More entrepreneurs want to start their digital businesses after seeing the potential for revenue within the industry. By going digital, entrepreneurs open their businesses to new opportunities, like cross-border eCommerce.

In this short guide, LitExtension – #1 Shopping Cart Migration Expert will discuss what you need to know about cross-border eCommerce, including the challenges involving opening your business to consumers from the other side of the world. After reading, eCommerce entrepreneurs planning to sell outside their countries can develop the proper strategies to overcome these unique hurdles.

What Is Cross-Border eCommerce?

Cross-border eCommerce is the process of buying and selling goods and services online between consumers and brands in different countries. Selling internationally can be the right strategy for entrepreneurs looking to expand their business, discover new markets, and export their products.

Forecasters expect the eCommerce market revenue to reach $3.64 trillion in 2023 and grow to $5.56 trillion by 2027 (Source: Statista). The projected growth will inspire more business owners to sell their unique products and services online.

While this process expands brand reach, it also gives modern consumers access to a broader range of offerings at competitive prices.

1. Fundamentals of cross-border eCommerce

The pandemic boosted the eCommerce industry, and now, cross-border online selling has become a prominent trend as more entrepreneurs aim to tap a lucrative global market. With the growth of eCommerce, brands can now reach international buyers without having to set up brick-and-mortar stores in other countries.

The growing popularity of cross-border eCommerce gave shoppers more options and easy access to a broader range of products. However, the trend has also opened up new opportunities for businesses. Below are the different types of merchants who can benefit from cross-border eCommerce:

Small and medium-sized businesses that do not have the resources and finances to establish a physical store in other countries
Sellers with niche offerings looking to find new customers outside their countries and increase their revenue
Online creators seeking to reach a global audience and offer their new services and products to customers in other countries

2. Types of cross-border eCommerce

There are three types of cross-border eCommerce:

business-to-consumer (B2C)
business-to-business (B2B)
and consumer-to-consumer (C2C).

B2C transactions involve traditional retail, where brands sell directly to buyers. In B2B eCommerce, another brand is the customer instead of an individual consumer. Meanwhile, C2C eCommerce involves consumers selling products to one another through digital marketplaces.

To get a clearer picture of these different transactions, let us take a closer look at the three types of cross-border online selling at the table below.

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Advantages of Cross-Border eCommerce

The cross-border B2C eCommerce market could reach $7.9 trillion by 2030 (Source: Statista). If you are wondering what is fuelling the growth, we have compiled some advantages of online cross-border selling.

1. Ensure demand all year round

Centralizing opportunities for profit in a single location can be devastating for a business, especially in seasons when the demand for a product or service drops. Cross-border selling addresses this problem by allowing entrepreneurs to cater to different market cycles around the world.

For example, thanksgiving in Canada occurs on the second Monday of October, while Americans celebrate it on the fourth Thursday of November. Instead of selling Thanksgiving-themed gifts exclusively in November, brands can market their offerings earlier to Canadian consumers.

2. Maximize selling of low-demand domestic products

Selling products with low demand in your location can take time and effort. Once you sell to other countries, you might find customers who need your product, boosting revenue and business sustainability.

For example, you are a passionate fashion designer who wants to design clothes for winter wear. If you live in a country with a warm climate, you may struggle to sell your new clothing line. However, by reaching out to countries with colder climates, you can continue doing what you love while making a profit for your business.

3. Provide international expansion opportunities

Selling internationally opens your business up for bigger and better opportunities. For example, Apple sells products to international consumers through its online website. By accessing newer markets, the brand gains a competitive edge, which increases sales and revenue.

4. Build positive customer relationship

Cross-border selling presents brands with a crucial opportunity to build healthy and fruitful relationships with international consumers.

Selling your offerings outside your country can build brand awareness while establishing new relationships with foreign customers. For instance, selling your products in Asia can help create a community different from those you made in Europe and America.

5. Boost brand awareness

Brand visibility can be a crucial element of business success. Selling in international markets places you in front of a global audience, which can help establish your brand as a market leader. If you provide products of unmatched quality, creating a global community with enthusiastic shoppers can be possible.

