Choose a target country for your product
The purpose of this blog post will be to examine how you should choose which countries to export to. The reason this is important is because all buyers are not created equal. Buyers in Germany and Japan may need your product as we discussed Here and Here. They will want your product for different reasons however. When considering targeting a country, how you market to these buyers is also very important. How you choose a target country?
They like the same product, different reasons
If you are selling a computer to Japanese and German customers for example. How do you market this product to the Japanese customer, and how do you market the computer to the German person? Just as an arbitrary example doing no research into the matter, maybe Japanese consumers will like the computer because it increases efficiency and saves them time when creating products. The Germans may want the computer to reach more people throughout the world. The Germans like the feeling of connection the computer gives them. Again, these were just examples and no research was done on this aspect of the German or Japanese economies. Do not use this example when creating your website because it is invalid. I wanted to simply highlight how different countries prefer the same things for different reasons.
The Small business
I created this blog as a blog specifically for small businesses. This small business blog is dedicated to helping you grow your customer base. When you export products, not only are you helping your bottom line, but you also help the United States trade deficit with that country. When you export to Germany, the trade deficit with Germany is reduced by a certain amount. The United States runs trade deficits with most countries in the world. If we can get a large number of small businesses exporting their products to other countries, we do not have to depend on the multi-nationals to reduce these deficits for us.
The blog is a good tool for people with information to help others without information. I know how to grow small businesses, but I do not have a national platform to do so. Even if I did, the majority of people are interested in what is happening in the economy on a macro sense. I believe that the country will be better as a whole if we can start empowering individuals to export products to other countries. If we can be successful doing this, then jobs will be created as these companies grow.
How can you help ?
You can help out by sharing this blog with others. People may have great ideas that could be businesses. One thing blocking people from starting an online ecommerce store is the fact they think it takes too much time. This is not true because Shopify and Big Commerce have simplified this process as well.
Also Big Commerce:
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Export to Japan:
I wanted to cover a few international markets that you should be exporting to, but you probably aren’t. When we think about exporting American products, the main countries that come to most people’s minds are Canada and Europe. Surprisingly, Mexico is even left off of this list many times. How do I export internationally? I will cover one great opportunity during this post that is often missed. Consider targeting this market when shipping internationally.
Japan is the only Asian country that is part of the G-7. It is the largest foreign investor in the USA over the past several years. The Japanese and Americans have been closely aligned economically over the past 20-30 years. They are the third largest economy in the world. Many Americans study abroad in Japanese universities as well.
Here is a brief infographic depicting their economy:
The Yen and the Dollar are closely tied currencies as well. This is where having I-global on your website will benefit you shipping to Japan. We covered this in our post click Here to find out more. If you don’t have a website set up yet then you will be unable to use I-global. For this, we recommend Shopify to get started on their free trial.
Alternatively you can use Big Commerce who also offers a free trial and works with I-global:
The Middle Class
Japan has a large middle class population that makes $38,000 on average. The Japanese disposable and household consumption represent 60% of GDP. Japanese middle class families have money to spend, and they like to buy American products.
The US commercial services office in Japan is very advanced in its resources because of our close relationship. US commercial services offices offer American businesses information on exporting to international countries. They can set you up with suppliers and distributors as well. Do not worry about the language barrier, a large percentage of the population learns English in school.
Here is a link to the US Commercial Services office in Japan US Commercial Services Office Japan
The Good news for E-commerce from Export.gov:
“Japan’s eCommerce market is one of the largest and fastest growing in the world. According to the latest Ministry of Economy, Trade, and Industry survey, the B2C eCommerce market in Japan in 2014 was estimated at 12.8 trillion Yen ($121.8 billion at 2014 exchange rate of 105.8), a 14.6% annual growth”
Find out how to market your product to Japanese customers by contacting the US commercial services office in Japan. They can give you advice on what will work for your product or if it will work at all. They are an aging population, so if you are tied to the health care industry in any way, you should be focusing on this market specifically.
Contact us at Info@escapeamazon.com if you have any questions. I have direct contacts with I-global representative and UPS account executives. Let me know if you want to know who your representative is.
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Export.gov Helps You Expand
At Export.gov the United States Government has provided a great resource for you to discover how to ship internationally. Sign Up here. The government gives you access to this information with this log in. In this site there are country specific guides that provide you research for up to 125 countries. Click the picture to be taken to these guides.
