When many businesses are first starting, the idea of global marketing is usually thought of as a positive goal to reach for.
The thought of expanding to markets around the world sounds like an excellent way to expand a business, however this is not always the best business move for every company, due to the many laws and shipping regulations that surround sending products overseas.
There are a number of ways a company can evaluate their ability to sell their product abroad, as well as a number of ways they can be successful in doing so should they choose to go global.
There are two major questions that should be asked before choosing to expand to a global market:
- What is the demand for the product overseas?
- What taxes and shipping costs should be accounted for when shipping to other countries?
It’s important for any company looking to expand to understand the demand for their product in other cultures. Some products that may be very useful in one country may have little use in another. If customers in global markets do not want the product, there is no use in expanding globally, as it will not result in a better bottom line as a result.
If a company has recognized that they do have a potentially profitable market in other countries around the world, there are a number of ways they can cut down on costs to distribute their product:
- Work with local distributors.
- Offer only limited products to international markets.
- Use local marketplaces to gauge interest and sales numbers.
When companies work with local distributors in other countries, they can save immensely on shipping costs and import taxes.
In addition, offering only a small selection of products can help to ensure that profits are being made. While it may be profitable to sell a certain item overseas, it may not be the same for smaller products with the same shipping costs. It’s advised to offer only a limited number of products to international markets in order to cut costs.
One way to know which products are in demand specifically is to start selling on local marketplaces, such as local eBay equivalents (such as Rakuten or Taobao). When products are sold here, businesses can get a realistic idea of what’s in demand overseas and what isn’t.
Once the overseas market has been identified, there are many other questions that must be answered. It’s important that companies understand what kind of local and import taxes they will be dealing with, and they must understand how foreign currency and prices translate from those in a business’s home country. Miscalculating taxes, shipping costs, and currency conversion rates can be detrimental to any company looking to expand to foreign markets.
With currency conversion in mind, it’s important to offer customer-friendly options for payment, as some countries may not have access to certain payment options that are common in other parts of the world. Offer a wide array of payment options that will appeal to a large, international market. Including PayPal as a payment option is usually an effective way to ensure that people around the world can pay for their order.
One way to avoid any payment issues is to launch a localized site that is written in the language of its intended audience, with payment options that will work well for them.
Language can also be taken into account with packaging, as instructions in English will do little to help a buyer that only speaks Japanese. Products should include any safety information in the customer’s native language as to prevent any accidents from happening, and in many cases there are laws that make this absolutely necessary.
Finally, it’s very important to be on the lookout for fraud. It’s not uncommon for companies to purchase large orders, only to resell them at a higher price to local markets. Be sure to have a highly-trained customer service team in order to address any such issues, as well as issues with the products themselves. If an increasing number of complaints begin to come through, there may be knockoff products circulating as a result of fraud, which should be shut down if possible.