The path to becoming an international brand can be challenging, especially for small and medium-sized online retailers. Barriers to selling internationally include: language difficulties, hurdles with customers, and the cost of shipping.
In an analysis of Shippo’s 2018 customer data, we found that more than 8,000 businesses (27 percent of our customers) leveraged Shippo to export from the U.S. to one or more countries. To compare, in 2015, fewer than two percent of our customer base was selling internationally to one or more countries. Now, 12 percent are shipping to three or more countries, while eight percent are shipping to five or more countries.
Although we’ve seen the exponential growth of customers going global on our platform, less than five percent of U.S. small businesses overall are exporting, according to estimates from the International Trade Administration.
As selling internationally becomes easier than ever, there’s no reason SMB e-commerce businesses can’t sell to global customers just like the major retailers do. Here’s how three direct-to-consumer online businesses (and Shippo customers) talk about the technological challenges and their overall global successes.
Communication is the Golden Key
When it comes to international product returns, the biggest concern for San Francisco-based shoe company, Bryr Studio, is getting the sizing right. Back-and-forth communication for returns and exchanges for the hand-crafted, made-to-order clogs can be a huge time sink for her small staff. But the pros far outweigh the cons.
“Our international community is excellent and many brands in our category ship worldwide. To not do so would be a missed opportunity,” says Jenny Houser, operations manager at the six-year-old company.
Its customer service team works hard to ensure customers are getting the right fit from the get-go. They also encourage customers to reach out with questions. In an effort to reduce costs, international orders are the final sale (whereas domestic customers may exchange). This means managing communication from top to bottom to set customers up for success.
Selling Internationally Requires New Information
Luckyleo Dancewear, an Arizona-based apparel company, sees the rise of e-commerce and shipping tech as a perfect combination to help their business grow internationally. They decided they would be a global company since day one, and have since expanded to serve customers in more than 50 countries.
The company has been successful overseas due to a continuous search for information and knowledge. “If you just keep researching, all of the understanding starts falling into place, and the payoff is that you then you have the whole world as your oyster-client-base,” said Karen Saari, co-owner and administrator at Luckyleo.
When shipping internationally, packages will be subject to local customs regulations and duty and tax charges. These duties and taxes are calculated based on both the type and value of the item being shipped. Luckyleo stays on top of country-specific tax rules to keep their customer base wide.
Get Smart with Shipping
Mini Materials, which provides model-sized cinder blocks and building materials to hobbyists around the world, is less worried about costly shipping fees. They are based in Florida.
“Given the small size and light weight of the products, the shipping fees weren’t overbearing for most international customers,” said Erik Polumbo, co-owner of the online shop.
While Mini Materials has products selected carefully for e-commerce, not all businesses fit into the “small and light” category. It’s just as important to consider what types of packaging are available to your business to minimize weight or look for free options, such as select boxes and envelopes provided by the USPS.
Having a global customer base may be a goal for many U.S. companies. Finding the right technology options to automate processes can be one large piece of the puzzle. The right tools and tech can ease the burden of e-commerce businesses trying to grow internationally.
This insight was originally published in my Inc. column. I was also a recent panelist at the World Trade Organization Public Forum 2018. We chatted about global trade and you can read an excerpt from that discussion with Jack Ma here.