Use Cases
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Selling your digital product internationally is a huge opportunity to expand your business. It’s easy to deliver digital products to customers abroad, but acquiring international customers and scaling a successful global business requires paying attention to other aspects of ecommerce you probably have overlooked until now.
Let’s go over a few of the most common mistakes when selling internationally.
1. Not performing due diligence on tax collection.
Oh taxes, they’re hard enough to understand in your own country, right? Nevertheless, selling online means dealing with taxes in lots of different localities. Make sure you’re paying attention to the regulations in all the countries where your customers are located. The rules around sales tax or Value Added Tax (VAT) are usually different for digital products. In the U.S., digital tax laws vary by state, and figuring out whether you’re required to collect sales tax in a given state can be a delicate dance. If you’re located outside the U.S. you may be required to collect sales taxes in states where you have a certain level of revenue or number of transactions. If you’re selling internationally to the European Union, it’s a bit more straightforward: VAT applies to all imported products sold to EU citizens. However, the VAT rate varies by EU country. Make sure you do your research to set up a solution that will allow you to comply with tax regulations in the different countries where you’ll be doing business.
2. Not offering payment methods preferred by international customers.
It’s easy to fall into the trap of assuming that everyone always likes to use the same four major credit cards, but if you want to sell your product in certain countries you must offer the payment methods popular in that market, or else risk losing out on sales. Certain countries prefer online bank wire transfers, others checks or money orders, and still others are embracing different digital wallets, like PayPal or Amazon Payments. For example, in Germany, Giropay makes up 26% of all online payment services used, while in Asia-Pacific, bank wire transfers are the most common online payment method. Offering your customer’s preferred payment methods will make them more likely to purchase, and purchase with confidence.
3. Leaving the currency conversion to the customer.
This aspect of global online sales is frequently overlooked. For customers, it’s incredibly frustrating to see a price listed in a currency that they don’t use. It forces them to look up exchange rates and then do a calculation! That’s the opposite of a seamless shopping experience. Global sellers should also consider a price localization strategy. Localized pricing considers the purchasing power of your target market’s economic situation. If your SaaS product is disproportionately expensive – or inexpensive – compared to other products in their country, your product becomes less attractive.
4. Not localizing your ecommerce experience.
Language is not only how you communicate with your customers, but it’s also how you build trust. Trust is an essential component of any online shopping experience. According to a report from the Common Sense Advisory, more than half (55%) of consumers only make purchases at websites where information is in their own language. It might not always be feasible to localize your product, but global sellers should make an effort to translate product information as well as the ecommerce flow
5. Ignoring local competition.
If you’re targeting an international market where a local competitor already exists, are you at a disadvantage? Possibly. Do your homework and make sure that you’re not investing marketing spend in a country where a competitor has a hometown advantage. They could be smaller – or inferior – but have greater awareness in that country. It doesn’t mean you can’t compete, but it does mean you might have to adjust your strategy accordingly
Successful ecommerce means putting the customer’s needs first, but when that customer is located in one or more countries, you’ve got change your perspective and pay new attention to these details and more. Make sure your international marketing efforts pay off by avoiding these common mistakes.
