Selling offshore requires proper planning, careful selection of service providers, and a thorough understanding of each new market. But each international market represents a chance to add customers and increase revenue.
Any merchant with an Internet connection today has more opportunities than at any other time in history. Businesses that dont sell internationally are missing opportunities to build their customer base and increase profitability, and this is as true of small and medium businesses as it is of retail giants like Alibaba in China and Amazon in the US.
Most small businesses could make much better use of existing tools to sell overseas. President Obama, in his recent state of the union address, said small US companies need to sell more abroad. Ninety-eight percent of US exporters are small businesses, but most of them sell to just one international market. The potential for expansion is vast.
Study the market carefully before making a move. Because every country has its own consumer habits and business climate, merchants must carefully research each offshore market. Among the issues to consider are customer behavior that affects which products are most popular, which packaging is most attractive, price points, marketing approaches, and customer communication. Also important are costs to enter the market, which may include storage, logistics, taxes, promotions and advertising.
Other issues to consider are local currency acceptance and processing, and merchants should monitor shipping costs and processes, such as tariffs, taxes, delivery times and customs procedures.
Talk in detail with prospective payment service providers. A good PSP can make international expansion easier and more profitable while protecting merchants from fraud and customer service problems.
In order to get the right service at optimal rates, merchants must spell out with prospective payment service providers their industry, current shopping cart solution, markets (both present and future), and transaction volume. Upfront communication can prevent a mismatch between merchant and PSP because not all payment service providers have the technology and partner resources to support every industry. Also, PSPs may have different protocols and fees for merchants with high transaction volumes, and some may enforce transaction volume limits.
Some PSPs operate exclusively within their home countries, while others can easily support merchants offshore expansion plans, including processing payments in local currencies. Merchants that already have a primary shopping cart will find it simplest to choose a PSP whose services will integrate easily with their existing setup.
Merchants should also ask whether the PSP offers customer support for merchants shoppers, and if so, in which markets. PSPs that bundle this service with payment processing can reduce merchants overall costs while increasing customer satisfaction. Built-in customer support can also reduce merchants logistical headaches if offshore markets are several time zones away from headquarters.
Most crucially, merchants should ask every prospective PSP if it provides integrated fraud controls, such as real-time fraud detection services, to streamline the fraud-reduction process and reduce chargebacks. If the PSP serves only as a payment gateway, the merchant will need to invest additional time and money sourcing, purchasing, and integrating fraud-reduction services.
Follow the foundational elements of offshore success. Online merchants that successfully expand offshore have three things in common: they partner with an internationally experienced payment processor that can connect them with offshore acquiring banks and guide them through overseas banks' setup requirements; they give offshore customers a range of payment options; and they also accept payment methods particular to individual markets.
Future-proof your business. Choosing services with future needs in mind is vital for seamless growth because it can be difficult to alter or add processing and business solutions piecemeal later on. An international payment setup that works well now may not serve a business well as it expands into more markets and as payment needs evolve.
For example, if the first processor a company selects handles only domestic transactions, the merchant will likely have to drop that service and start from scratch with a new processor and new systems as it expands internationally. A better option is to start with a payment processor that can handle on- and offshore transactions to support long-range expansion plans.
With thorough market research, long-term expansion planning early on, and the right payment partner, virtually any business can access new markets worldwide.
Kirsty Tull is marketing manager at BillPro.