Sell International - Deliver Local (Part 1)

February 12, 2009 · by Nate Gilmore

What does it take to scale a business internationally? Just like growing a domestic business, the goal is to drive customer satisfaction and earn repeat customers, provide prompt and accurate delivery, and avoid subjecting buyers to hidden costs. But, how do merchants do that when selling means operating in a foreign market? Not knowing the ins and outs of a local supply chain leaves many shops either intimidated of working abroad or prey to excessive fees.

Selling to international buyers can be a daunting experience. Many merchants have horror stories about lost shipments, buyers that decline shipments, shipments stuck in customs, and expensive and untimely returns. This is on top of the cost of international shipping and the normal delivery time-lines that may seem extreme to buyers used to local shipping delivery times.

Let's consider an example scenario: Imagine you're a U.S. seller of wireless home networking products, with a successful online store in the U.S. You've sold a few orders to buyers in the U.K. last year, who found your store mostly by accident. You had some older inventory that local buyers didn't want, so you took the risk of selling overseas figuring that the inventory wasn't worth much sitting in your warehouse. Over the year, you fielded a few dozen orders, most of which got delivered just fine; you did need to answer a few customer calls due to shipping delays, and found the lack of transparency of customs annoying. Problems that did occur: Orders got hung up in customs because the paperwork wasn't right; one buyer wanted to return an order; another order was rejected by the buyer when it reached his door because of a VAT tax bill that accompanied the shipment; and two customers canceled the order before shipping after you clarified shipping prices from your Kansas warehouse to their U.K. home.

The point here is not to dissuade e-tailers from making inroads abroad, but rather highlight opportunities (both in cost-saving and customer satisfaction) in strategically entering a multi-national marketplace. International order fulfillment does not have to mean shipping products one-by-one overseas; sacrificing money and time in the process. Moving inventory into an overseas market like Canada or the UK allows businesses to operate with a local presence and provide local shipping; leading to faster, more competitive shipping prices and delivery times.

If you think you have an opportunity for increased sales overseas, the timing is right because of the exchange rates and help you offset any slowdown in your U.S. sales. The trick is to make the international market operate like your local market. In a nutshell, local product fulfillment and local shipping to "international" buyers. To operate locally overseas requires some basic steps:

• I. Set reasonable goals with limited product numbers.

• II. Prepare ahead. Research products, get business documentation in order, get a fully-functioning and integrated Web site up, and have partners lined up.

• III. Sell internationally but deliver locally. An Internet enabled distribution center (warehouse) will help you respond to buyers like a local e-tailer.

Goal Setting

The first step is not really a step; it is more of a coaching exercise. To get a toehold in an international market you must leverage your established strengths. Look at past sales history and look for products with a deep inventory and the best chance of success in an international market. Don't sell your whole catalog overseas, especially if you have a lot of products. While you are looking at sales history, take a deeper look at those orders you already shipped overseas. How did those customers find you? Are any buyers clustered in a specific region or country? How much did it cost you in time, money and support to complete those orders.

Set up sales and operational goals with the understanding that going international may take longer than expected. It's like planning a trip; you can certainly buy a plane ticket and read a guide book on the plane and have yourself a grand adventure. But you may have had smoother travels if you booked a couple hotels in advance, planned a rough itinerary and talked to friends who had been there before or had active contacts for you to leverage with while traveling. A little patience and planning can go a long way and likely save you a bit of money, avoiding mishaps and last minute costs.

In Part 2 of this installment, I'll talk about the mechanics and documentation of getting product overseas and identifying a local fulfillment house.

Thank you for reading my first blog post on Practical E-commerce.

Nate Gilmore

Shipwire Order Fulfillment

Category: Tools, Tips and Suggestions | Tags: International Selling, Shipping and Fulfillment, Showcase, Product Sourcing