PayPal’s Tips to Grow Your Business Through Cross-Border Sales
Geographic borders used to represent real divisions between where you could and couldn’t sell your products, but the global online marketplace has made borders a thing of the past. Now, more than ever, consumers around the world are willing to do business with a company that is located in a different country. Recognizing the profit potential, a growing number of e-commerce business owners are diving into cross-border sales to expand their market and revenue.
Interest in cross-border sales is not limited to big companies either. Small business owners are also hopping aboard the trend. With today’s technology, it is easier than ever to sell your products around the globe. Not too long ago, Smart Hustle also decided to help readers interested in cross-border sales with the ultimate list of free resources to help your business sell internationally.
With resources and technology, cross-border selling is accessible to any business owner who wants a piece of the global pie – but it does have its difficulties. These challenges were the focus of a recent PayPal study, titled Cross Border Transactions 2016 Merchant & Consumer Comparison.
PayPal Study Identifies Gaps & Weaknesses in Cross-Border Sales Strategies
The PayPal study included two different surveys. In one survey, they asked approximately 23,000 consumers questions about how they shop online and across borders. In the second survey, they asked 1,200 U.S. merchants about their cross-border sales strategy.
Having input from two groups on the same topic allowed PayPal to compare consumer demand, attitudes, and expectations to what merchants are currently doing in order to showcase gaps and areas of improvement. The following are some of the main discrepancies between online merchant strategies and consumer expectations.
Search Engines as Traffic Sources
Consumers who don’t know about your businesses tend to use search engines to find foreign products and companies. However, only 38 percent of cross-border merchants are using search engine optimization (SEO) and only 14 percent are using search engine marketing. This means that merchants are missing out on international traffic that they could be getting if they used the right search engine techniques.
Third-party marketplaces include familiar sites like Amazon and eBay. Their international platforms make it easy for foreign customers to find your business and consumers also feel safer when making a cross-border transaction. Around two-thirds of online shoppers in other countries prefer to conduct cross-border sales on these trusted websites. However, most U.S. merchants rely on their business website, and only 53 percent have set up shop on a third-party site. Once again, merchants are missing out because they are not accessible on the sites where global consumers want to shop.
Language, Currency, and Payment Options
U.S. merchants may also be neglecting the fact that international buyers may speak a different language, have a different currency, or prefer different payment systems. For example, 21 percent of Canadians speak French, and customers in Brazil (another hot market for U.S. businesses) speak Portuguese. Between 57 and 71 percent of consumers in these countries say they would not feel comfortable buying from a business if the site was not in their local language. However, only 19 percent of US merchants offer languages other than English.
The results were similar when PayPal compared responses regarding payment methods and the currency that products are listed in. Online shoppers overwhelmingly say they would not feel comfortable making a purchase if the prices weren’t listed in local currency and the payment options did not include their preferred method. U.S. merchants have fallen behind by not considering these local preferences.
The study found similar gaps related to other topics, including using mobile-ready websites and including information about shipping, import duties, and taxes shown before checkout.[Tweet “#Bizowners, here are 10 tips from @PayPal on how to grow your #business through cross-border #sales.”]
PayPal’s Tips for Cross-Border Sales
These findings are not meant to discourage business owners who want to expand internationally; however, they do make clear some of the important but often neglected aspects of cross-border sales. To help you out, PayPal has provided these ten tips on how to grow your business through international sales.
1. Look to Canada. Canadians account for 41% of US cross-border sales, by revenue. Maximize this opportunity by appealing to our neighbors up north.
2. Break the Portuguese language barrier. Brazilians account for 5% of US merchants’ sales by revenue, and 26% of Brazilian shoppers expect to increase their cross-border spending in the next year. With no US merchants offering Portuguese and 57% of Brazilian shoppers uncomfortable buying from a site not in their language, it’s time to break this language barrier.
3. Optimize for mobile. Only 54% of US merchants offer a mobile website while 17% don’t optimize for mobile whatsoever. More than 1 in 5 shoppers in Canada, the UK, and Brazil shop via mobile.
4. Offer multiple languages. Among US merchants, 19% offer language(s) other than English on their sites.
5. Invest in SEO. Fewer than 2 in 5 US cross-border merchants use SEO, while most international shoppers find products via search engines. Gain an advantage by investing in smart marketing to win new customers.
6. Close the security gap. Only 12% of US merchants see website security as a cause for cart abandonment. Brazilian and British shoppers cite it as a major reason why they abandon purchases (29% and 26%, respectively)
7. Provide more currency options. Less than half of US merchants offer currencies other than US dollars.
8. Everyone loves free shipping. Everyone. Lofty shipping charges are the #1 reason for cart abandonment, for Canadian, British, and Brazilian shoppers. Conversely, free shipping is a major driver for these shoppers to buy from US businesses.
9. Understand shoppers’ device preferences. An astonishing 66% of US merchants don’t track their shoppers’ device preferences. With mobile commerce growing faster than e-commerce, this is a huge opportunity for US merchants.
10. Be clear about customs & duty fees. Over half of U.S. merchants don’t include taxes and fees in their checkout prices, and 25% have no intention to do that. Ever. Sneaky fees are a major deterrent for over a third of Canadian, British, and Brazilian shoppers alike.
Like any other business decision, it’s important to do your research before you expand into international sales. These tips, plus our free resources will help you make a calculated move to cross-border sales that will vastly increase your market and revenue.