About Cross Border E-Commerce
Cross border e-Commerce is only becoming more popular. This market will be worth over 7938.01 billion USD by 2030.
Retailers aren’t subjected to selling items only in their local market anymore. Brands can sell products overseas and offer their items to anyone worldwide. And with the right strategy, e-commerce businesses can attract a decent audience this way.
So, if you’ve been selling locally or nationally, but aren’t getting the conversions and sales you need to keep afloat, you might want to try cross border e-commerce.
Continue reading this guide to learn essential cross border solutions and discover everything about expanding your international audience.
What Is Cross Border E-Commerce?
Cross border e-commerce is when you sell products from your local region to another country. With cross border e-commerce, you can experience serious sales growth and widen your customer base, without setting up a separate shop or fulfillment center in another region.
This selling strategy isn’t new, it dates back to the initial formation of Amazon. Thanks to this marketplace, online shopping is popular worldwide.
In 2022, 21% of global retail sales occurred online. Because cross border e-commerce is so popular, most marketplaces allow for cross border transactions.
While cross border e-commerce has many benefits, it’s important to know what this strategy entails and how to be successful as an international seller.
Benefits of Cross Border Selling
There are many reasons to open your store to cross border e-commerce. For example, you’ll be able to expand your audience, increase sales, and create a unique selling proposition.
Let’s review each of these benefits in more detail.
Expand Your Audience
There are times when buyers need an item they can’t find in their local region. In this case, they will go online to find what they need.
By creating an effective cross border e-commerce strategy, you will make it easier for international consumers to find your store and purchase your items.
You attract a larger audience when you market yourself to a global consumer base. This will ensure you maintain a healthy number of website visitors, leads, conversions, and sales.
Do you strive to hit more sales figures but are currently stuck? If so, try attracting an international audience.
Venturing into foreign markets can increase your customer base, which means you’ll have a better chance of hitting those sales goals.
Selling internationally is an easy way to gain an advantage over your competitors. Let’s put it this way–if your competitors haven’t expanded into international markets yet, they eventually will.
It’s up to you to achieve global e-commerce expansion first and gain an edge over the competition. This way, you build a presence in that region before your competing brands do.
Challenges of Cross Border E-Commerce
While growing your business internationally offers many benefits, you’ll encounter roadblocks when crossing into new country borders.
Here are the main challenges you can expect.
If you sell locally or regionally, handling logistics is much easier. You likely have a storage space or a warehouse where you keep your inventory and ship using USPS or several shipping companies.
However, the logistics side of e-commerce gets tricky when you sell in a different country. International shipping is expensive and can take a long time.
So, if you plan on making cross border e-commerce a main strategy, you’ll need a solution to store and ship your products that will save time and money for you and your customers.
Accepting payments from consumers in different countries can be difficult. Certain payment programs may not be available in other regions. For example, Zelle is only available in the U.S., which can be tricky if that’s the main form of payment you accept.
There’s also the issue of converting different currencies. If you’re in the US, your items may be cheaper for customers in other regions, like the UK. But if you’re selling items in Mexico, your products can get expensive if you don’t price them specifically for that region.
To price your products in different countries, identify your biggest local competitors and price your items as closely to them as possible. If your overhead and shipping will be too much to make your ROI, consider selling in another country.
Cross Border Restrictions
Every country has different legislation and regulations concerning their products. For example, if you plan on selling food-grade items in Europe, ensure you aren’t making your products with banned ingredients in Europe.
You may also need certain licenses or permits to sell an item, but you don’t need any to sell the same products in your country. And even if no restrictions or permits are required, it’s still important to consider customs.
Customs may be strict about paying duty fees and have other shipping requirements. Your items may be stuck at the border if you don’t satisfy these needs.
Beyond the logistics, financial, and legislative side of conducting business internationally, you’ll also need to understand your market.
Some items may be more popular in certain regions, and maybe your customers in different countries have various needs that you may not have considered. Not conducting this research can result in a lack of international sales, and you’ll have to start over from square one.
Researching these markets can be intimidating, so focus on the products you sell and find the countries that will most appreciate these items.
