The Challenges of International e-Commerce and their Solutions

International TradeThe journey from first having an idea for an ecommerce business to its first international sale will be unique to you, the challenges these sales will bring you, however, will be common to many early stage and established businesses. If you do not predict, understand and resolve those issues then any international sales you receive could simply be a drain on resources, reducing your bottom line at a time when costs are likely to already be a concern.

This post aims to detail the issues you are likely to face selling abroad and what you can to do turn them to your advantage.

Getting Delivery Charges Right
Thinking about the fulfilment issue initially, we have seen many e-commerce companies place all of their focus on getting their domestic delivery charges accurate. They often offer a variety of service levels and charges with Saturday and even Sunday deliveries being made available. However, when it comes to the list of available countries that their e-commerce software offers as delivery destinations website administrators are often unwilling to spend some time optimising the rates.

If you use Shopify (or any eCommerce software) then your shipping rates page will likely look something like this:

International Shipping Rates

Essentially you will set every international destination at a given rate – regardless of order value or weight. You are only likely to configure a country’s exact shipping rates when you get a sale from that location. This is most certainly the wrong way of doing it. ‘Sod’s Law’ states that the first sale in each country will be a large one that means that your guestimated shipping rate will be way off the mark and you are likely to lose out on the shipping costs, or losing customers because you have pitched too high.

An example would be that this site has set the shipping rate for Belgium to be £15 for any order from 0g to 100kg. If a customer added 0.75kg of product to their cart they would be met with a shipping and handling charge of £15 when the actual cost would be much closer to £7. At 24kg your costs would be in the region of £13 with our DPD account or over 50kg then the rates would be much higher. You’re hoping that you’ve hit the ‘sweet spot’ of shipping costs low enough to encourage sales, but not too low that you lose money.

When you enquire about our services we will work with you to understand your current and probably international shipping profile and help you establish the correct rates for European and worldwide sales.

Customs Laws and Prohibitions
Another significant challenge to online retailers is importing prohibited items. Certain items such as Foods will require you to create a Prior Notice with the FDA whilst India doesn’t allow you to send gender prediction kits, Brazil places specific requirements on textiles and Nicaragua doesn’t allow the importation of radio or telephone equipment. It may not be realistic to check each destination country’s restrictions, but if you know your market place and know that a particular country may not accept your products then switch them off as a destination in your shopping cart. You should also make sure that you don’t have a default ‘worldwide shipping’ option that customers may be offered if their specific country doesn’t have a specific rate assigned.

Increased Fraud Risk?
If you use Shopify they conduct a risk analysis on each transaction by looking at if the registered billing address matches the delivery address as well as if the transaction was placed in the same country as the delivery address. They don’t always get it right, however, as can be seen by this order which had a ‘charge back’.

Fraudulent Transaction

The payment gateway, Stripe, notified the retailer 3 days after the product was despatched that the transaction was likely to be fraudulent and the chargeback occurred two months later. For international orders you may want to consider your position on dispatching orders automatically or manually.

You should also consider your ecommerce provider’s recommendations:

as well as your payment provider:

Returns Policies
Offering international returns can be a minefield especially when you consider legal jurisdiction as well as the logistics. Whether you refund people or offer them a credit is something worth considering, so too is the process of managing and validating a customer complaint relating to the specific nature of the complaint if you consider they could have a grievance for a number of reasons.

Multiple Currencies
Seeing as many credit cards in foreign countries charge noticeable conversion fees when transacting in foreign currencies and that any additional charges surely will reduce the conversion rates of your site then you may want to explore ways to offer multiple currencies – without making your product pages and cart more complicated for domestic users. Shopify has a manual configuration that allows you to offer an alternative currency, the issue remains, however, that you will need to confirm with your payment gateway how they handle currencies and the ability to switch between them.

Another issue to consider is that if you use any of the options to show local currencies then if you convert from your nice round: £19.95 or £23.99 to USD then it may appear as $33.88 or $40.74. If this matters to you, then it may be worth considering a more in-depth solution.

And it doesn’t stop there
Many foreign consumers prefer to transact in different ways. Those in Nordic countries prefer to pay cash on delivery according to eConsultancy. They also state that German consumers prefer ELV or direct debit. Other nations will have their own unique profile relating to preferred transaction methods, as such it would be worthwhile exploring this if you are actively targeting certain countries.

Separate Geo-targeted Websites
Another option would be to create separate sites to target local markets. This solution is fraught with issues – not least taking SEO into consideration. Before you embark on this solution consider this help page from Google regarding the tag hreflang and this one related to country targeting. Furthermore, Moz has this useful checklist.

If you are targeting English language countries such as USA, Canada, Australia, South Africa etc., then you will still have to pay attention to the intricacies of the local language and customs, but the content writing aspect should be a great deal easier than translating into completely different languages.

Google does use subtle hints as well as the more obvious ones about the local focus of websites, so it is worth considering.

Local Competition
There is a world of difference between passively accepting international sales and actively working towards obtaining them. If you are determined to increase international sales then it is vital that you consider the competition. Due your analysis on where they get links, which keywords drive traffic, which pages attract the most user engagement and which products sell the most (often you can order product lists by most popular).

Take one country at a time and establish if you need to amend product descriptions on your main site, perhaps with some additional text in the local language to usefully offer local suitability information, import rules, etc. You will have much greater scope to attract international sales if you either create separate sections in the local languages, or by using separate sites.

Whether you go to the effort of translating your interaction emails such as order confirmation, despatch etc., is an interesting debate to have. How you fit that in with hosted shopping carts, open source carts or bespoke systems will be interesting.

Again the distinction between passively and actively seeking international orders is played out when you consider your marketing methods. Not only would you need to consider international SEO, but also use of social media, link building, media buying and the like. You would need to think about your capabilities to do this with your current resources, would you need to expand your team or use locally-based consultants?

If you feel that international expansion is a reasonable strategy to expand your customer base and increase revenues then you should plan every aspect in reasonable detail. The SEO aspects can be daunting, but getting them wrong can have consequences on your domestic SEO performance.

Passively selling abroad is obviously much easier, but you still have to make sure you comply with the legal and local and foreign customs rules. You will also have to make sure that your shipping rates are suitable and the concerns over returns etc.