Madison Reed has raised $32.1 million since launching 15 months ago.
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Eliminate the risk
Another advantage to using a third party: Elimination of currency fluctuation risk on both sides of the transaction. WorldPay, for example, processes every transaction within 24 hours and assumes all risk for currency valuation changes, taking the burden off merchants and buyers alike.
As these examples illustrate, global e-retailers take on the added responsibility of providing new levels of information. It is essential that global buyers know what to expect on cost and that they have options.
Shipping provides a case in point. A number of excellent European and Asian sites provide detailed information on shipping, allowing customers to choose the timeframe, and thus the cost, of receiving their order.
It’s not hard for U.S. e-retailers to follow suit. Third party solutions exist to provide consulting services and advice on how to prepare your business for international e-commerce. If you choose to hire a consultant to assist with international trade and export issues, the cost is worth the investment compared to the potential revenue increases that come with opening your business to the worldwide market.
Throughout the world hundreds of small, mid-sized, as well as large enterprises, have taken the first step toward becoming global e-retailing powerhouses.
Take Hong Kong’s Lik-Sang (www.lik-sang.com), an online electronics retailer. The company was founded in 1998 by Nils Ahlswede, who moved from Europe to Hong Kong to be closer to the technology he was selling. From the outset, Ahlswede determined that Lik-Sang would have an international focus, with heavy emphasis on selling to the U.S. and Europe. That meant making multiple language, multi-currency transactions a top priority. “With over 20,000 customers registering in the first year from around the world, it was essential that they could buy the product they wanted as easily as possible,” Ahlswede says.
Lik-Sang serves more than 150,000 subscribers through a multi-lingual site that supports a variety of European and Pacific Rim currencies. “Our prices are set in U.S. dollars, but the immediate conversion allows our shoppers to pay in a currency they understand,” Ahlswede says. “Shoppers select their local currency to view prices, which simplifies the buying process for them.”
Given that the U.S. is the largest market, should U.S. online retailers make the effort to sell abroad? Isn’t the U.S. share of the world pie big enough?
No, because as e-commerce matures it will grow more competitive and sophisticated, not less. Web-based retailers should not count on succeeding by doing business as they did last year or even last month. E-retailers who are in it for the long haul must plan on expanding beyond their borders.
The hurdles to global expansion are low to non-existent. Because any online retailer can play in the global marketplace, each one should. The alternative is less than promising: U.S. e-retailers that don’t rouse themselves to pursue international customers could not only lose the opportunity to go global, but also find their home turf invaded by aggressive offshore competitors who can sell effectively in any currency, including the dollar.
Nick Ogden is CEO of WorldPay, provider of secure, multi-currency global e-commerce transactions solutions. He can be reached at firstname.lastname@example.org