This E-commerce guide directs you through the basics of building an efficient E-commerce site. There are a number of resources within this guide that can be very helpful to you. I don’t know of any other government on the planet that provides its business with this kind of data. Before you get started on the e-commerce guide, you will need to start your e-commerce store. We recommend Shopify or Big Commerce to get started.
Both of these sites offer Free Trials for you to get started!
The e-commerce guide is here, click on this picture to learn more:
Why Would you not use it?
With this information there is no reason for you to limit yourself to the domestic markets of the United States. As we have highlighted before, there is 70% of the world’s buying power outside of the United States.
Identify countries that might want your product. If people within the United States are interested in your product, then what other countries will be interested in what you are selling? How does the SEO effect your site in other countries?
Think about the people who you are selling to in other countries, try to empathize with what they see when they view your website. Based on what you read in the country specific guides on export.gov, is your site easy to use for the foreign buyers? If not, then I recommend reading the last post. Our last post discussed a company known as I global and UPS. UPS is an international partner with Export.gov. We explained how you can use these two companies to optimize your website for international buyers.
Do The Research
If you are going to be successful in foreign markets, then you will need to do the research. You can’t throw up a website and hope buyers show up. The days of “build it and they will come” are over. This phrase is especially obsolete when it comes to the world of e-commerce. If you aren’t showing up on the first page of the search engine in the countries you are targeting, then like Google in the USA, you can expect that buyers will not find you.
Expand Your Sales to International Markets
I look at many e-commerce websites on a daily basis. A number of these websites based in the United States indicate that they do not sell internationally for a number of reasons. If you don’t sell your product on an international level, then you are missing out on 70% of the world’s buying power. The international market is open to US businesses. The US commercial services website has great reasons to ship internationally:
Is It Complicated?
I would say that this reason comes up more than any other. People think international shipments are complicated. It is hard to know what form to fill out when, they are worried about fraud or they don’t know how much to charge due to duties and taxes. This is what I hear, but the reality is that it isn’t complicated at all.
According to the export.gov website there were 9.2 million Canadians that purchased at least one item from an e-commerce store based in the United States. Canadians are the simplest market to sell to if you are in the United States because they already buy from the USA online. This means that they are aware of the charges. With NAFTA in place, often times the charges to ship to Canada are less than what it would be if you were selling else where in the world. If you aren’t shipping internationally, I challenge you to start with Canada to test out international shipping. This will allow you to see how easy it actually is.
An important decision when selling to international markets is the shipping carrier you work with. Obviously initially you are thinking to yourself that the cheapest carrier is the one you go with because this will get you the most sales. On that note I will compare the cheapest option which is the USPS at the moment. I will compare the USPS with shipping internationally with UPS.
Shipping internationally UPS vs USPS
The basics are that UPS is more expensive than USPS. Does this mean you should choose USPS immediately? That depends on a number of things. Let us work with the assumption that UPS is three times as expensive as USPS. If it costs $25 to ship the package with USPS then it costs $75 to ship it with UPS. In this example we are talking about shipping over seas because UPS does have a ground service to Canada that is more cost effective. Honestly, if you are shipping to Canada after the examples I give you shouldn’t have any reason to use USPS when going to Canada.
Issue #1 Tracking
When it comes to tracking who is better at this internationally? The USPS does not offer door to door tracking to all locations. This list tells you what countries door to door tracking is available to:
Countries on the left door to door is available.
Countries that support E-DelCon Service
E-DelCon Service was temporarily suspended
|Great Britain and Northern Ireland|
A separate list is available for Priority packages:
Countries that support ECOMPRO Service
|Georgia, Republic of|
For more information on this go to this link: USPS international shipping door to door
USPS limits door to door tracking availability to the countries listed above. This means when you sell a product to a customer who is in a country that is not listed, the customer can say they never received it whether they actually received it or not.
Most market places like Ebay or Etsy will required you show a tracking number showing that the package was actually delivered. If you cannot prove this then they will reward a refund to the buyer automatically. In these cases you have to refund the buyer their money or ship them out a new product. In either case you have lost money on the transaction. If you ship another you have to eat two shipping costs now, plus two product costs, not to mention time and labor dealing with the situation. If your Product costs you $50 to make, and you sell it for $100. Then you have lost $50 in product cost, plus $25 in shipping with the USPS. The second time you send the product to that country where USPS doesn’t provide door to door tracking it is likely you will choose another carrier, so let’s assume you chose UPS, now you have to pay $75 to make sure that the product gets there since UPS offers door to door tracking to every country it delivers to.
