Chapter 4 12 Common Mistakes When Selling Across Borders
Doing something for the first time is never easy. Before emerging technologies had accelerated growth rates, it was common practice to have an apprentice/mentor relationship when experimenting or simply growing your knowledge within an industry.
Today, those simple mentorship luxuries are almost extinct.
The rate at which technology is enabling growth is creating new, innovative ways of connecting with consumers almost every day.
But, while technology changes the channels and touch-points that merchants and consumers connect in, the underlying foundations remain the same.
The only thing that is changing are the channels and mediums in which we interact.
Here are two pros and cons to this shift:
- Fortunately, foundations have taught us a lot, and in many cases have standardized strategies and tactics that any merchant should consider when selling globally.
- Unfortunately, many merchants still make simple, yet critical mistakes that hinder the growth of their business when launching internationally.
Below are 12 common mistakes that merchants make when engaging in cross-border commerce:
- Big Technology Investments
- Calculating Total Landed Costs
- Copy & Pasting
- Not Getting Lost in Translation
- Dimensional and Physical Shipping Assumptions
- Disregarding Localized Merchandising
- Disregarding Promotional Calendars
- Ignoring Fraud
- Don’t Boil the Water
- Government and Political Constraints
- Managing Efforts from a Distance
- Marketplaces Aren’t for Premium Products
Let’s walk through each one of them and how you can avoid the pitfall.
The International Expansion Playbook
What if you are ready to invest in international expansion and localization to own a brand new market long before your competitors?
That’s what this guide will teach you to do.
1. Making Big Technology Investments
Whether it’s integrating an international checkout provider or leveraging a 3rd party channel manager, keep technology investments to a minimum when starting your global endeavors.
Your first 6-12 months will be trial and error, so give yourself the flexibility to move nimbly through your first year.
Investments should be focused on the following:
- Analytics and Data
- Market Insights
For platform needs, focus on finding agile, cloud technology that can be used no matter the location.
These platforms, like BigCommerce, have lower total cost of ownership than on-premise solutions and allow your teams to work remotely and in localized regions around the clock.
Use our Total Cost of Ownership Calculator to suss out the differences in bottom line impact based on your ecommerce technology of choice.
2. Forgetting to Calculate Total Landed Costs
There is nothing worse for an international customer than to get to checkout and then later be hit with a duties and tariffs bill.
When implementing an international checkout, be transparent with shoppers.
As a merchant, you do not have to mandate that international buyers pay for duties and tariffs upfront; however, you should communicate to them that they will have to pay later if they opt-out at checkout.
Note that if you have localized warehouses, you can avoid any difficulties around increased prices for duties and tariffs.
Vinyl Express, the leading online seller of used records (more than 1 million products in stock), is based in Stockholm.
The brand works wish resellers across the world, but also utilizes ShipperHQ to give customers transparency about their shipping costs –– which differ based on which reseller is sending it and the country the customer is in (due to duties and tariffs).
Here’s how they incorporate everything before checkout.
Complex International Shipping, Solved
Accepting payments in 5 countries, shipping from hundreds, here’s how Vinyl Express makes ecommerce work for their global brand.
The Importance of Trust with International Shoppers
As many as 19% of consumers don’t trust foreign shops, 18% of them worry about problems with customer service and 14% are concerned about paying in a foreign currency.
This means your business will need to put in place a localized shopping experience to ensure customers are not turned away at checkout.
As a part of building trust, think through the following touch-points in an international shopper’s experience:
- Localized customer service
- Payment methods
- Shipping methods
For merchants that do not have local distribution, meeting 3-to-5-day shipping expectations in countries like China and India is tough.
However, it is not an end-all for those that cannot.
If you are just beginning to expand internationally and do not currently plan to open more localized distribution centers, you can leverage carriers such as DHL, FEDEX, UPS, or USPS, to be transparent in your shipping terms.
Transparency can be evaluated in the following ways:
- Provide clear tracking details for international shipments
- Update international shoppers on any delays at the time of delivery
- Update your on-site shipping information to disclose shipping rates and terms for international customers
On BigCommerce, shipping information is managed by region –– and you can provide real-time quotes through integrations with FedEx and UPS.
