The idea of selling internationally is not something new. Look back through history from the days of the Silk Road and all the way through to today’s online marketplaces.
International trade is a true cornerstone of economies in virtually every country around the world, and has only grown in our current age of the internet. To date, e-commerce retail accounts for roughly 16% of total global retail sales – a number that continues to rise every year.
It’s also important to mention that e-commerce has increased in popularity in large part due to the rapid spread of smartphone technology. As of 2020 more than 3 billion people around the world have a smartphone, giving each and every one of them the ability to be a customer on the move.
As these trends continue to gain pace, the opportunities for e-commerce businesses to profit from selling internationally also increase. Below we’ll discuss the big ideas behind selling international in more detail – join us as we circumnavigate the world of global e-commerce!
How to be profitable when selling internationally online
We hope we don’t burst your bubble when we say that there’s no secret formula to building a profitable online business through selling internationally.
That said, these 5 steps can absolutely help you optimize your e-commerce business for international e-commerce! If you’re ready to put in the effort, you’ll be pleased with the results you get from following these strategies:
- Choose the right platform
- Choose the right product
- Optimize shipping costs
- Know which taxes to pay
- Consider dropshipping
1. Choose the right platform
If you have a hard time telling which e-commerce platform is best for selling internationally, you’re not alone. After all, there are certainly more than enough of them to choose from. We assessed the range of options, and came down to this list of the top 3 e-commerce platforms for selling internationally:
Amazon has its very own program called Amazon Global Selling which, as you may have already guessed, allows e-commerce businesses to list and sell their products in 13 different countries all around the world.
To begin selling internationally on Amazon, you’ll need to either register for a seller’s account for each country you’re interested in – or register for a seller’s account in the North American or EU marketplaces where you’ll get access to sell throughout all of the countries that are in those respective marketplaces.
Here’s a full list of countries included in the Amazon Global Selling program:
- United States
- United Kingdom
- United Arab Emirates
Advantages of selling internationally on Amazon:
- Fulfillment by Amazon makes shipping and delivery easy
- Amazon provides services to understand international tax regulations
- Amazon accepts many currencies, and merchants are paid in their local currency
Founded in 1995, eBay is still running strong more than 25 years later. While it doesn’t quite reach the heights that Amazon has, in 2019 more than 180 million people worldwide made purchases through eBay. With an audience of that size, there’s no denying the potential for you to earn a profit by selling internationally on eBay.
If you’re not entirely sure if you want to start selling internationally on eBay, that’s no problem. You can sell your items through the ‘basic international selling’ option which essentially takes your local listings and publishes them to international markets. On one hand, it allows you to quickly get involved in selling internationally online. On the other hand, it can limit your exposure in the search results for those other countries.
If you’re ready to take a bigger step into the international marketplace, you can opt for ‘advanced international selling’ through eBay, which creates listings in local languages and has them appear in default search results (so they can’t be filtered out as ‘international’ listings).
Shopify is a bit different than other e-commerce platforms when it comes to selling internationally. Unlike Amazon and eBay, selling internationally on Shopify doesn’t require any ‘special access’ through Shopify’s network.
As long as you have a Shopify store, you can share the link to your store with anyone anywhere in the world and they can [technically] make a purchase from you. In that aspect, it’s easier to sell to other countries through your Shopify website.
In other ways, it can be more difficult. Shopify doesn’t provide translations or currency conversions automatically. Nor does it have a service to promote your store in search results. There’s also sometimes a lack of payment or fulfillment options through Shopify for certain countries.
All of those obstacles are yours to address – but luckily there’s a great perk to selling through Shopify, which provides you with solutions for nearly every difficulty you encounter along the way: the Shopify app store.
Top tip: BeProfit – Profit Tracker is one of the most useful Shopify apps that you can use to improve your store’s profitability when selling internationally. BeProfit makes it easy to track the costs you pay for all of the different apps and services that you’ll use to maintain your international sales.
Get the most accurate profit margin calculations and track all of your expenses, including shipping, production, marketing, and everything in between. BeProfit is data made simple – get the app today!
