When BackWoods Grocery Inc. opened its Internet storefront for business in July 1999, its order form clearly stated that it didn't accept international orders. But that warning didn't stop an English-speaking customer in Switzerland from placing an order for $71 in merchandise, eight percent higher than the company's average sale.
The online outdoor specialty retailer and distributor, which sells more than 400 kinds of food and cookware for outdoor enthusiasts, was quickly thrust into the world of international e-commerce. "We panicked at first, but then we realized it was hard to turn it down," says Lisa Beckham, 31, president of the Atlanta company which she founded with her husband, Paul Beckham, 31, and brother, Curtis Bishop, 26.
The trio originally thought the process of shipping products overseas-especially food products-would be too complicated because of tariffs, duties, customs and other issues. The order from Switzerland was about to change their minds.
Like Beckham, many U.S. entrepreneurs find themselves unprepared to do global e-commerce-even though they know people worldwide can access their Web sites. But because foreign customers offer new opportunities for continued growth, it pays to develop some kind of plan for dealing with-and even reaching out to-foreign customers.
Melissa Campanelli is a technology writer in Brooklyn, New York, who has covered technology for Mobile Computing & Communications and Sales & Marketing Management magazines. You can reach her at firstname.lastname@example.org.
Foreign Shipping Regulations
One of the biggest obstacles faced by U.S.-based entrepreneurs is figuring out foreign shipping regulations. "Processing an international order is cumbersome because of the regulations that each country imposes on what you can and can't send into a country," Beckham says. "Furthermore, you can't use flat-rate shipping charges like you can in the U.S. because the costs are more difficult to estimate."
Before sending the order to Switzerland, she began researching the intricacies of sending products overseas. Although UPS remains her main domestic shipper, she quickly learned that the U.S. Postal Service (USPS) is cheaper and provides more information when it comes to U.S. Customs Regulations. Beckham visited her local post office, where she retrieved a country-by-country listing that highlighted which products were allowed in which countries and explained various other regulations.
When she visited the USPS Web siteand entered shipping information into a global-shipping section, Beckham was able to access the many different options the agency offered for sending products overseas. Its lowest-priced service ships products in 11 weeks; more expensive rates deliver faster.
Beckham let her customer in Switzerland choose the method of shipment. To deal with the foreign currency issue, Beckham decided to accept credit-card payments for orders in U.S. dollars only. The customer's credit-card issuer calculated the exchange rate.
Beckham's research on international service paid off: Fifteen days after BackWoods shipped the order to Switzerland, it received another international order for $245. Currently, 2 percent of the company's orders come from Canada, New Zealand, Switzerland and the United Kingdom.
|Learn the art of fulfilling Web site orders. Check out "We've Got A Secret" to refine your shipping skills.|
Beckham isn't the only entrepreneur who's found that fulfilling orders for international customers is both tricky and time-consuming. In fact, about 85 percent of the retail, Internet and manufacturing companies that have online presences can't fulfill orders internationally, according to a report titled "Instant Global" by Forrester Research. The report notes that because of the complexity inherent in shipping products across borders-including the inability to price total delivery costs-global fulfillment is currently the biggest impediment standing in the way of penetrating global markets via the Internet.
But that's not such a big problem once you have access to the right resources. Aside from the USPS, the SBAalso offers information about global business. It has publications that explain foreign tariffs and customs, and provides assistance in finding translators to interpret e-mail questions in foreign languages. Or log on to the Department of Commerce's Commercial Services division Web site, which includes market research on 90 countries and a video webcast library with programs on market opportunities and tips on doing business overseas.
|Slim down your shipping costs. Read "Special Delivery" to find out how to get the best deals.|
Another resource to take advantage of are professional logistics companies that handle international shipments. Before choosing one, make sure it can explain tariffs, duties and customs issues for foreign countries. Logistics firms usually have relationships with carriers that can handle international orders, including the postal service and DHL Worldwide Express, which has an international air-delivery network linking more than 635,000 destinations in 230 countries and territories.
Although businesses can work with these carriers directly, outsourced logistics companies may offer more competitive prices, because they consolidate freight and ship in bulk.
"Localizing" Your Web Site
When the volume of overseas orders begins to rise, it's probably time to translate your Web site into a foreign language or even take the extra step to "localize" it (transform the entire Web site into a foreign version).
Localization requires a translation software program or service. Two popular translation software companies are Systran Softwareand Lernout & Hauspie. Both systems offer link services that you can embed in your Web site, allowing visitors to hit a button and receive a translated page. These services may cost from $200 to more than $1,000 per month, depending on fees designed by the provider.
|Expand your horizons-read "Going Global" and stretch your Web site's global reach.|
Instead of merely translating a site, however, you'll need to develop a site that includes local payment systems, legal information and freight costs. Localization services can help with these issues--find them by doing a basic Internet search. Lernout & Hauspie offers a popular service that assigns consultants to companies--but the company's services can cost several thousand dollars per month, depending on languages or content. So when choosing localization or translation services, look for someone who understands the particular foreign culture and who can ensure your site translations are clear and inoffensive.
"You should get someone involved who knows the language and can help you avoid saying something that you didn't realize you were saying," says Jim Foley, an international-trade specialist in Peoria, Illinois, and author of The Global Entrepreneur. If localizing your site is too costly, try a low-cost affiliate marketing program instead. That way, your company piggybacks on a Web site that sells complementary products in the foreign market.
But remember, says Chris Anne Wheeler, vice president of Information Services for ActivMedia Research, a marketing firm in Peterborough, New Hampshire, that specializes in e-commerce issues for companies, "Spending large amounts in those foreign markets where e-commerce is behind that of the U.S. shouldn't be the focus of your marketing activity."
Get Ready For Global Expansion
As overseas shipments continue to grow, it's important to prepare for a potential explosion in global growth. It may be necessary to use a fulfillment company, or even a carrier such as DHL, to hold inventory in a foreign country. This arrangement allows your company to fulfill orders in small batches as needed and save on international freight costs.
However, if you're seriously thinking of expanding your reach internationally, Foley says you should start relatively small. Begin by focusing on the areas where you are receiving the most unsolicited orders, then expand from there.
For now, Beckham will be holding off on adding translation software to her site or setting up deals with carriers. "It depends on how much growth we see," she says. "Right now, we have no plans to do this, but if our international orders got up to about 15 percent, certainly we would do it based on the country."
- ActivMedia Research LLC, email@example.com, www.activmediaresearch.com
- BackWoods Grocery Inc., 120 Interstate N. Pkwy., S.E., Ste. 304, Atlanta, GA 30399, www.backwoodsgrocery.com
- Leslie Banks, firstname.lastname@example.org
- Bradley University, International & NAFTA Trade Centers, email@example.com
- Forrester Research, www.forrester.com
- Lernout & Hauspie, (888) LERNOUT.