For more complex shipping quotes at checkout (for instance, if you have multiple warehouses), you can use ShipperHQ to pull accurate information in seconds.
We have one of the most complex shipping structures you can imagine. We have suppliers all over the world. Some of them send records to us first and we mail-order to our clients, some send the records straight to the customer.
They all use different carriers, have different shipping costs associated with their product, and have different delivery times. All with different import and export rules and taxes.
It’s a very complicated system, but BigCommerce and ShipperHQ sync up to make it incredibly easy for us and our end customers.
– Rogier van Genugten, CEO at Vinyl Express
The International 3PL Route
For mid-market merchants, there are a substantial number of 3PL/fulfillment providers that can take shipping off your hands. In many cases, they have the means to provide international customer service support too, which can be a huge win for you.
However, be wary of how they ship items and that their methods meet customer expectations for your region. It is important that you evaluate these providers closely and their methodology, because it can eat into your margins.
Open Your China-based Distribution Center
Thinking of launching internationally in China? Use a service like China Division to get yourself a footprint in the area.
3. Copy & Pasting
Whether you sell domestically with a localized multi-storefront, on a marketplace, via a social commerce tool or simply on your single website, avoid copy and pasting content and media.
It simply does not work. Here are two immediate reasons:
- You won’t be appealing to your localized market (which can be taken as offensive)
- You won’t rank well for SEO in your region (where even the smallest spelling differences matter)
When localizing content, be sure to go the extra mile and tidy up potential language misinterpretations. Moreover, double check your media. The worst thing you can do is enter a market with poor, on-model product photography.
This is not referring to quality, but instead to understanding that consumers in new markets may look different. Take that into account as you use photography to highlight your products.
- If you are launching in Asia, show your products with Asian models.
- If you are launching in India, show your products with Indian models.
You get it.
Puma, one of the world’s leading sports brands does a great job of this.
Look at the images below to see how Puma completely changes both content and media to cater to a market, in this example, China:
4. Not Getting Lost in Translation
There is nothing worse than not understanding how words change by country.
For example, in 2004, Ford found itself in a bind by calling a car the Pinto, which means “little” –– well, male private part –– in Brazilian.
Safe to say that did not go well in Latin America.
The moral of the story is to investigate what key words you use mean in different languages. The even bigger takeaway is that even major global brands such as Ford miss the mark sometimes. So, take your time and go through with a fine comb.
Below, Ecommerce Nation provides a simple illustration of how even the simplest words can get tricky:
Translation Providers to Consider:
- Qordoba – Qordoba’s software is re-inventing the way that companies go global. With Qordoba, users can adapt their existing content for a new audience, with no additional engineering required. Content can be kept in sync across dozens of languages.
- Smartling – Smartling helps ambitious brands access more markets, deliver better experiences, and build stronger relationships by transforming the way content is created and consumed around the world. This translation software and services prioritizes process automation and intelligent collaboration so that companies can quickly and cost-effectively localize their websites, apps and documents with minimal IT involvement.
- VerbalizeIt – VerbalizeIt enables better universal communication for businesses and individuals. Communication is an essential aspect of life, and language barriers should never be an impediment to quality communication. VerbalizeIt uses its technology platform to connect those in need of translation with a global community of human translators. They increase your capabilities by allowing you to focus on your own goals, from creating the most effective global marketing campaign to asking for the best local gelato flavor in an Italian town.
5. Dimensional and Physical Shipping Assumptions
In the United States, merchants have become accustom to the “it fits, it ships” mentally that is prevalent with shipping carriers like USPS, UPS, FEDEX, and DHL (more on DHL payments here).
However, when shipping internationally, this can be a costly assumption. The first thing to fully understand is the difference in dimensional versus physical (weight) pricing:
- Dimensional Pricing – Shipping costs based on the size of a box, not the weight
- Physical (weight) Pricing – Shipping costs based on the weight of the box, not the dimensions
A merchant in the United States may have a 3x3x3, flat rate box, that if his/her products fits, it ships.
Domestically, yes; however, when shipping internationally, it is important that you understand whether the cost to ship is greater with dimensional or physical.
