The International Lever of eCommerce Growth

We use the Volo Levers framework to think about the 10 levers you can pull, to varying degrees, to increase sales and productivity in your ecommerce business. On the sales and growth side, we’ve already covered listing quality, inventory breadth, channel coverage and promotions. In this post we’ll talk about cross-border trade, the 5th and final sales-focused lever for your webstore(s) and your international presence on marketplaces, including the major ones in the UK which are Amazon, eBay and OnBuy, as well as other overseas marketplaces.

It’s not an understatement to say that the international picture changed dramatically for UK sellers on the 1st January 2021, following frantic last ditch Brexit deals hammered out the week before, whose ramifications are still being felt across Great Britain and Northern Ireland. Changes to customs, tax and marketplace responsibilities affected the UK from the beginning of last year, and the EU followed suit in the second half of 2021. This has complicated affairs for UK sellers to the degree where in a Volo-ecommotors survey a year ago ‘Tax and Customs Changes in the UK and EU’ was the top blocker to growth, with 48% of all respondents citing it.

Across the Volo customer base the percentage of cross-border business has dropped considerably, mirroring the wider picture, and to compensate sellers have doubled down on domestic sales while also focusing unwaveringly on profitability. International conditions are starting to settle down and improve, however. So it’s not the purpose of this post to talk about IOSS numbers, or the £135/€150 threshold and when the marketplace rather than you collects the tax, or which carriers are better set up to support you; we recommend a good tax advisor for that. Instead, we’ll focus on what cross-border options are out there.

A caveat before we start however. While serving the ‘long tail’ of global online customers for your cool product sounds great, you need to prioritise. Each new country you consider selling to has barriers to entry, each requiring knowledge and experience to negotiate. There are currency and exchange rate considerations, insurance matters, and the legal & regulatory hurdles we’ve touched on. There are also language barriers, cultural concerns, shipping arrangements and returns policies to fathom. There’s also the customer service aspect to ponder. As you can imagine, depending on which country you import from, or sell to, at what order value, there are almost countless permutations that we can’t cover in a single post. What we can say, however, is that you need a plan of attack, covering which markets, which channels, what level of risk, what level of return, what time frame, and with which partners.

Simply speaking, your options boil down to three broad areas: webstores, country sites of global marketplaces, and international or regional marketplaces.

Webstores

We’re assuming that you’re a registered UK business. You can start by offering your products on your own website to international buyers, shipping to them directly from your UK warehouse. Many Volo sellers have concentrated on growing their webstore presences over the pandemic, with the greater control and profitability they bring, at the expense of attracting buyers to their site. In fact, web is now the largest channel among our customer base.

Starting with overseas markets that also speak English will enable you to park the language aspect for a while. If your products are seasonal, you can also look at markets that have their peak period at different times to yours, thereby growing your business and evening out to a degree any lumpiness in your trading picture.

Selling internationally is about finding new customers in less competitive markets for your product. It pays to research products and their price sensitivity in your target markets, to make sure you can make attractive offers to buyers who are OK with waiting the extra time for their order to be delivered. If quick delivery continues to be a key buying factor, you many need to consider drop-shipping from local supplier-partners, or using a third party logistics provider, or even investing in your own warehouse if the demand and potential justifies it.

Depending on your business strategy, you may consider having country-specific website addresses and websites hosted in the countries you’re targeting, to present a more localised offering to your buyers. Also, for countries whose first language is not yours, you need to build the business case for translating and localising the content for each key market. Here your options range from a DIY Google-translate approach through to translation and cultural advice agencies who use either human or machine-assisted translation – or a bit of both – for everything from your listings to your FAQ answers. You could even outsource the logistics and customer service elements to local providers, in return for a chunk of your margins.

Amazon and eBay International Sites

If you’re already selling on Amazon and / or eBay, a natural next step is to internationalise your offering on one or more of their several country sites. Marketplaces are not as profitable as your own webstore(s), but they offer potentially huge international reach, invest heavily their enormous traffic volumes and in the main are seen as highly trustworthy.

