actually turn a profit on your new international ventures.
Things to consider for international accounting:
- Customs costs
- National, regional, and local taxes
- Shipping costs
By finding help with these issues early on, you can avoid getting hit with unexpected expenses and penalties. You will know what your profit margins will be and avoid hidden costs that could sink your new venture before it takes off.
Work with local suppliers and manufacturers
While it’s not impossible to maintain needed levels of stock working with out-of-country product suppliers, it can add difficulties and months of lead time on shipments. That would mean dealing with low stock levels, long transit times, and high shipping costs, all of which eat into profit margins.
If you can find local or regional sources for you products, you can cut out many of these problems. Depending on the region, you may even be able to drastically cut your production costs by working with local producers.
There are several supplier directories that will help you find someone who can help you source products closer to their point of sale anywhere in the world.
Take advantage of local warehouses and fulfillment
Whether you source products in the region where you sell them, or ship in from out-of-country, you need to ship to customers locally. Long shipping times and high fees will cause shoppers to buy elsewhere.
You can avoid these issues by stocking and shipping locally. A regional or local shipping partner is a must-have if you are serious about actively moving into global markets.
If you cannot find a suitable partner, or are dedicated to a long-term move into a regional market, you could open your own warehouse and order processing center. While this could be a costly venture, you would have greater control over quality and how your products are handled.
Use local shipping providers
Wherever you store and ship product from, you’ll need a shipping provider in your new markets to reach your buyers. Just like in domestic markets, you will likely want to offer multiple choices covering a range of shipping times and price points.
We discussed shipping in another section, but if you start fulfilling orders from local or regional fulfillment centers, the way you ship will probably change from when you are testing.
Use native language writers for translation
Setting up a site to sell in a new country is one thing. Just having local currency, language, and delivery options will make a big difference. If you really want to move fully into your new market, though, you will need to optimize for it.
Meaning is the most important part of communication, and sometimes meaning gets lost in translation. Instead of just translating your site, hire a native language writer to help you optimize your value propositions, copy, and content for your new audience.
In testing mode, you can get away with just translating your main products and pages. Once you are fully involved in a market, you will need to optimize your language-specific sites and make sure that you can make updates through your native-language writer as often as you need.
Don’t forget that it won’t just be site content, you will need emails, ads copy, and customer support communications in native language as well.
If you want to work with really high-quality translation services, here are two of your best options:
- Langify- An app that connects your store with translators
- Weglot - A Shopify app that fully translates all your store in minutes (Products, checkout process, …). You can order professional translations directly from Weglot or invite your own translators.
- Translate My Store- A service, currently in beta, provided by an entrepreneur who has taken dozens of stores through the translation process himself
How does Shopify Plus handle global ecommerce?
We love Shopify and use it exclusively with our clients. That’s because we think it’s the best option for merchants who want to build a serious business and make lots of money. We want our clients (and readers) to make lots of money.
So the final thing to address is how Shopify handles international ecommerce.
“We want to create an integrated experience across our platform so you can grow securely and confidently. We want to do all these things while giving you the flexibility to choose your path to global expansion.” - David Cameron, Global Product Manager at Shopify Plus
First things first, we’ll say that the best option is to use Shopify Plus. It’s built for merchants who want to grow and scale, and offers more high-quality tools to merchants. You can sell globally on one of the standard Shopify plans, but you would be better off with Shopify Plus when it is time to scale internationally.
If you need a bit of help deciding whether or not you should upgrade, check out our comparison of Shopify and Shopify Plus.
How you can use Shopify Plus to manage multiple stores
When you create a Shopify Plus account, you get access to 10 total storefronts from that one account. Each of those storefronts can host an entirely different site, each of which will be managed separately. They can use a sub-domain or a totally different domain name.
Let’s say you are a US based retailer using Shopify Plus.
- Your main site targets an English speaking, American audience.
- You have tested the UK, Ireland, and English speakers in mainland Europe with ads and your existing Shopify site.
- You had enough sales in testing to go forward with full-time sales in these new markets.
- Positive results leads you to create a separate site for your new market
- You clone your existing site to spin off a copy.
- You now have 2 English-language stores. One for Americans, one for UK and European English speakers
The content on each of these sites is managed separately from here on. That means you can make changes to content on the UK based site to make European audiences feel more understood and comfortable buying from you.
Together or separate
When it comes to your new storefront, everything will be controlled separately:
This allows you to maintain separate inventory and tracking for each new storefront you use. It allows you to better optimize marketing, CRO, customer support, inventory management, etc for the individual stores.
This is a major point of contention for some merchants. They want to control all orders and inventory from one main dashboard. While this is understandable, the Shopify way does streamline the management of individual stores. If you establish different chains of supply, inventory management, and fulfillment in your new markets, this makes a lot of sense.
If you do still want to manage all stores from the same screen, Shopify Plus open APIs will allow you to work with any third-party logistics and management software you choose. That flexibility means that no matter how many new markets you take on, you can manage them separately or from a single screen, depending on your needs and preferences.
As of this writing, Shopify Plus is working to add in automatic currency conversion. That means shoppers will see local (or a major regional) currency while shopping, and then use that currency to complete their purchase as well. They can pay in their preferred currency, and you get paid in yours.
In addition to currency, Shopify Payments is increasing the number of ways that customers can transfer money. Credit cards are always an option, but now bank transfers and apps preferred in other locales are being offered as payment options.
While you’ll have to take care of translation yourself in some way (Langify and Translate My Store are solid options), you can re-direct customers to their localized version of your site. Shopify allows you to geo-locate based on IP address, and then seamlessly send visitors to the correct site.
Starting a new store
With Shopify Plus, you can simply clone your existing store. That means that if you are going to target a new market in the same language, you can leave your site largely untouched.
If you want to target a new language, but leave your site design and visual branding the same as your domestic site, you can do that easily.
If you want to scale and take on new markets, now is the time. The technology to do it has never been better, and the economic opportunities are huge. Get in early, test your products, and establish yourself as a worldwide ecommerce player.
When you are ready to build a global Shopify business, we’d love to help you. If you want to talk about how you can take your business on a trip around the world, we’re here to help.