You will almost always be charged the maximum for international shipping, and you should include this in your overall product cost to forecast accurate margins.
Understanding hidden fees in air versus ground
Let’s take a country-specific example as we look at hidden fees here and assume you are a U.S.-based seller selling to Canada.
As you begin to ship north, it is important to understand the differences in leveraging Air vs. Ground in Canada.
Experts recommend the use of Air, as Ground options typically come with what is called a brokerage fee that is applied to the customer. Air, on the other hand, comes with pre-built pricing that includes the final mile delivery of your product.
Also pay attention to “Provincial Pricing,” which refers to variances in price that are contingent to which province you ship to –– the same way it might be for a state in the U.S. This type of pricing based on region within a country is common across the world.
Adjust the cost to ship if you use flat rate based shipping rules. You don’t want your customers to have to pay overages once your product has landed.
There is no such thing as “if it fits, it ships” in international shipping
One of the most common mistakes made by businesses new to international shipping is not understanding dimensional versus physical weight and how it impacts your rates.
For many, the common domestic practice is that “if it fits, it ships” –– but that doesn’t apply to international.
Let’s look at a package that is going to be shipped in a 3x3x3, small, domestic flat rate box. For national shipping, weight isn’t an issue.
For international shipping, weight often takes precedence.
This means that if the weight of the flat-rate box exceeds the dimensional weight, the merchant will be up-charged for the weight difference.
This is a costly mistake –– not only because you will need to pay, but you’ll also risk losing an otherwise happy customer.
Packaging: it is all about the inners
When it comes to shipping around the world, investing too much in outer packaging and inner “fluff” such as ribbons and tissue paper can significantly drive up the costs.
In some cases, it can eat up 50% of your margins.
Work with your 3PL or other warehousing providers to repackage goods and save yourself on shipping costs to international buyers.
6. Disregarding Localized Merchandising
When merchants sell globally, they must consider more than just inventory as a driver in which they merchandise their digital stores.
When selling globally, the following factors should be considered:
- Climate – Remember that your customers in various regions of the world will often need completely different things. If it’s summer in the Northern Hemisphere, your Southern Hemisphere customers aren’t going to be drawn to your sundresses, for instance. After all, it’s winter in those parts. The Australian ecommerce market, for example, is worth $15.5 billion annually, and June is traditionally the local winter sales period. Work to use IP addresses to show various merchandise. Your best option, however, is to localize your website.
- Consumer Demand and Trends – Different areas of the world prefer different things. This is driven by several cultural and socioeconomic factors. It is not the merchant’s job to necessarily understand them, but recognizing them and planning accordingly is a recipe for success in global merchandising.
The Gillette Error –– and Why Localization Matters
In the early 2000’s, Gillette’s market share ownership in India hovered around 35%. The company tasked itself with acquiring more of the 500 million Indians using old-fashioned double-edged razors, costing only a few pennies per blade.
Their solution was a low-cost, reusable razor with a plastic push bar that slid down to unclog the razor. The bar was added because Indian men traditionally have thicker hair and a higher hair density than some of their American counterparts. Plus, they often shave less frequently, so they wind up shaving longer beards.
To save on costs, the team then conducted user testing with MIT students of Indian heritage. The response was overwhelming:
‘They all came back and said ‘Wow that’s a big improvement,’ said Alberto Carvalho, vice president, global at Gillette.
The students loved it –– and in 2002, the blade launched in India.
And completely flopped.
Three years later, when Gillette was acquired by P&G, the team set out to India to figure out why the product lacked adoption. Carvalho calls the experience an “A-ha” moment:
Rural Indian men lack running water –– something their MIT test group had plenty of.
Without running water, the blade got stuck and was only good for a single use without cutting the skin.
The Gillette team stayed in India for 3 weeks, meeting with 3,000 men across the country to understand exactly what they needed and why.
It turns out, the answer was vastly different than what American men preferred.
- First, Indian men didn’t have water on hand – so a razor needed to account for that
- Second, Indian men’s biggest pain point with razor is getting cut – not the desire for a close shave (as is valuable in marketing for American men).
