If you have an online business, the world is your oyster. While there are pros and cons when it comes to selling overseas, there are some clear advantages at the moment, as Chris Barling of Actinic explains
Amid the gloom of problems in the Euro zone, the need to reduce our own deficit and continuing banking issues, the one bright spot has been the recent performance of UK manufacturing. This has been driven by the drop in sterling, but this doesn’t just apply to the guys that make things. Web stores can benefit too, as most costs have fallen relative to overseas competitors.
The good news is that much of the expertise that you use to get UK visitors to check out your site can be re-used for the international market. In particular, skills in search engine optimisation (SEO) and pay-per-click advertising (PPC) can also be applied to attract visitors from abroad.
- Firstly, the UK is still a respected country around the world, so it’s worth flying the flag and making it clear that you’re based here.
- You should charge VAT to EU consumers (if your goods are VATable) but non-EU customers, including the US, don’t get charged this tax. Usually, it’s as simple as that. The rules are a bit more complex if you are selling to EU businesses, or if your sales into the EU are over the VAT limit for the country.
- There’s no issue with payment as when a buyer pays by card the payment card provider sorts out the exchange so you gets pounds but a local currency charge shows on the customer’s statement. No changes are needed to your store although an indicative price in euros and dollars is a good idea. Or maybe add a currency conversion calculator.
- Shipping abroad is pretty straight forward too. Many ecommerce merchants do it without problems. It’s easier with a recognised international carrier such as UPS, Fedex or DHL, as these can advise on any issues. Make sure you fill out a customs declaration, and as long as your product is legal in the country that you’re selling it to, this should not pose a problem. As for customs or import duties, most retailers leave these to the purchaser. Your customer is responsible for charges, so you can ignore them. However, do be sure to state this explicitly in your terms and conditions.
- The biggest risk when selling overseas is probably fraud as orders from abroad are more likely to be from scamsters, simply because it’s easier to get away with it. Generally the police are not interested in small-scale fraud, and even less so when the crime is committed outside their jurisdiction. In addition, many of the fraud prevention systems such as address checking don’t work with overseas cards. Depending on your products, it is just possible that fraud will be such a problem with overseas orders that you just shouldn’t accept them.
- Finally there are a number of aspects of currency risk. The first is that if the original motivation for exporting is the decline of sterling, further crises in the euro zone or the US may suddenly erode this competitive advantage. If you have chosen to actually price in euros or dollars, rather than only accept sterling, then there is a currency risk on prices if you don’t dynamically recalculate them every time you display your store page.
- Although the emphasis up until now has been on how easy it is to sell overseas, there are differences, and once you begin to see some success, focusing on these differences will grow sales further. With the drop in sterling providing the opportunity, surely it’s time to give it a try.