One of the biggest advantages of selling products online is the ability to reach customers from almost any part of the globe. But, while the expansion of your sales into international markets can greatly increase your sales potential, it is also rife with challenges. Many of the logistical challenges already faced by e-commerce brands increase tenfold when you start selling to multiple countries.
The good news is you can still overcome these logistical hurdles. It all comes down to your willingness to put in the research and preparation, and to work with the right partners.
3 international e-commerce challenges to overcome
1. Unreliable logistics partners
You may be perfectly comfortable with your own country’s logistics and fulfillment partners. But once you go overseas, your preferred providers may no longer be available. This can make it difficult to track orders or deliver products to customers in a timely manner.
Ultimately, you will need to research which shipping carriers are available in the destination country to determine which ones are reputable and affordable. Even overseas, reliable shipping providers should be able to provide tracking and insurance for your e-commerce shipments.
To better satisfy your international customers, try to offer multiple shipping options whenever possible. While some buyers are content to wait a few weeks for an item to arrive from overseas, a big part of the appeal of e-commerce is the ability to get deliveries quickly. Flexible delivery solutions help your customers balance cost and speed according to their needs.
Depending on the scope of your e-commerce business in a particular country, you could benefit from further expanding your operations with a fulfillment partner. Establishing a warehouse in the country and outsourcing logistics to a third-party fulfillment provider can help you deliver products faster and more effectively.
As Tommaso Tamburnotti, the CEO of Easyship, writes, “As you are closer to your customers, shipping costs are drastically reduced and delivery times will be quicker, resulting in more satisfied customers.… With outsourced professionals handling your order fulfillment, shipments will be packed securely and quickly with fewer errors, making same-day dispatches possible and shortening the delivery timeframe.”
2. Managing returns
The average return rate for online returns is 20-30%, though some industries (particularly apparel) experience even higher return rates. This significantly outpaces returns in brick-and-mortar businesses, where 5-10% of purchases are returned.
Most customers expect the returns process to be free. If you charge customers to return an item that already didn’t live up to their expectations, you are unlikely to get their business in the future. Factor in the possibility that the product itself may have been damaged, and you won’t be able to recoup those costs by selling it again in the future. For international customers, it may actually be cheaper to send a free replacement, rather than take on the costs of return shipping.
In reality, your best bet for dealing with international returns is taking steps to minimize the likelihood that customers will need to return your products in the first place. Collecting and analyzing data on the shipping conditions of your packages can be a good start in identifying issues that may occur before products reach a customer’s doorstep. Ensuring that products are safely and securely shipped will prevent damage and other issues that often lead to returns.
“Considering that 23% of product returns are because of inaccurate depictions of the product,” writes Peter Sobotta, CEO of ReturnLogic, “high-quality visuals that provide detailed views of items become crucial to bridge the gap between the consumer's expectations and the reality of the product.”
Detailed descriptions and photos—even offering 360-degree views or videos of your products—will ensure that customers know exactly what they are getting. Featuring customer reviews on a product page can also give buyers more information and greater confidence in their purchase.
Don’t overlook the value of surveying customers who returned products. This can be especially valuable for gaining insights from international customers, who may have different expectations and standards than your domestic audience. Updating product descriptions or making improvements to the products themselves, based on the feedback, will minimize future returns.
3. Dealing with customs compliance
Statista survey data reveals that navigating customs compliance is viewed as the biggest challenge for international e-commerce sellers, with 51% citing it as a major challenge for their brand.
Different countries have different standards, and you need to be aware of local regulations so that your shipments don’t get stuck in customs. Lengthy delays can prove catastrophic for gaining repeat business from customers in a particular country.
One of the most common issues faced by e-commerce businesses is failure to fill out paperwork for products that the International Air Transport Association (IATA) has classified as “dangerous goods.” This includes common products like powder cosmetics, liquid products, and items that contain lithium ion batteries. Additional paperwork or shipping fees may be required.
Some goods are prohibited from import into certain countries altogether. Do your research beforehand so you don’t waste your time and money trying to sell something that can’t legally get into the country.
When shipping internationally, most products will be subject to taxes and duties upon arrival at customs. If outstanding taxes and duties are not paid, the shipment will be held at customs. You don’t want to pass duty payments on to your customers. Unexpected fees or delivery delays will create significant ill will toward your business.
Prepaying all applicable fees will ensure that your products don’t get stuck. To account for these extra expenses, e-commerce sellers should simply account for them when setting pricing for international buyers. This way you can maintain the same level of profitability without springing an unpleasant expense on your buyers later.
Don't let international e-commerce challenges stop you from growing
Clearly, the costs and challenges of expanding your e-commerce business to international markets can be significant. However, diversifying your target audience can be key to maintaining growth in hard times.
Sometimes, e-commerce brands may even discover that an overseas market has a much greater demand for their products than the domestic audience they were initially targeting.
For example, most people today would never suspect that Red Bull is actually an Austrian company. If such massive international growth can happen for more traditional products, it can certainly happen for your e-commerce brand as well.
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