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Think global: 5 tips for selling products internationally

Whether you’re selling erasers or carburetors, we can probably guess one of your biggest business concerns: finding and attracting new customers. The good news is that a world of potential customers is out there, just waiting to buy what you’re selling. You just have to think a little more globally.

If you have any doubts that selling internationally is a real opportunity for your business, just look at the numbers: A recent McKinsey study estimates that 1.8 billion people will enter the consuming class by 2025, annually spending $30 trillion or 50% of the world's consumption. And with broadened Internet availability, buyers in developing – and even established – markets will have better access to businesses that sell products online all over the world. Businesses just like yours.

First things first: Put a plan in place

Before you open your doors to the world, you have to put a strategy in place. We’ve outlined five critical areas of planning, so you’ll be well-prepared to give your customer base a major boost.

  1. Find your target markets

    Like any new venture, it pays to do your homework. Your first step is to learn who your international customers are, what they buy, and how they shop.

    Gather market intelligence

    Start by looking at your own data to see from which countries people are already buying your products. Try expanding your reach into these markets, even if only to test selling specific products. You can also leverage research tools available from government agencies like the US Small Business Administration and Export.gov. Both agencies offer free business-planning tools and downloadable templates to help you find the best markets for your products, develop pricing strategies, and more.

    Research demand for your product and local buying trends

    To help inform your target markets, look into the top countries that have strong demand for your product and niche specialty. Is there demand or a gap in the market? Are there specific holidays during which your product might be popular? While you’re at it, try to learn as much as you can about consumers’ spending patterns and from which countries they typically buy. For instance, online shoppers from smaller countries are probably more likely to make international purchases, and they’ll likely spend in larger international markets like the US.

  2. Consider how customers want to pay

    Next, start thinking about how you’ll get paid. This is an important step because checkout is the point at which international shoppers tend to abandon their purchases, which makes sense if you put yourself in their shoes. If you were buying from someone internationally, you’d probably get suspicious if your preferred payment method wasn’t available or if you felt your payment wouldn’t be handled securely.

    Research local buyers’ preferred payment methods

    These vary significantly depending on the country. For example, in the Netherlands, 60% of payments are by direct debit; while in Germany, 46% of payments are by online bank transfer.1 It probably won’t surprise you that most people prefer paying in their local currency. Some payment providers will let you list products in a number of different currencies. If you can’t offer payment in local currency, make sure to give a currency conversion so customers can see what they’re paying.

    Choose a payment provider with a reputation for security

    Look for a payment provider with a strong global reputation. PayPal, for instance, consistently ranks among the top payment methods buyers choose for international payments – because of its security, purchase protection, and ease of use across multiple devices.2 For businesses, we’ll give you access to local funding methods, without the hassle of having to open multiple merchant accounts overseas. You can take payments from 202 countries worldwide in 25 currencies. And it’s already built into the top ecommerce platforms and carts, so setup is easy.

  3. Pay close attention to regulations

    Of course, selling internationally brings a whole new set of rules. Once you’ve decided where you’ll sell, take the time to look into specific rules and regulations for that country. A few key areas to consider:

    Duties and taxes

    The duties and taxes your customer will be required to pay vary by country and product. Make sure you understand the rules that apply to your products so you can let your customers know about any expenses they’re expected to pay from the outset. That’s particularly important for items over $200: If customers are buying the item for personal use, they might be responsible for duties or import taxes. It’s also a good idea to request signature confirmation on purchases over $200.

    Customs

    All your shipments will have to make their way through customs, the agency that regulates shipments entering a country or region, so each package will need a customs form on the outside. Some shipping services will take care of this – do some checking to see if yours does.

    Free-trade agreements

    These agreements are good news for international sellers because they reduce or eliminate tariffs for some products. The US has agreements with 20 countries, and while taking advantage of these agreements might mean more recordkeeping work for you, the savings are worth the extra effort.

  4. Think about shipping and returns

    The best practices you already apply to shipping are even more important when selling internationally.

    Set clear delivery expectations

    International shipping can take longer and cost more for customers, so it’s vital to keep them in the loop. Give accurate delivery estimates based on country and list shipping costs in an easy-to-find place.

    Establish a return policy

    When putting your policy together, consider:

    • Local consumer laws, with which you must comply
    • Refund stipulations, like when you’ll issue them and whether you’ll give store credit or a full refund
    • Any time limits on returns
    • Restocking or return fees you’ll charge

    When deciding on fair shipping and return policies, be sure to calculate your own costs. This shipping calculator can help you determine how much you’ll need to pay to ship to different countries. And your costs for returned items will vary depending on your payment processor. PayPal will refund transaction fees to sellers, but some payment processors won’t, so do some checking to see whether this is a cost you’ll have to account for.

  5. Plan your market entry

    When you sell products online, you have several options for entering the international market, including:

    Starting small on an existing online marketplace

    Established sites like eBay can often give you better reach for lower cost. They allow you to test demand for your products before committing a large sum to re-developing your site. Also, consider other online marketplaces that may be popular in your target market.

    Sarah Davis, owner of Fashionphile, recommends the start-small approach. She started selling on eBay and today does more than $15M in annual revenue, with 30% of her sales coming from international buyers. She advises: “Just sell one item internationally. eBay and PayPal allow you put your toe in the water and get used to [selling internationally], and then amp up from there.”

    Optimizing your current website

    A slightly more advanced option is to optimize your current website for international buyers. You can start by simply highlighting your ability to accept international orders with information on countries served and the shipping costs. Once you have more experience, you can look into listing your products in local currencies for those with a non-US IP address, and maybe eventually install a multi-language toggle for your website.

    Creating a custom website for certain markets

    The most advanced option is to build a website designed to appeal to specific overseas customers. This can include investing in a local domain name. The products and strategies that work in the US may not necessarily work in other countries, so a targeted website gives you full flexibility to test the best presentation of your items. It’s also a chance to optimize for the most popular search engine in the country in which you’re selling. (It might not be Google.)

    If you take this route, just remember to test the experience, so you make sure that elements like text translation, currency conversion, and calculation of delivery costs work correctly.

Your future customers are waiting

Like traveling abroad, selling products online abroad is an adventure we highly recommend. It has the potential to expose your business to new countries, cultures, and most importantly, customers. When you’re ready, visit the PayPal PassPort site for tools and resources that can help you get started. Use the PassPort site and these tips to take your first steps across international borders.

To learn more about expanding your business beyond your borders, download our free ebook, How to sell internationally.