Selling internationally? How are you handling cross-border payments?
Guest Post by Lucy Marshall, World First.
Retail as we know it is rapidly developing as more and more products are bought online rather than in-store. Internet Retailer is calling for online sales projections to triple in 2017, and eCommerce still only makes up for 10% of overall commerce. With this increased growth, more sellers are expanding beyond borders to find less saturated markets and taking advantage of exchange rates. The opportunity to sell globally? Massive.
Sellers have been taking advantage of the global eCommerce marketplaces for years, and we are now seeing more and more private label brands and resellers become market leaders. Brands like Anker manage their own eCommerce storefronts and are relatively unknown in the brick and mortar space. But by optimizing their listings and expanding their brand across multiple channels they’ve become a titan on global marketplaces. On Amazon, the UK/EU are collectively the same size as the Amazon.com market. In China, it’s projected that more than a quarter of the population will be shopping for foreign products on eCommerce platforms. For those of you counting at home, that’s roughly 455 million potential customers.
Opening your business to new markets means learning how to navigate cross border payments, transactions, and how to bring your international sales home effectively. Not to mention you will have to pay VAT, the equivalent of sales tax in the UK / EU, to the international governments in which you’re selling. You need an effective strategy in place to manage all of your different currencies, tax payments, and supplier payments to protect your margin selling globally.
So what do you do? Setting up in country bank accounts requires an entity in that country, and the process to set it up can be lengthy and costly. And the exchange rates may not be competitive. While most marketplaces have a currency solution, you have zero control over when to move your funds and no transparency as to what rate they’re being traded.
Take Brexit, for example. We saw the rates move 10% in a matter of hours, and those using a marketplace solution were at the mercy of the markets. Those who were working with a solution like World First were able to work with their relationship managers to protect themselves against market movement. By booking forward contracts or setting rate alerts they were able to move their funds back home at a rate they budgeted for. By giving our customers the ability to control their money, we were able to save hundreds of thousands of dollars for our customers.
As global eCommerce becomes more accessible to sellers, it’s becoming easier to make cross border distribution a reality for your business. The only consistency in the currency market is that it fluctuates. While you may never be able to predict which way the market is going to move, World First can help you protect your margins and grow your business globally. We see with our new sellers that there’s an opportunity to grow your business by 5-10% in the first year, and then reinvest the profits in your business to promote continued growth in the international space.
World First USA Inc. can help you pay suppliers, vendors, and taxes overseas. We can set you up with local receiving accounts in the countries where you’re selling, allowing you to collect funds in the local currency and take control of when your funds are transferred. The marketplace transfers your earnings to your in-country account and you can transfer your funds back home. We’d love to help you take hold of the global markets. Register here to get started.