As the world becomes ever more interconnected, the global e-commerce market has seen sizable growth in recent years. There’s no surprise that this trend will continue to grow in the future. In fact, a few experts suggest that going global is now a necessity in order to keep up with growing demand and competition. In this article, we will discuss how businesses can make the shift to international trade, and why they may want to do so. For those interested in this topic, make sure to keep reading to find out more.
Difference been international and domestic trade
So, what is the difference between international and domestic trade? Well, as its name suggests, international trade involves trading between buyers and sellers from various different countries, whilst domestic trade involves buyers and sellers located in the same country. As such, domestic tends to be less complicated than international trade, because a business only needs to follow one set of laws and guidelines – that of their country. However, international trade necessitates businesses to adhere to the rules and regulations of multiple jurisdictions.
That being said, while it is more complicated to wrap your head around international trade, it does have more opportunities than domestic trade. It helps to open sellers up to a larger potential pool of buyers and customers, which can help to potentially increase their bottom line.
Reasons you should trade internationally
So, why should you make the switch to international trade? Is it not enough to just trade domestically? If you are doing well domestically, then is it worth it to take the risk and expand? Most experts would say yes. Here are a few specific reasons why you should make the switch.
Reach new buyers
By exploring new markets, a brand will then be exposed to new customers. That alone is a major advantage for any business, as having a larger potential pool of customers is one way to keep it competitive in the market. In fact, by increasing its possible consumers, a business can increase its clientele even if they maintain the same conversion rate, which is always a boon to any business.
Explore new markets
One great thing about e-commerce is that it allows for greater accessibility. It not only allows consumers to purchase items from anywhere around the world but also allows sellers to reach new markets easily. While exporting is slightly more complicated, selling products online lets businesses connect with buyers around the world without needing to physically set up a shop in another location. It also opens doors to new partnerships, connections, and more.
Take advantage of global e-commerce rise
Not surprisingly, the global e-commerce industry is currently booming and is expected to rise to US $6.17 trillion by 2023. This is mainly the result of the global COVID-19 pandemic, which forced people to stay at home. As such, with nowhere else to shop but online, it expedited the growth of e-commerce in general. Two years ago, data showed that only 17.8% of sales were made online, but in 2023, the number is expected to reach 20.8%. This has resulted in more opportunities for business around the world, which means now is a fantastic time to start exploring international trade.
Tips to expand internationally
Here are a few suggestions that businesses should keep in mind if they are thinking about transitioning from domestic to international trade.
Learn the global landscape
The first thing that you want to do before you actually make the switch is to study the global e-commerce landscape. You should take the time to find out how businesses use e-commerce in your particular industry, in addition to how certain markets and sectors interact and influence one another. Additionally, you should study how similar companies have transitioned globally, so you know what to do, and certain mistakes to avoid. If you are worried about doing everything yourself, now is a fantastic time to check out any consultants or freelancers that can potentially help to guide you through this process.
Determine target market
Once you have a general idea of how the global landscape operates, you will have to determine who your target audience is. You will want to consider what country or countries to target based on the resources available to you, what your business is offering, or whether a particular country will give you a competitive advantage. For instance, if you have a specific tie to a certain country aside from the country you are based in, you may consider entering that market. An example is that an Australian brand might find it easier to enter either the UK or the US market, considering most of the population in either region speak English.
Review local and importing requirements
Most countries will have their own unique set of guidelines when it comes to trading internationally. This means depending on where you are based, you will likely need certain licenses or certifications in order to sell things overseas. You will also need to review requirements when it comes to importing certain goods to your destination country, too. Some of this information can be found either in your local government department, or in your target country’s trade department, consulate, or embassy.
Explore logistics options
Of course, considering logistics when it comes to international trade is a huge deal. This is because shipping methods can differ, especially if you are transporting goods overseas. First, you will have to think about whether you want to transport your products either by air, land, or sea freight. Aside from that, you’ll want to consider whether you are choosing LCL or FCL shipping. FCL shipping – otherwise known as full container load — is where you pay for an entire full container to only carry your shipment exclusively. While LCL (less than container loads) is where you have to share the space with other people’s goods. Each shipping method comes with its own unique advantages and disadvantages, so be sure to think it through carefully and pick the one that makes the most sense for your business.