Challenges of Cross-Border eCommerce

Entering international markets can add a layer of complexity to your eCommerce business. Creating a digital store can already be complicated enough before you have to add different languages and currencies into the mix.

Let us look at the common challenges associated with cross-border online selling.

1. Think about currency conversion

You must consider the different currency exchange rates when pricing your offerings for international customers. Currencies fluctuate and can be unpredictable, which can burden customers calculating exchange rates at checkout pages.

To ease this burden, your online store must display the right currency to the right customer. Otherwise, they might abandon their carts to avoid the hassle of converting currencies.

2. Experience language barriers

You must ensure your website and customer service representatives communicate effectively with your foreign shoppers if you want to offer the best possible customer experience.

For example, you can hire multilingual representatives who can speak the languages of your target customers. Other solutions you can try include working with translators or outsourcing customer services.

3. Face legal and compliance issues

Selling products and services overseas can be complex because you must navigate different laws in each country. Additionally, the laws vary from country to country and involve regulations about tariffs, taxes, and product safety standards.

That’s why you should educate yourself and your whole team about these regulations so compliance will not become an issue.

4. Deal with shipping and logistics

You may have to deal with the complex nuances of international shipping and logistics when selling in another country. Examples of these nuances include different customs regulations, shipping options, and delivery times.

The same problem occurs when handling returns and refunds. You must also consider each country’s different laws and regulations when developing their strategy.

5. Look into localization

When you sell your product to a different country, you must consider cultural differences. This process includes adapting products and even marketing campaigns to suit the cultural nuances of your target market.

Remember that an excellent cross-border eCommerce strategy starts with the consumer journey. Selling to foreign consumers in a localized fashion can help expand your reach while elevating the customer experience.

Creating a global website equipped with unique features specific to each region’s currency, language, and culture should be the first step to your strategy. With the right combination of logistics providers and technology, your business can provide a localized experience to all buyers, regardless of their location.

6. Use different payment methods

You cannot use a single payment method for transactions with customers from different countries. If you want to get as many foreign customers as possible, you might have to prepare other payment methods, which can be tedious.

However, overcoming this hurdle is crucial if you want to accept payments from customers outside your country.

7. Look into cybersecurity

Unfortunately, cross-border eCommerce can also expose businesses and consumers to cybersecurity risks.

Today, there are various cybersecurity tools that add a layer of security for users when surfing the web. There are virtual private networks (VPNs) and a wide range of antivirus tools available for consumers online.

However, when shoppers visit your eCommerce site, you will be responsible for keeping their data safe and secure. If you ever decide to sell to foreign buyers, you must ensure you can protect sensitive customer information throughout the transaction.

Tips and Tricks for a Successful Cross-Border eCommerce

To significantly improve your odds of success, you will need an effective cross-border selling strategy. The tips and tricks below can help inform your development process:

1. Research thoroughly

If you want to find the right shoppers for your business, doing your research is a must. By researching the international markets with the most demand for your offerings, you can end up with an engaged audience and interested customers outside your country.

By answering the following questions below, you can get an idea where your products or services will be most successful:

What is the state of the country’s economy?
What are the country’s trade regulations?
Are consumers in the country buying products from cross-border eCommerce businesses?
Can you compete with local products?
What are the shipping regulations you need to follow?

2. Check unrestricted trade items

Before delving into cross-border online selling, you must check unique product restrictions that could affect your business. For example, you may pay attention to specific regulations involving items like food, medication, beverages, and disinfecting devices.

Entrepreneurs planning to sell their products in the US can visit the Customs and Border Protection (CBP) website to see a list of prohibited and restricted items within the country.

3. Meet customer expectations

Remember that customers will not be as forgiving just because you’re an international seller. Consumer expectations are the same for domestic and international sales, so you must do your best to meet their requirements and needs.

Common customer expectations in terms of eCommerce shopping include the following:

Free & simple returns process
Clear information involving delivery charges before purchase
Free delivery if purchases go over a specific value

Expand Your Brand Reach Through Cross-Border eCommerce

Knowing the challenges in cross-border eCommerce can help you prepare your business for smooth online transactions with international customers. With the right eCommerce strategy, you can expand your reach and increase profits for your business even without the resources for establishing physical stores outside your country.

FAQs About Cross-Border eCommerce

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