Just like any type of #business, it takes real effort to be a successful #dropshipper - but with a projected CAGR of nearly 30% between 2019 and 2025, the global #dropshipping sector is showing good signs for anyone involved. Click To Tweet
2. Choose the right product
The internet has no shortage of self-proclaimed experts who say they know what the best products are to sell online. We’re not here to do that. The truth is, there’s no one-size-fits-all answer, and the same is true for selling online internationally – don’t be fooled by ‘gurus’ who claim to have easy answers to complex questions.
Instead, you can follow the simple steps we list below to help determine which products are more (or less) likely to sell successfully in international marketplaces. Is this a guaranteed way to find the perfect product? Probably not. But it’s a great way to get started in the right direction and, of course, you’ll learn as you try new products.
a. Research local restrictions to make sure you’re not designing a business plan around a product that’s illegal to sell in other countries. Laws vary from country to country (and state to state) – you definitely don’t want to gloss over those details or you may find yourself in a sticky situation. Taxes are another very important topic you’ll need to study up on before committing to selling internationally online.
b. Check what sort of demand different products have in other countries you’re considering selling in. Data from around the world show that the most popular product categories include fashion, toys, electronics, personal care, and appliances. Consider these top high profit margin products to sell while you’re at it.
c. Make sure you can actually handle the orders you receive. Have you found the right merchant service providers or mobile payment systems to service different countries? What are the best shipping options for the countries you intend on selling in? Are you able to provide an enjoyable e-commerce consumer journey or will there be a language barrier that gets in the way?
3. Optimize shipping costs
The opportunities to sell internationally might be more numerous than selling domestically, but that benefit comes at a cost. While the statistics can vary widely from business to business, some studies have found that shipping costs can account for roughly 20% of an e-commerce store’s budget.
When you factor in the hiked-up rates of shipping internationally, there’s no doubt that you should be doing everything in your power to reduce your shipping costs. Here are a few ways you do that:
- Use cheaper packaging materials
- Provide different shipping methods
- Bundle items together
- Include shipping in the customer’s cost
- Shop for better shipping rates
4. Know which taxes to pay
There are a number of different taxes that come into play when discussing selling internationally. International taxes to consider when selling online to different countries include:
- Import duties
- Sales tax
- And so on
The question still remains: which of those taxes should you expect to pay?
Generally speaking, the answer depends on what is called the de minimis value for the country you’re shipping to. The de minimis value is a threshold that a package value must cross in order for import duties and taxes to apply. Depending on whether or not a package value exceeds the de minimis threshold, it would be labeled either DDU or DDP shipment.
DDU (delivered duty unpaid) Incoterm payments apply when you (the seller) pay for the expenses related to the delivery, but the import duties and local taxes are left for the customer (recipient) to pay upon receiving the package.
DDP (delivered duty paid) Incoterm payments, on the other hand, apply when you (the seller) pay for all expenses related to the delivery as well as import duties, local taxes, and any other shipping costs. Oftentimes the customer still pays for the import duties and local taxes, but makes those payments when the initial purchase is made (and not upon delivery as is the case with DDU shipments).
5. Consider dropshipping
Dropshipping is an e-commerce model that drastically reduces the overhead costs associated with running a business and places the merchant’s main focus on marketing and customer service. There’s no need to purchase stock, keep inventory, or deal with the packing, shipping, and handling of packages – making it a particularly relevant model for selling internationally.
Of course, just like any type of business, it takes real effort to be a successful dropshipper – but with a projected CAGR of nearly 30% between 2019 and 2025, there’s no doubt that the global dropshipping sector is showing good signs for anyone involved.
Follow these steps to get started as a dropshipper:
- Choose what to sell
- See what competitors are doing
- Find a supplier
- Create a website (find out how to make money dropshipping on Shopify)
- Develop an e-commerce advertising plan
- Sell, track, optimize, repeat
Go abroad with your online business
Before the introduction of the internet and e-commerce, selling internationally was something that relatively few people were able to do. With modern technology, though, taking your business to new countries has never been easier – though still takes some serious dedication to be good at!
With the guidelines and tips we’ve outlined above, you have a firm footing from which you can really begin to expand your online business into the international marketplace. Pack your bags because you’re about to go global!