75% of people in the world don’t speak English at all. When selling in different countries, it’s important to have your website content and customer service available in their language.
Also, understand that AI language translators are usually not accurate. It’s best to hire representatives in these native regions to translate your services.
This can be expensive, so we suggest first identifying your target country markets and the main language they speak.
Remember that some regions are bilingual, and consider if investing in different language translation services is smart for your bottom line.
Cross Border E-Commerce Best Practices
While entering the international e-commerce market comes with some challenges, you can still be successful with the right method. Here are some actions to follow to succeed in cross border e–commerce:
- Identify the best countries: Always start your strategy by identifying the best country (or more). Conduct consumer research to ensure your products are in demand, there are few restrictions, and shipping to that region is convenient.
- International fulfillment and logistics: Shipping internationally can be a hassle, so look into third-party logistics and other fulfillment options. These businesses offer solutions such as distribution, shipping, and warehousing. For example, you’ll have many logistics options when selling on Amazon, such as remote fulfillment or marketplace expansion.
- Know the tax laws: Every country has tax regulations and rules. Always ensure you comply with the region’s tax laws, such as in Mexico. If necessary, hire an accountant located in that country.
- Use the local language: Language barriers can make or break your business. Outsource customer service representatives in their local region. You’ll also want to make your product listings available in different languages to ensure you can attract an international audience.
Global E-Commerce Trends
Since cross border e-commerce is so popular, many trends make the process more convenient and affordable. These trends also make finding your business easier and complying with international legislation.
- Social commerce: By 2025, 5% of e-commerce sales will come from social media. And since 4.80 billion people worldwide use social media, social commerce is an easy way to increase your international audience. Social commerce is convenient, and it’s easy for customers to share your products with their loved ones.
- Custom recommendations: 92% of customers are influenced to buy a recommended product, especially when that recommendation was based on their past purchases. This is why platforms such as Amazon offer “Selected for You” or “Frequently Bought Together” sections. Amazon does this by using browsing behavior, past purchases, and demographics.
- Data privacy: E-commerce companies are often the target of cyber attacks. This is especially true if you’re selling internationally. An excellent online security strategy will save you from cybercriminals and ensure you stay compliant with potential data privacy laws.
Can I do cross border e-commerce on Amazon?
If Amazon operates in that region, then yes. Amazon is one of the leaders in cross border e-commerce, right next to Alibaba.
You should still research to see if Amazon is popular in that region, what competitors are charging, and if there are any regulations to know. First-time cross border e-commerce sellers should also learn the basics of becoming an Amazon international seller.
Does cross border e-commerce come with a lot of expenses?
Some common expenses with cross border e-commerce include a website, marketplace fees, logistics, warehousing, shipping, and/or fulfillment fees.
You should also consider the costs of hiring local staff, such as translators, customer service professionals, and accountants.
I sell B2B products. Should I try cross border e-commerce?
You can sell anything over different country barriers, including B2B products. Every region has different popular products, and most are B2C items.
Is the future of cross border e-commerce promising?
Cross border e-commerce is an effective way to increase brand visibility and attract a diverse customer base. That said, it’s still essential to follow cross border e-commerce and market trends to stay competitive.
Sell in Mexico Using Cross Border E-Commerce
Are you interested in expanding to a new country? Mexico is one of the most promising markets for cross border e-commerce. The online Mexican market is expected to grow by 12.93% between 2023 and 2027.
But expanding to Mexico comes with its challenges. One U.S. dollar equals 17.01 pesos, so it may be difficult for international sellers to offer affordable products while making their ROI.
You must also consider that only 12% of the population speaks English, so hiring a translator and Spanish-speaking customer service reps is essential.
That said, selling in Mexico shouldn’t be off the table, but international sellers may need assistance. This is where GoAvance comes in. We offer many services to help you sell products in Mexico, such as logistics and marketing.
Click here to learn more about our services.
Stephanie Jensen has been writing e-commerce content for seven years, and her copy has helped numerous stores rank on Amazon. Follow her on LinkedIn for more insight into freelance writing and creating high-quality content.