When the team came home, consumer feedback helped the development team to launch a new product that solved for regional pain points –– a razor for thicker, longer beards that doesn’t require water.
As of May 2017, Gillette India’s stock has hit a 52-week high, proving that you can’t just put a regional sticker on an American product and expect it to sell.
The Gillette case study is a good look at why it is so important that your products and marketing are localized for a region.
That said, there are issues common to buyers across the globe that you can prepare your brand for today (and likely even see higher in-country sales for solving, too).
7. Disregarding Promotional Calendars
Missing the boat on local holidays can mean millions, literally.
Below are key holidays around the world. Take note of those in your region of expansion, and be sure to plan campaigns for them the same way you would in your home country.
- Eid al-Fitr (Middle East) – The entire Ramadan period sees various sales events and in some countries, Eid al-Fitr is a guaranteed flurry of activity. In Saudi Arabia, for instance, it is estimated that consumers in that country collectively spend 10 billion riyals ($2.6 billion USD) on travel, entertainment and shopping during this period.
- Mother’s Day (Latin Countries) – RotaKvo.co.mx reported in 2014 that between 20 to 30% of Mexican consumers would check online before considering a physical store for Mother’s Day gifts. Meanwhile, visits to health, beauty, home and fashion sites can increase by as much as 20%.
- Singles Day (China) – This celebration day for singles has grown to become the largest online shopping day in the world. In 2016, $17.3 billion dollars’ worth of goods were sold through China’s Alibaba Group shopping platforms alone.
- White Day (Japan & Korea) – KoreaKme.co.kr reports that spending can be 15% higher on White Day, the “answer day” to Valentine’s Day.
8. Ignoring Fraud
As you sell in new markets, the risk of fraud inherently goes up.
Thankfully, there are several solutions to meet your business needs and provide you the security that you need to accept payments internationally and reduce chances of fraud (and even stop it in its tracks).
Preventing Fraud on Your Localized Website
If you provide international checkout on-site, there are two methods you can use to prevent fraud:
- Install a fraud suite through your ecommerce platform provider
- Leverage a 3PL to manage fraud
The first option is often the best solution –– giving you –– the brand –– the final say and ultimate control over fraud calls on the site.
Here are a few solutions:
Signifyd solves the challenges that growing ecommerce businesses persistently face:
- billions of dollars lost in chargebacks
- customer dissatisfaction from mistaken declines
- operational costs due to tedious, manual transaction investigation.
Signifyd does this by offering zero fraud liability. When they approve an order, they do so with confidence –– meaning that if any chargeback or shipping fees occur from a fraudulent order –– they take on the cost.
Here’s how BPI Sports uses the integration to stop fraud in its tracks.
Automated fraud protection that stops orders in their tracks
We had almost no fraud happen on the website for the longest time, but back in June, on our custom platform, we had a significant amount in a short period. Since then, there was continuous attempts on the site.
It got a point where every day I was checking the orders by hand, so when we went to BigCommerce we wanted to make sure we had a platform in place to catch a lot of those, and so far Signifyd’s worked out well.
When moving to a new platform, we wanted to make sure we had a system in place to catch those attempts. We found BigCommerce and Signifyd’s partnership works out well. We haven’t dealt with any chargebacks or anything.
So far it’s been catching a lot of things that we’ve seen before and red flagging them — all on its own.
BigCommerce and Signifyd also have a tie with Stitch Labs, where if the orders do get flagged, they are moved to manual order verification. That immediately stops the whole order so that it doesn’t get sent to our backend system for fulfillment. That’s worked out really well.
– Bill Maroulis, Digital Strategy Director at BPI Sports
Install Signifyd Now
Subuno is a fraud prevention and rules platform that helps merchants eliminate fraud, increase sales and improve operational efficiency.
- Reduce fraud and chargebacks
- Automate fraud detection and checks
- Increase sales and order acceptance
- Reduce order review time
- Remove customer friction and order delays
Riskified is a risk management solution that provides peace-of-mind verifying, approving and guaranteeing transactions. All approved transactions carry a 100% money back guarantee in the event of fraud.
