American merchants

What American merchants should consider when selling to European marketplaces

With the holiday season only a few sleeps away, American marketplace merchants are experiencing another merry ecommerce season. Online retail sales reached $7.4 billion during this year’s Black Friday frenzy, increasing the digital sales for that period by 43% year on year.

But that’s not all. According to the ‘2019 Deloitte holiday retail survey,’ on average each US household is planning to spend nearly $1,500 this holiday season. More than three-quarters of shoppers admit they are likely to spend the same amount or more than last year. In addition to that, ecommerce sales are expected to grow by 14-18% over 2018 and are expected to surpass offline sales too. That’s a continuation of a trend we saw last year.

Main European markets follow suit, with consumers in the UK, France, and Germany spending the majority of their Christmas shopping budget online. A great opportunity for US marketplace sellers, looking to scale their business by expanding abroad. Sadly, one that’s often overlooked or played down.

Beginnings don’t have to be the hardest

‘Beginnings are always the hardest’, that’s how the old saying goes. Well, taking the leap into the European ecommerce market might feel like jumping in at the deep end, especially as there are some cultural and language differences between America and Europe. However, it doesn’t need to be difficult. Don’t let old sayings put you off, there’s a lot of expert advice, tried and tested tools and even sales boosting programs available that can take away most of the daunting aspects of growing internationally. Here are a few thoughts and easy to implement steps that will turn those doubts, confusion or maybe procrastination into success.

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Stay focused… it pays off

Whether in life or business, staying focused is the key to success. The European market can offer the opportunity of a reliable and growing source of sales and income, and not just a quick win or fast cash grab this holiday season. Don’t feel you need to grow to all or most European countries at once. There are 44 of them so every thoughtless “yes” can lead you further into a trap of ‘wanting it all and getting so little’’.

Instead of ending up with a whole bunch of European countries with no substantial outcome on the onset, concentrate on a selected few with visible results and then scale up.

The UK is one of the first markets that spring to mind when thinking about growing to Europe, and it’s definitely a royal opportunity, not only because of the English speaking population. A similar culture base and comparable shopping behavior make Brits an attractive audience for your products too. While the market might be substantially smaller than the one back home, $12 billion in annual revenue is nothing to sneeze at.

Since ONE is a lonely number, stay cautious but at the same time don’t put all your eggs into one basket, by offering your products to the UK audience only. Countries like Germany, France or Italy might not share a common language, but being the most populous European markets and world’s fifth, tenth and twelfth largest economies, they can offer a good return on investment too.

 

Graph 2

The top ecommerce markets in Europe: the UK, Germany & France have a huge buying power and beneficial digital infrastructures.

 

‘Mature cross-border’ markets

Germany, France, and Italy are also what you might call ‘mature cross-border’ markets. That itself should turn your attention. Consumers from those markets are not only used to buying goods online, they often purchase those from abroad too. It’s surely great news for US merchants who sell products that are popular or a niche market in those countries, and/or those who can have competitive prices to those offered by domestic sellers. Diamond Jim’s, a jewelry business, from Phoenix, Arizona, has made its leap into the European markets a great success, by selling American and native American jewelry to countries like Germany, UK, France, and Italy. “The customers that we’ve got by growing internationally with the help of Webinterpret have been delighted with the products. They have access to American products and perhaps even Native American wears they’d never get any other way,” admits Roy, Director of Operations at Diamond Jim’s.

Graph 3b

The top product categories among German, British, French & Italian online buyers show a degree of similarity.

You don’t have to reinvent the wheel

The good news is, you no longer have to be a translation expert, SEO whiz or a business analytics genius to be successful abroad. There are solutions available that will save you time and effort when growing into the unfamiliar terrain of European markets. Solutions that have been tried and tested.

Amazon’s Pan-European FBA, for instance, helps you grow your business in your home marketplace but also abroad too. The program leverages Amazon’s global scale and sells to millions of new customers in Europe. You can sell to all five Amazon European marketplaces.

eBay, in turn, offers the Active Cross Border Listing Program, which comes with a Webinterpret’s localization solution. It allows you to sell on 6 eBay’s international markets with no insertion fees, but also provides free listings localization in German, French, English, Italian, and Spanish. Jim Butler, the owner of the Curated Clothier and a host of a popular YouTube channel has been using Webinterpret to grow his sales on eBay.

‘With WebInterpret, international sales have gone up tremendously. At the same time, the “riskiness” of selling online has NOT increased. I believe this is because buyers feel that they understand the item and what they are paying for. Additionally, depending on the currency translation to the US dollar, you are getting an additional amount of margin in international sales. I find that I often make much more money after expenses on my WebInterpret sales when compared with my domestic sales,’ mentions Jim.

Experiences like that have been shared by thousands of other US marketplace sellers. They show that programs like those introduced by Amazon and eBay work, as there’s a growing demand for cross-border sales, both on the side of sellers and buyers.

Remember, localization is king

Let’s demystify the word ‘localization’ to start with. It’s often confused or used interchangeably with translation. Rightly so? Rather not! The translation is simply changing words and phrases from one language to another. It often does not take into account the cultural differences between people of countries from source and target markets. Localization is the adaptation of a domestic listing, for example, to a new language and culture. A fully localized listing should be indistinguishable from one that originated from that culture or market. We want the experience for the buyer to be as close to their normal native experience as possible, don’t we? If we are to attract their attention and then convince them to buy our product.

Full localization is an absolute must if the seller wants to compete on a level playing field with local competitors.

Webinterpret is, for instance, a company that provides that fully localized experience both for eBay and Amazon listings. The solution they offer, which integrates with Amazon and underpins eBay international programs, not only localizes the listings, improving their SEO and in turn searchability, but also converts prices and sizes, and synchronizes stock levels across different sites too. Roy from Diamond Jim’s found out himself how a full localization can increase your conversion with international buyers and in turn sales. ‘Putting our listing up completely in the native language and in their currency made us seem very local to them and very friendly. It increases sales dramatically. Our international sales are now almost 30% of our total web sales,’ admits Roy Schott from Diamond Jim’s.

All in all

Marketplace sellers of all shapes and sizes look for opportunities for market growth and diversification. What can be the more obvious and scalable solution to that then growing your business to European markets. The European Union alone is an economic zone larger than that of the USA and Japan combined with more than 500 million consumers. And the EU is made out of only 28 (out of 44) countries that are based in Europe. Of course, like with everything in life it comes at a price. And the price is some persistence and endurance, some hours of preparations, some decisions about the right tools, and most of all focus and dedication.

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