Once businesses scale, entrepreneurs often seek ways to maximize sales by targeting wider audiences. Such ventures can easily lead you to a situation where you are facing an international expansion and flirting with the idea of selling directly to customers from other countries. While it is undoubtedly true that cross-border scaling is the ultimate level of growth, many factors must be considered to handle the expansion correctly. Failing to do so could put your business on the same list where eBay, Best Buy, Groupon, Taco Bell, and many other American corporations found themselves after unsuccessfully pursuing foreign markets.
To gain insight and essential tips, you should always begin the process by communicating with international sales experts. One such individual, who holds a master’s degree in international business and a lengthy track record of prosperous expansions, is Isbert Bermudez. He has dedicated his career to facilitating a smooth transition from domestic operations to global pursuits for companies who are bold enough to target nations around the world.
You Will Need More Payment Methods
The first factor that Mr. Bermudez stresses is one commonly overlooked by smaller companies. It merely guides your business to implement various payment methods before trying to make any international sales. It is because of the way that people purchase things online in certain countries and the level of trust given to their means of payment. For instance, Mexico leads the world in credit card fraud, and it may not be wise to accept online card payments from customers residing there.
Another threat that your business faces are losing buyers because of high third-party fees. Both Visa and MasterCard are known for their “foreign fees” that range from 0.15 to 1 percent of the sales price. Although you may see this cost as marginal, your customer will see it as yet another itemized expense on their checkout page alongside shipping and tax fees. That may make them unwilling to purchase because the initial sales price just went up considerably. Hence why you should integrate payment platforms like PayPal, Stripe, Skrill, and Authorize.Net to your website.
Shipping Costs and Times Will Skyrocket
The next factor is usually a bit more obvious, and most entrepreneurs foresee it. Isbert Bermudez describes it as the curse of long-distance travel that is extremely difficult to overcome. When you are getting into international sales, you are, by default, also entering the international-shipping sphere. The unpreventable byproducts will be higher prices and shipping times.
Fortunately, there is a trade-off that may allow you to put the expenses and delays into context for your customers. In translation, if you want to spend less, you notify the buyers that the delivery will take longer. The same is true of the vice-versa scenario where you will pay more to get items delivered faster via air-travel, per se. Not to mention that you can always pass on the cost of shipping to your customer. If you do so, however, tread lightly because hefty shipping fees are one of the most potent enemies of customer retention rates.
There is an Abundance of Tax Research Ahead of You
It is now time to look at international tax laws. The good news is, there is probably no nation on the planet Earth with a more complex taxation system than the U.S. Also, you only have to look at specific types of taxes that apply to you as an international business. That usually means that you care about sales taxes that have to be charged to your buyers. Luckily, a lot of countries are exempt from these, courtesy of U.S. tax treaties and lack of physical presence, and you might be able to get away with simple calculations related to value-added taxes. If the process becomes overwhelming, remember that you can always hire one of the thousands of CPAs who specialize in this area.
Your Business Should Be Multi-Lingual
You should also know is that your business needs to become language-appropriate for all countries where you want to make sales. Isbert Bermudez sees this as one of the more straightforward steps in the process since most websites are developed on platforms that can integrate other languages in just a few seconds. What gets overlooked, however, is the fact that the spoken word does not immediately make your organization language appropriate. You also need to think about foreign currencies that will be shown instead of dollar figures. If you have buyers from Croatia, for instance, an item selling for $15 will cost them 100 Kunas. Hence why it may be better to minimize the math that they have to do and integrate currency converters.
Finally, you should always keep cultural consciousness in mind. It means that you study the targeted countries to see what type of traditions exist there. Doing so will allow you to side-step a widespread mistake that businesses make when they overstep boundaries due to being culturally insensitive.