Your costs are at $125 now a -$75 ROI for the transaction.
This assumes that the buyer paid the original shipping costs of $25 from the USPS. This doesn’t include the $50 in product cost that you lose because you could have sold the replacement product for $100 to someone else had the first one arrived safe and sound. This doesn’t account for the negative reviews you may get because of the time it took to complete this transaction. Negative reviews hurt businesses in ways that cannot be calculated. If someone posts a negative review on facebook to their friends, and they have 10,000 friends in that country, then you have decreased the chances of getting a re-order from that country in the future. If the same buyer had a positive experience, and they post a positive review, then you have increased your chances. This is why positive engagements are so important.
UPS is a single carrier network
UPS is a single carrier network meaning that the UPS driver that picks up your domestic ground and air packages also picks up your International shipments. Even Fed-ex has two different drivers for domestic ground and Air/International shipments. This means that UPS will be the only company handling your package from door to door, even internationally! The USPS hands their packages off to the post office of the destination country. You can imagine that different countries have invested different amounts in their postal system. Let’s say you are shipping to a country that you wouldn’t travel to because you wouldn’t feel safe. Is it wise to ship a product with your brand tied to it to the same country without the protection of an American company like UPS? Are you willing to put your reputation in the hands of a postal system operating in a foreign country?
Canada is different because a $25 package with the USPS may cost $27 with the UPS ground service. The same information applies as the above example, but the UPS ground service is less expensive than shipping an international package over seas.
To Be continued
There is much more to discuss on international shipping via your e-commerce site. I will continue this in a series throughout this week. You will see a new category to the right titled international e-commerce. Click there to see the series in whole, once it is completed.
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Where in the world are your customers?
When you think about selling online, something you need to consider is where your customers are located in the world. The difference in demographics of each country leads to a difference in buying preference as well. This image below comes from the UPS pulse of the online shopper for the USA:
Some takeaways from the USA infographic above:
- 47% of USA shoppers prefer to make a purchase online.
- 81% View free shipping as the most important option when checking out online.
Nothing is Free
Shipping will never be free for the seller. You should build the shipping price into the product you are selling, so you can advertise free shipping on your website. This will help decrease shopping cart abandonment because it reduces the guessing game buyers have to play when they are making their buying decision. If they are on your site looking at an item that costs $15. If you advertise free shipping, then the buyer will not have to guess at what they think the shipping cost is going to be before they make their buying decision.
Selling online in Mexico
Mexico is similar to the USA in that 40% like to make purchases online. 80% use smartphones. Returns are important to buyers in Mexico more than any other region. Do you have a clear return policy listed on your site?
Start your store free at:
81% of people in Mexico are satisfied with the online shopping experience, but they prefer to buy in store. These stats are changing every year. I would expect more buyers in the online space moving forward.
Selling online to Europeans
76% percent of Europeans view free shipping as their most important option. If you are a store based in the USA, this might be difficult for you to offer due to duties and taxes that go along with the expensive shipping costs.
I recommend using UPS to ship internationally due to their door to door tracking that the USPS cannot offer to some countries.
Things to consider when shipping internationally
When you think about shipping internationally I know the USPS is less expensive than UPS. UPS offers door to door tracking. USPS cannot offer this to all countries they service. If your package cannot be tracked to the destination, then your buyer can easily claim that they didn’t get the shipment.
If you are selling on an online market place like Etsy or Amazon. You must provide a tracking number that indicates delivery. If you cannot provide this because you shipped USPS then you must give your buyer the money back without knowing whether or not they really did get it. If you have to ship them another item, you just doubled your cost on shipping and the product. In these cases, it would have been better for you to ship it with a reliable carrier in the first place.
UPS also has guaranteed times when shipping internationally where USPS cannot always guarantee the delivery date. Access points internationally are another thing that UPS offers. When you ship to another country, UPS has points set up where packages can be delivered if you don’t want it delivered to the buyers house, you can have them pick it up at a local access point. This is usually a local UPS store or grocery store in the area near by the residence you are shipping to. Since you are not in that country, this is a great option to use to make sure that your buyer will get the package. As always, Contact us with any questions.