Deciding whether or not to start selling cross border should be a straightforward decision. It can only make sense to expand your potential customer base by hundreds of millions. That being said, there are a lot of aspects to take into account when deciding to pursue cross border trade more actively.
Firstly there are the legal and license questions. Are you legally allowed to sell your products abroad? In most cases the answer to this will be yes, but there are some restrictions and there are some hoops to jump through in certain countries. As a simple rule of thumb, most of the time you can sell items that do not pose risks to the buyer and the buyer can easily see what they’ve received, e.g. clothing, car parts, toys.
Where it can be more challenging is with items that include “ingredients” instead of materials, such as cosmetics or food stuffs. Selling cosmetics into Japan for example requires each item is tested to ensure it contains what it says it contains. Also if your items are inherently risky, such as weapons, alcohol or pharmaceuticals there are also often restrictions.
With licensing the question is more about whether you are allowed to sell your products abroad by your supplier or in some cases the brand. In some instances one or more of your suppliers may themselves only be allowed to sell to retailers who sell domestically, and a supplier in other countries are serviced to distribute locally. Today though, with the advent of eCommerce, this is less prevalent but is still often an issue.
Brands will sometimes also place restrictions on where their products can be sold from and to, preferring to manage international themselves and avoiding price differences between countries. Some brands will also have restrictions on the type of platform you can sell their products on. Even now there are a few brands who don’t like to be sold on Amazon or eBay for example.
Actually there are very few retailers who will not be able to do some cross border. Even in those cases outlined above there are restrictions but you are able to sell into most countries if you follow the rules. Then it’s more of a cost benefit analysis that needs to be carried out when you understand what you need to do.
It’s also likely that not all of your products have restriction. If you sell cosmetics this can cause extra steps to be taken but you almost certainly also sell accessories of some kind, like brushes and bags, too, which you can get selling straight away.
Beyond what you are allowed to sell there’s the question around whether it’s the right time to concentrate on CBT. We will delve into this topic in more detail throughout this guide but I would question whether it ever makes sense not to think more globally when planning your business. Even if you have plenty to get on with focusing on your domestic business you should have an eye on what needs to be done cross border to ensure you’re not missing a potentially even larger opportunity.
For example, with something as basic as shipping it’s important to set the right shipping fees internationally. That way you won’t be stopping buyers from buying if they do come across your products. Maybe in one country they just can’t find what you’re selling and your products are in great demand. If you don’t ship or you’ve just added a shipping amount which is restrictive, you’ll never know you have that opportunity.
If you’re domestic competition is challenging your margins or your sales in total, then CBT is a sensible next step to manage your competitiveness and ensure you have other outlets where you’re selling in less competitive markets; where perhaps you can even make more sales or more margin.
Building CBT into your core offering will put you ahead of your competitors who will often add CBT and international as an after thought. Consumers in all countries prefer to be treated like you want their business rather than making it difficult for them. This means taking international customers into account even if you’re not actively thinking about focusing on CBT.
In summary; there are very few retail businesses for who cross border trade won’t be right. Having the knowledge about best practices and practical ways of taking international buyers it into account will be valuable whether or not you are looking to actively open new countries right now.