E-commerce is one of these sectors of business that is just perfect for cross-border sales. Because the majority of processes and marketing campaigns happen online, expanding your offer to customers living in Germany, Great Britain, or Norway is just a matter of well-thought-out customer service, marketing, and logistics. And speaking of logistics, when it comes to cross-border expansion, a fulfillment center can really come in handy. These external logistics companies provide a comprehensive outsourcing service concerning all logistics processes. How can such a company help you with conquering foreign markets?
The broadly understood e-commerce industry works pretty much alike worldwide. You have a website with an online store, an offer (which, in essence, is a list of products and categories), and a possibility to place an order online. It’s a secondary question whether your store offers products in Poland, Germany, or France. Obviously, this does not mean that every single eCommerce business has got what it takes to start cross-border sales immediately. There are several conditions that must be met along the way.
The decision to direct your offer to foreign customers cannot be made lightly. You have to devise a well-thought-out strategy that's backed up by thorough research, primarily regarding the preferences, needs, and habits of new customers. It may turn out that a product that's popular in one country will not find a sufficient group of potential buyers in another.
That's just the beginning, though. Secondly, you have to think about legal regulations, chiefly concerning processing personal data, communicating with customers, and returns. It's all slightly easier within the European Union because the vast majority of regulations are unified. However, no matter where you're planning to expand your business, find out as much as possible about your new market before you enter it.
Most likely, language and customer service issues is the biggest challenge related to selling abroad. Common sense as well as market research indicate that customers do shopping more eagerly when a store is available in their language version. For instance, eCommerce Report: Germany 2019 states that as much as 55% of surveyed customers said that they wouldn’t feel comfortable buying in a foreign store that does not offer the German language version.
Therefore, if you want your cross-border expansion to succeed, you have to take care of the new language version of your website as well as customer service. Customers frequently have additional questions, and the possibility of asking them in their native language (and receiving answers in the same language) improves UX, which maximizes your chances of closing the deal.
The next thing you ought to remember is logistics. When it comes to logistics services, the rule of thumb is that the longer journey your parcel has to travel, the pricier its shipping will be. This means that an online store in the United States most likely won't be able to offer attractive shipping fees to Europe. Keep that in mind, as customers don't want to overpay for shipping nor wait several days to get their order.
This is where the logistics outsourcing model saves the day. In this model, everything logistics-related is outsourced to an external fulfillment company. They deal with storing, picking, packing, and shipping parcels. It’s a logistics model where a 3PL (third-party logistics) company fulfills orders on your behalf. But what does it have to do with cross-border sales?
Maybe a few words about this model first. Suppose you run an online store that grows exponentially. Every month, you have more and more customers. On the one hand, that’s brilliant! On the other, there’s a lot of work to do every day. Now, you have two options:
You can either hire more people who will work in your warehouse or start cooperation with a logistics partner that will ship your orders for you. Fulfillment centers offer their own warehouses, where they provide storing space sufficient for each client.
Moreover, 3PL companies deal with:
In short, we can say that logistics companies handle the offline part of logistics in e-commerce.
If you want to find out more about fulfillment centers, we invite you to read the linked article.
Here, we ought to mention several elements:
1. First of all, since fulfillment centers ship thousands of products each month, they can offer very attractive shipping fees. For you, as an eCommerce business owner, this means that you can also offer attractive shipping conditions for your customers, even if they live abroad.
2. Secondly, fulfillment companies have vast experience in shipping products. Their teams know how to work effectively, and their warehouses are filled with advanced technologies that automate and facilitate everyday work. As a result, you can send more parcels, regardless of where they are sent.
3. Thirdly, fulfillment centers are prepared to handle thousands of orders each day. If you decide to conquer another country, you don’t have to worry about handling all these additional orders coming from the foreign market.
4. Fourthly, the largest logistics companies already operate in the whole of Europe and even the world. They have all the procedures figured out so that you don't have to worry about them. You instantly get a ready-made solution.
Furthermore, the most advanced 3PL companies comprehensively help their clients with taxes and customs (e.g., VAT UE). The benefit is apparent: You don’t have to worry about taxes and procedures related to shipping products to a foreign country. Instead, you can focus on sales and marketing, but that’s a story for another time.
When is the fulfillment service profitable?
Although the model we discuss in this post is beneficial, you have to realize that it’s not a universal solution for every store. Many of them (especially small and new ones) consider this service an unwanted complication. That’s why fulfillment companies typically offer their services to stores that ship about 1,000 parcels per month.
Naturally, it’s not a fixed value, but that’s the level that usually suggests your store is continually growing and is ready for cross-border expansion. For such large stores, fulfillment is not a complication but a much more substantial facilitation of work.
Although cross-border expansion is a significant milestone in the development of every store, it’s also a huge challenge. Thankfully, the sector itself is expansion friendly. To sell your products on foreign markets with success, you have to take care of:
Thorough research (before you make this decision)
Customer service and marketing in the new language version
In that latter question, you might find fulfillment for eCommerce handy. If you want to find out more, visit Omnipack.io. Omnipack experts will happily answer all of your questions and assist you in selecting the best logistics service that’s tailored to your needs and plans.