Amazon first. In case you didn’t know, it’s very, very big. It’s a highly recognised global brand, enjoys 200 million Prime members worldwide and back in 2018 was the initial product search destination for 45% of European consumers (so we imagine that percentage is higher now). At the time of writing, Amazon boasts 21 international sites: 4 in the Americas, 5 in Asia-Pacific, 3 in the Middle-East and 9 in Europe. A European account will give you access to international sites, making it an easy step for you to test the waters overseas – if you pardon the mixed metaphor – by offering a small number of listings to buyers in a country or two, rather than throwing all of your eggs into the international basket. You have to do the research though, so invest in a product like Jungle Scout or Helium10 to see what the demand on Amazon is like internationally for the products you have in mind.

FBA, along with Seller Fulfilled Prime, is a great way of reaching the Prime audience, and FBA items do very well in product search since the customer delivery experience will be second to none. For small, light and fast-moving items, you should consider using the FBA European network centres, since having your product there will ensure you can offer equally excellent delivery options to your buyers.

eBay has recently raised its game on the fulfilment side and now offers eBay Fulfilment, with centres in both the UK and in Germany for your EU sales. This is good news if you sell on both marketplaces since it gives you round-the-clock fulfilment flexibility in additional to any orders you ship yourself. As with Amazon, you should use the Terapeak tool to research the likely success of your products in various eBay international markets.

eBay has around two dozen international country sites and your eBay Seller ID allows you to list your products on them in the normal domestic way. There are different flavours to selling internationally with eBay. Basic International Selling allows your UK listing to be shown on overseas sites – so in the English language – and if you sell then you pay the eBay UK selling fee. Advanced International Selling allows you to put a listing and set the price on the eBay country site in question, in the local language, and buyers can see your UK reviews too because of the one Seller ID. Having an eBay Shop subscription may also give you access to similar benefits as you get in the UK and when you sell, you pay the eBay country fee where your buyer bought from.

Finally on eBay, the Global Shipping Programme allows you to send your international order to the eBay UK centre and they take care of everything else for you. Restrictions, and costs of course, do apply. With both Amazon and eBay you need to study the requirements carefully before deciding you’re eligible and jumping in.

OnBuy has been pushing selling internationally for a couple of years and has ambitious plans to open up 140 country sites; there are no dates for the rollout at the time of writing.

International or Regional Marketplaces

In addition to the global players (we haven’t mentioned Etsy, but they’re not as all-encompassing in their categories as the other 3 marketplaces we’ve talked about), there’s a very large range of marketplaces dedicated either to a certain region or else a certain category. They’re too numerous to cover in this post, and your shortlist of candidates will clearly depend on your own circumstances and ambitions, but this list is a great place to start.

Worth calling out though, and in alphabetical order, are Allegro, Poland’s biggest marketplace and the third largest in Europe, Cdiscount, based in France and with access to other marketplaces within the International Marketing Network, Fruugo, another global player which also offers free translations on listings, and ManoMano, a French-based European home improvement and gardening marketplace. Some of these players also round out their offerings with dedicated logistics solutions.

Mastering international or cross-border selling has become more complicated and challenging for UK sellers, but it’s still about managing the risk of entering new markets, streamlining your international operations and leveraging the benefits of language and seasonality. Fortunately, a large portion of the complexity can be take care of by inputting rules into rules engines and using automation to take care of the decision-making.

Systems like Volo’s are engineered to accommodate the latest customs, tax and other legislative requirements so that you’re listing, pricing and successfully delivering in the most effective way. Volo also allows you to control more business processes for multiple channels from one system, rather than having to duplicate the effort on each channel, and this includes Amazon FBA and eBay Fulfilment. Using the Volo system to grow international sales and profits can help you grow your businesses smoothly, safely and sustainably, by finding new customers with attractive lifetime values.

To talk with us about the International aspect of ecommerce and the other growth and efficiency levers in your own business, please send us a note here.