- E-commerce defined - Your company’s readiness - Steps to going Online
Global web use is booming, and millions of new buyers of products are logging on each year. Electronic commerce, especially Business-to-Consumer (B2C) e-commerce, reflects this growth. E-commerce is buying and selling online through the Internet. The Internet’s global reach thus provides a cost-effective means for marketing products and services overseas. The e-commerce transaction is completed through an electronic network featuring computer systems—the vendor’s, a web host’s, and the buyer’s—all of which are linked to the Internet. E-commerce can help small- and medium-sized businesses seeking new outlets. It can also help reduce costs associated with international marketing.
There are several ways to use websites to further exports:
- Transactional websites conduct end-to-end sales transactions, allowing customers to search for, order, and pay for products online and to contact the company for after-sales service. The most sophisticated websites create efficiencies by integrating the transaction process with back-office systems such as accounting, inventory, service, and sales. - Informational websites generate sales by promoting corporate awareness rather than facilitating online transactions. They are ideal for companies that market products and services that cannot be provided online or goods that cannot be sold online. - E-Marketplaces bring buyers and sellers together to facilitate transactions. Their types can include auctions, virtual malls, and matching services. Some make bulk purchases from suppliers and arrange all logistics themselves.
No matter what approach you choose, market development is always an essential ingredient and must be an integral part of your company’s e-business presence on the Internet. Advertising online can be an extension and a component of your corporate growth strategies.
There are a number of steps you might take to make your web presence more effective in international markets, including:
- Having web addresses and/or domain names localized for target markets, such as having them written in language-specific script. - Taking steps to gain visibility on local search engines. - Choosing local web hosts. - Localizing and internationalizing your website content. - Including currency converters or pricing in local currencies. - Using metric measurements. - Providing information on duties and taxes assessed in key markets.
You may have to deal with several issues in executing orders and providing after-sales service overseas. Payment modes and terms may differ, with methods such as use of credit cards, account-to-account transfers, person-to-person transfers, and escrow services proving less or more feasible than in the domestic market. Shipping and pricing of goods purchased over the Internet is generally the same as with goods purchased by other means, except for digital products that are downloaded. Still, these may be different than they are domestically. Chapter 12 has more information about shipping, and Chapter 13 has more about pricing, quotations, and terms. Customer service may likewise differ significantly. You should consider the need for things like localized FAQs, an online order-tracking interface, clearly-posted contact information, and personalized responses to customer inquiries.
Handling taxation correctly is as important with online sales as with brick-and-mortar businesses. There may be some taxation differences between digitally vs. physically delivered goods, often depending on whether you have a physical presence in a given country. This area is evolving rapidly, so it’s particularly important to keep on top of developments.
Several further factors may require additional attention when you’re conducting e-commerce overseas, including:
You can, of course, sell exclusively through third-party e-commerce platforms, such as eBay, Amazon, Alibaba, and others. You can use their payment systems and shipping and logistics services. Third-party platforms all provide web-based tools to help you manage sales and costs.
Or you can experiment with a combination of channels: multiple distributors, your own e-commerce site, and third-party e-commerce sites. Over time, the sales figures will help you determine which options provide the best benefit for your company.
This chapter’s Success Story is NuStep, which makes exercise machines suitable for people with health conditions that make exercise challenging. NuStep turned to the U.S. Commercial Service for help in, among other things, finding potential overseas distributors. Although NuStep has been exporting for only four years, it already sells in 25 countries, with international sales accounting for 15 percent of total revenue.
These links updated: 4/23/18. This website has been funded in part by the U.S. Commercial Service. Copyright (c) All Rights Reserved by the District Export Council of Georgia. Image: shutterstock_1069133606.