Riskified was founded to solve the unique risk and fraud challenges that online merchants face when managing their business. Using technology developed specifically to address the major problems faced by today’s fraud managers, Riskified helps by:
- Eliminating any costs associated with chargebacks
- Minimizing the loss of revenue associated with false positive declines
- Ensuring customer satisfaction by minimizing friction and reducing review time
- Accelerating and maintaining growth without the fear of fraud
- Reducing the costs of ineffective fraud tools and freeing the time of dedicated fraud personnel
Preventing Fraud on Marketplaces
Selling in international marketplaces may increase your fees, but those marketplaces offer –– and some even require –– fraud and support resolution services.
For example, when selling in India, Flipkart provides merchants in-country shipping support.
Moreover, it is mandated that if you sell on Flipkart, you must use their distribution center.
This may result in added fees, similar to Amazon’s FBA, but it cuts down on fraud and gives merchants the ability to accept local payments like Cash on Delivery (COD) that are still preferred ways of transacting in emerging markets.
9. Don’t Boil the Water
Simply put, don’t move too fast.
Often, merchants become overzealous when engaging in cross border commerce. If you are going to sell, do it right!
A realistic goal for launching in to international marketing is to launch into 2-3 per year.
And that’s if you have a dedicated staff to do it!
It is always wise to launch in a single market first, get your bearings and create a blueprint to success that you can use in various other markets. This will help you to not experience the same mistakes twice, and give you a guideline (and timeline!) to success in each individual market.
10. Government and Political Constraints
When selling globally, you must be aware of and acting in accordance with specific country laws, mandates and political constraints.
For example, countries such as Russia mandate that all customer data must reside on a server in-country.
11. Managing Efforts from a Distance
When entering markets such as China, India and the United Arab Emirates, it is virtually impossible to do so from a distance.
While North American and Western European markets are more manageable without having in-country resources, the growth in emerging markets does not allow for that to be a sustainable model.
As you scale your team and enter new markets, recognize and weigh out the pros and cons in managing global versus local.
Examples of pros for leveraging local resources are:
- Avoids messaging, tone and voice getting lost in translations
- Better understanding of online shopping habits and local customs
- Quick turnaround on local executions of strategies and tactics
- Quicker at reacting to in-country market trends
While these pros are very appealing to merchants, they must proceed with caution. To successfully empower in-country, localized resources, merchants must do the following:
- Have clearly defined roles and responsibilities to avoid excess hiring
- Put in-place favorable compensation programs to ensure resources are committed, long-term
- Properly communicate the company direction and vision so that it is understood
Hiring global talent may be easier to recruit; however, putting in effort and time in building a local team can have greater success downstream.
The connotation for many Western brands is that marketplaces are not for them.
This is more often the cases for premium to luxury retail brands that feel being on marketplaces somehow dilutes the appeal of being luxurious.
This is a bad assumption.
The reality of cross border commerce is that international shoppers buy more from local marketplaces. This is simply the nature of the business in today’s ecommerce landscape.
Moreover, did you know that premium and luxury brands are now opening flagship stores on local marketplaces and social commerce platforms?
See some of the world’s most luxurious and premium brands now on marketplaces:
Adidas on TMall (China):
Coach on WeChat (China):
Chanel on WeChat (China):
All in all, the easiest way to launch an international site is to localize the site, the content, the products, the product images and even the product warehousing and shipping. But, not all brands take that route –– and even those that do still make some of these mistakes.
Make this your international checklist so you can learn from the mistakes of those who have come before.
The International Expansion Playbook
What if you are ready to invest in international expansion and localization to own a brand new market long before your competitors?
That’s what this guide will teach you to do.
Want more insights like this?
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Table of Contents
- 1. Making Big Technology Investments
- 2. Forgetting to Calculate Total Landed Costs
- 3. Copy & Pasting
- 4. Not Getting Lost in Translation
- 5. Dimensional and Physical Shipping Assumptions
- 6. Disregarding Localized Merchandising
- 7. Disregarding Promotional Calendars
- 8. Ignoring Fraud
- 9. Don’t Boil the Water
- 10. Government and Political Constraints
- 11. Managing Efforts from a Distance
- 12. Marketplaces Aren’t for Premium Products
Table of Contents
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