The acquisition will add more than 300 products to L’Oreal’s lineup.
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Another critical step to selecting vendors in foreign markets is ensuring they are operating within the laws of the country. “You can’t assume anything,” says Brian Carpizo, CEO at e-commerce platform vendor Junction Solutions, which has operations in Canada, Mexico and the United Kingdom. “Every country has a whole set of business laws, so you need to have good legal representation in those countries to help you navigate all the different rules. You can’t underestimate the differences in the countries and their rules about foreigners holding operations in those countries.”
Tune in to the culture
A good resource for any retailer looking to do business in a foreign market is that country’s consulate, Carpizo says. “They’re used to working on some of these issues,” he says. “It’s a first good way to understand what the administrative/legal climate is.”
Retailers also should make sure that the management of the vendor they hire speaks fluent English, Carpizo says. “You can’t afford to have communication gaps between yourself and the local management,” he says.
Yunker says retailers should answer the following questions before using a vendor to manage their e-commerce operations in foreign markets:
- Do you already offer e-commerce for the domestic market? If you have already sunk costs on a U.S. e-commerce site and feel it is successful, you need only examine what it would cost in time and money to develop and manage localized e-commerce sites. There is no reason that you cannot continue to manage the domestic site while outsourcing the global sites.
- Will you spend more than $100,000 on a localized e-commerce site? If so, it makes sense to do the math on potential savings of using a hosted solution, even if the hosted solution is used only by the non-domestic sites.
But even with hosted e-commerce, a retailer will need people to manage the relationship with the vendor and a learning curve on both sides is inevitable, Yunker says. And there is a certain amount of risk associated with bringing on any new vendor.
Perhaps the soundest advice is offered by Hadchiti and echoed by Yunker and Carpizo. “Be sensitive to the local culture and do your research on the market, economy and competition in advance,” Hadchiti says.
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