When you’re in the process of taking your products to new foreign markets with your eCommerce, the challenges can be very complex. It’s important to ask yourself what the main issues are in exporting your products abroad, and how you can offer a smooth experience to your new customers. Whether marketing online or via a local marketplace, we need to be aware of a number of specificities.
Preparation is key
Preparing an export strategy and validating the steps you need to take before entering export markets can help you avoid surprises and save you time and energy. Since each country has its own set of rules, you need to study each market methodically before taking any marketing steps.
Starting by offering our products online can be a strategy that minimizes risk and initial investment. Indeed, many online platforms offer simple, inexpensive tools for setting up international shipping and payment options in a matter of minutes. Also, many countries or regions impose a minimum order value, known as de minimis, before customs duties and import taxes are applied, which can be interesting if products shipped to these territories do not exceed these amounts.
If we wish to go further in our approach, or if we realize that the volume of demand in the new market where economies of scale could be made by sending inventory directly to the territory, then other aspects will have to be considered. It’s also possible that we’ll decide to do business with local distributors, which brings similar challenges. Indeed, when sending goods for sale in large quantities to another country, there are many other crucial aspects to consider.
Here’s an overview of the 8 most important topics to consider before embarking on an online export project
1. Certifications and regulations
Harmonized System (HS) codes, rules of origin, certificate of origin or sanitary certificate, export declaration, quality management program: these are all terms you should be familiar with when you become an exporter.
What are the requirements for exporting your products? Where do you start? Before you start exporting, you need to find out about and comply with established standards and regulations, which vary according to the product to be exported and the market you’re targeting.
2. Marking and labeling
When it comes to marking and labeling, compliance with regulatory requirements is mandatory. These differ from country to country – including specifications on label size, language, information to be displayed and requirements for Nutrition Facts tables (where applicable). The consequences of non-compliance can result in significant penalties for the company.
Note that if you choose to sell to a new market via marketplaces such as Amazon or using distributors, there may be additional regulations concerning your product labels and packaging.
3. Customs compliance and clearance
Customs documentation can be quite complex, and exporters must comply with the customs compliance regulations required in the country of export.
A customs broker is an essential partner in facilitating the process, but ultimately, your company is legally responsible for customs clearance when exporting goods. It’s important to choose a customs broker or forwarder with whom you feel comfortable working as a team.
“The role of the customs broker is to facilitate transactions and the international movement of goods by acting on your behalf. They are both professional agents and advisors with essential expertise in the field of importing and exporting”.
Katy Gélinas, Business Intelligence Strategist – Carrefour Québec International
On your eCommerce platform, it’s important to be transparent about any customs fees that may apply to your customers. As discussed above, once the de minimis amounts have been exceeded, import fees may be applied to the order. The addition of extra charges at checkout is a major irritant that can greatly harm your conversion rate. Also, not informing your customers that they will have to pay import fees when they receive their order can discourage them from recommending your site in the future.
4. Transport logistics and warehousing
Controlling your supply chain is essential to your success. Does your product require temperature-controlled transport, by pallet or container? Do you have a 3PL (Third Party Logistics) partner in the territory who can accommodate your special requests and offer economies of scale on shipping prices?
Your logistics organization will depend largely on the nature of your products. Transport and operating costs can have a major impact on your selling price. Take the time to choose reliable partners who can support you in this process and in your growth.
It may also be a good idea to make a limited selection of products available for your new target market, so as to limit the complexities of transport and warehousing. Most eCommerce platforms allow you to display a specific catalog according to the user’s location.
5. Free trade agreements
To qualify for tariff exemption, specific documents are required for countries with free trade agreements in place. Find out what is required to avoid surprises. When planning your export strategy, be sure to consider such agreements when choosing your target markets, and bear in mind that they may change over time.
6. Sales contracts and Incoterms
This aspect is important when selling your products to a distributor. Incoterms define when the goods pass from the charge of the seller to that of the buyer. Make sure you negotiate the right term with your partner and indicate it on all your export documents. Whether you’re selling to a distributor or a customer-user, clearly display your delivery policies and purchasing conditions on your eCommerce site.
Get in touch with professionals who can advise you on the legal aspects and review your sales contracts and policies.
“When a customer places an order on your website, there’s no question about it. The parcel must arrive on their doorstep or at a depot close to their home (e.g. Mondial Relay in Europe). The DDP incoterm commits you to assume all legal and fiscal responsibilities in the country of dispatch. In some cases, this may require the company to take out new tax management or more costly civil liability insurance. It’s important to do the due diligence that goes with investing in energy-intensive market development.
Your sales contract becomes your purchasing conditions and delivery policies in eCommerce. Be clear and transparent with your customers to avoid any unpleasant surprises.”.
Clara Dubernard, Export Commissioner – Innov & Export PME
7. Risk management, exchange rates and insurance
Do you need to open a bank account in US dollars? Do you need a foreign exchange contract to protect you against market fluctuations? Should you consider credit insurance or a letter of credit to protect your accounts receivable?
Are you prepared to manage the sales terms negotiated with your local distributor and the level of risk involved? Are you familiar with the tax aspects of exporting your products? Take the time to choose your partners carefully and negotiate the right terms to suit your capabilities. Check out the resources and products available to you in terms of cash flow protection and management.
Talk to your banking institution to discuss risk management solutions.
Most eCommerce CMS (website management systems) support currency and exchange rate conversion. Shopify, for example, has a feature that enables currency conversion at the time of transaction. The exchange rate used is always the rate in effect at the time of the transaction or refund. For greater transparency, you can also display details of how the price of each product is calculated for each market.
8. Customized marketing and communication strategy
Every market has its own language and culture. Your marketing and promotional strategies don’t simply have to be translated, they have to be adapted. For example, you might want to run a campaign for Saint-Jean Baptiste Day on June 24 only in Quebec, and an Independence Day campaign on July 4 only in the United States.
In 2022, Shopify launched the Translate & Adapt application to manage content and languages for all target markets. Bilingualism can be a technological hassle, so it’s important to work with experts who have mastered the concept. The more your strategy is tailored to your target market, the more effective it will be.
“Every culture has its nuances. Don’t just translate, adapt. Find the right discussion to have with your prospects where they’re at in their thinking, and the right emotion to convey to truly touch the heart of your market”.
Jean-Sébastien Lussier, International Trade and Marketing Advisor – Développement PME
“Adaptation must also be based on the purchasing and Web use practices of different markets. In France, where credit card ownership is lower, you’ll want to offer payment alternatives like Paypal. In China, ideally, your website will talk about you first and your product second, and the reverse in other countries. In short, the more personalized your strategy is for your target market, the more successful it will be”.
Gabrielle Ouellet-Duval, Digital Strategist and Assistant International Commissioner – Serdex International
Bonus: Avoid pitfalls by building a network of professionals
Avoid embarking on an export project without doing your homework. Make sure you’re well informed, and surround yourself with allies who will support you in your export project.
Make sure you surround yourself with the best legal, tax, logistical and technological advisors.