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Discovering the New World of Cross-Border E-Commerce

When Christopher Columbus returned from his first voyage to the Americas he was met with some dismissive criticism.  Some suggested his accomplishment wasn’t all that impressive and that the discovery of the Americas was inevitable.  Upon his return, legend has it that he entertained dignitaries at a fancy dinner by requesting that everyone be given an egg.  As the story goes, he then challenged them to make it stand up on its end.  Some tried, others didn’t, but they all failed to accomplish the task. 

Then Columbus took his egg and gently crushed one end on the table, causing it to stand upright.   Before he showed them how to do it the exercise was deemed impossible.  Once he showed them how , they all could follow.

Image by Pexels from Pixabay

Image by Pexels from Pixabay

For many small- and medium-sized online U.S. merchants, cross-border ecommerce can seem like Columbus’ egg.  Assuming that a merchant figures out everything they need to satisfy an international consumer, the added complexity of selling to them strips away any margin on the product – essentially making international sales unprofitable.  This leaves online retailers in the U.S. like the guests at Columbus’ feast; some have tried selling cross-border and it didn’t go so good, while others haven’t even made the attempt. Either way, it feels impossible.

But, giving up isn’t an option. According to Accenture, the pace at which people around the world are gaining access to the internet for the first time is growing so quickly that by 2020 there will be three times the number of online shoppers outside the U.S. as there are inside.  The growth trend suggests that, within another three years, it will be four times the number of U.S. online shoppers.  This makes the message to U.S. merchants clear: If you want to sell to this exploding online global population, you’ve got to get that egg to stand up!

Successfully selling to international consumers requires answers to two fundamental questions: First, what do international shoppers want? Second, how can you profitably provide it to them?  For the first question, it turns out there are a few things that domestic merchants may not even be aware of which make the online purchase process extremely difficult for an international shopper.  For the second question, actually accommodating the needs of those customers can increase both fixed and variable costs on things that domestic buyers don’t require.

According to UPS’ Pulse of the Online Shopper study, there are a few reasons that someone may buy goods from another country:  They can’t find the brand/quality they want locally; the goods they want just aren’t available locally; or the price is simply better internationally.  Where one or more of these criteria are met by a U.S. online merchant you can almost guarantee a healthy share of international traffic to their website. 

Here’s what they’re looking for:

  • Affordable shipping . First and foremost, they want an affordable shipping option, but they don’t want it to move at the speed of the Niña, Pinta, or Santa Maria, either.  Offer quick and affordable shipping or watch your potential sale vanish.
  • Comprehensive pricing . They want to know what the total landed cost is (including duties and taxes) before they buy. Shoppers will flee if the total cost jumps at the very end of the deal.
  • Familiar payment options . They want to use their preferred payment methods, which may not always be Visa, MasterCard or American Express.  They want to see the prices in their own currency.  They also want to know the returns policy.

For those retailers who’ve experimented with cross-border and have been burned, they have their own requirements before going down that road again.  Fraud prevention has become a leading concern for sellers.  Depending on product margin, it could take many successful transactions to overcome a single fraudulent order – making fraud management a critical part of every single shipment.

How do small and medium sized businesses manage this?  How can they possibly give the shoppers what they want in the buying experience, cover their own needs, and still afford to sell internationally?  The answer is as simple as Columbus’ egg: scalable processes and effective technology.

Most SMBs will need to look for a partner that already has these things perfected.  UPS, for example, has the solutions to help companies stand the cross-border ecommerce egg up – but it doesn’t have to be UPS.  Now there are solutions providers entering this space rapidly who are eager to help U.S. online retailers discover the new world of cross-border ecommerce.

1 comment on “Discovering the New World of Cross-Border E-Commerce

  1. MelBrandle
    June 13, 2019

    It is interesting to read of how commerce first started on a large scale. Every industry has its own solutions to provide to its fleet of customers but if they fail to come up with any at the very start of their supply chain, their business will faill to bloom. Businesses need to know exactly what they are catering to and find the means to accommodate to those demands. Failing to do so would only mean their slow and gradual failure.

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