Online shopping has become massive all over the world, and entrepreneurs starting out in this trend should know a couple of things before venturing into the international market.
With globalization on the rise, the world has become more populated yet significantly smaller at the same time. What we mean by this can be explained through a simple analogy that’s easy to understand for everyone.
- Around 220 A.D., porcelain from China would travel for over a year on the Silk Road to reach potential buyers in Europe.
- In the 1800s, a European merchant ship with tea would travel for a whole month across the ocean to reach the Americas.
- Today, it only takes a week to bring a cargo load of t-shirts from Asia to the USA using airplanes.
As for digital goods, people can buy these in an instant. Platforms like Steam, Netflix, and Spotify, among others, are great examples. A few years ago, you had to wait until the physical media copy arrived in the post or until the slow internet would allow you to download it. Now everything digital is readily available.
Naturally, entrepreneurs have to adapt if they want international success. Because of this, we will discuss today why having support for multiple currencies is crucial for an e-commerce business.
Keep the Shopper’s Interest
If you’re dealing with an international market, almost every country will use a different currency.
For example, many states that are currently part of the E.U. still use their national banknotes to shop everywhere. Exchange rates can also affect a buyer’s decision dramatically, so keep that in mind when implementing multiple payment methods.
Shoppers prefer websites that instantly convert prices into their domestic currency–the most appealing being the ones that also take into account that day’s exchange rate. If you manage to do the same on your website, you’re guaranteed to increase the chances of selling to an international customer by more than 75%.
However, you have to be aware of something when choosing this route. The values of all currencies fluctuate constantly. Because of this instability, the exact moment of purchase determines whether you’ll make a higher profit or if the customer gets a more decent price. Therefore, you should be aware that your profit margin will vary significantly when choosing this route.
Choose Multiple Payment Methods
If you want to take payments from around the world, it is also important to research what payment methods are the most popular in a given area.
For instance, PayPal is the number one choice for many Americans, but not so much for Europeans. You’ll want to have a number of different payment providers to cover the needs of as many individuals as possible that might visit your online store.
Most payment providers today offer great plans for entrepreneurs with an e-commerce platform. In many cases, you won’t even need to pay a consistent fee, but rather pay a percentage of all the transactions made through the processor. Depending on how big or small your offerings are, it is up to you to decide if a fixed or flexible plan is right for you.
The Legal Issue
One more thing you should be aware of when building an e-commerce website is the legality of products, licenses, currencies, and other variables in the countries where you plan on selling.
For example, not all video games found on Steam, PlayStation Store, or the Microsoft Store will activate in all countries. This is because some regions have stricter digital entertainment laws.
The same principle applies to just about everything. Make sure to get a team of professional lawyers to study the legal situation in each of your targeted countries. This way, you’ll prevent having lawsuits made against you and other unpleasant surprises.
The Bottom Line
Opening your shop’s door to more people will inevitably lead to greater profits and higher search engine ranks as long as you offer people the convenience they desire.
If you only plan on selling in a single country, however, you’re best off just offering everything in the region’s language, currency, etc. With all that said, we wish you good luck on your next venture!
