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Maximize the Upside of Cross-Border E-Commerce and Minimize the Risk


Maximize the Upside of Cross-Border E-Commerce and Minimize the Risk

Global e-commerce is booming, and this provides internet retailers with a unique opportunity: According to international shipper DHL, reaching out to an international audience can increase sales by 10 to 15%. And yet, cross-border e-commerce isn’t without risks.

Although the potential upside – expanding your business and generating more sales – is enticing, it’s likely that you have some questions and reservations about selling your products globally.

Here, we break down the benefits of selling internationally, along with tips and best practices for mitigating your risks and safeguarding your profits.

The Value of Cross-Border E-Commerce

By 2020, the cross-border market is expected to reach a whopping $900 billion in gross merchandise value – translating to roughly 22% of all e-commerce sales.

One of the biggest advantages for online retailers selling internationally is that cross-border purchases tend to be larger than average. Approximately 20% of these orders are over $200 USD and provide a high profit potential for e-commerce retailers.

Where are these online shoppers located?

  • 60% of these high-value purchases originate in the United States, United Kingdom and China
  • 40% of the purchases primarily come from consumers in Western Europe, India and Singapore.

Fashion and electronics are the dominant product categories for cross-border shopping, but there’s an opportunity for businesses in other industries as well. In DHL’s survey, more than a quarter of respondents in the beauty and cosmetics, food and beverage, pet care and sporting goods categories felt their share of cross-border transactions would grow faster than average.

Cross-border e-commerce is also beneficial for consumers, including product availability, a more attractive offering (including price), and trust.

Challenges of Selling Your Products Internationally

Embracing cross-border e-commerce can be a smart business decision, but it often presents several challenges in the early stages. Since every international market is different, it’s important to understand the issues you may face.

Some challenges or barriers merchants may encounter when selling internationally include:

  • Gaining the trust of customers in different countries
  • Customers’ expectations regarding shipping costs and delivery times
  • Economic and regulatory climate that impedes or restricts international business
  • Elevated risk of credit card fraud in certain markets
  • Evolving payment method preferences, such as money transfers or cash on delivery instead of credit cards
  • Country or region-specific policies and legislation regarding product sales or data protection
  • Legal limitations to selling certain types of products, such as food, alcohol and antiques

Making the decision to start selling your products internationally shouldn’t be made lightly. However, by doing your research ahead of time and understanding the potential barriers, you’ll be far more prepared to handle challenges as they arise. 

How to Succeed with Cross-Border E-Commerce

When breaking into any new market, the first place to focus is on building trust. Particularly, when you’re an international seller, consumers may have reservations about buying from you.

As many as 19% of consumers state they don’t trust foreign shops, 18% worry about problems with customer service and 14% are concerned about paying in a foreign currency. Building trust across an international audience is not an easy task, but being transparent about pricing, payments, shipping costs, delivery times and your return policy is the right place to start.

Global e-commerce represents a growing opportunity for online retailers. If you’ve been considering selling your products internationally, it’s worthwhile to partner with a trusted professional who can help you implement the right payment processing and fraud protection solution.

To learn how ClearSale can help you expand into cross-border e-commerce and help protect your business from international fraud, contact us today.

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