Grow Your Business with Cross-Border eCommerce

December 2, 2022
8 min read

Cross-border ecommerce is a low-risk strategy to test into new international markets without increasing your inventory carry costs or investing in warehouse space in new markets.

Breaking out into an international market can carry huge risks as well as rewards. This guide will show you how leveraging cross-border ecommerce can help you mitigate those risks and tap into new markets.

What Is Cross-Border eCommerce?

Cross-border ecommerce is selling your inventory or services online, and then shipping internationally to the customer. A business might consider using this method to test international markets.

This is different to storing physical inventory in another country. The additional expenses that come with shipping internationally may make storing inventory in another country seem more appealing, but there are potentially serious costs and risks in doing so, especially when a business is just starting to explore foreign markets. Fortunately, cross-border ecommerce solves many of these risks by allowing you to test new markets with little to no capital investment.

Why sell cross-border?

Cross-border ecommerce provides much lower risks than physically storing your inventory in another country. There is significant risk involved in taking on the cost of shipping inventory overseas without knowing the level of demand for your product. If you find there is no demand for your product, you could be left with the decision to liquidate that inventory to minimize warehousing costs or incur the additional cost of bringing it back stateside.

Selling internationally online minimizes these risks considerably. Sales made online allow you to test the demand of international markets without incurring the losses of stocking inventory in a potentially low-demand market. If it turns out that the demand simply isn’t there, you can quickly pull out of that market.

As the market adjusts to a post-pandemic world’s needs, international ecommerce continues to be a popular choice for buyers. According to the US Department of Commerce, ecommerce sales in the third quarter of 2022 increased 10.8% from the same quarter a year earlier. Exports from the United States earned $251.9 billion in November of 2022.

Selling in Canada

Selling cross-border to Canada is a great way to start the journey towards international online selling. Canada’s physical proximity makes a logical first step for international expansion.

According to the United States Census Bureau, Canada is our largest year-to-date export partner, accounting for 17.6% of US exports, demonstrating a high appetite for US goods.

A Quick Note on Customs

When shipping to Canada (or shipping international in general), it is important to be aware of the customs protocols involved. Online shipping resources such as UPS will actually what the protocols and guidelines for shipping are. It’s important to remember that customs may be different from one country to the next, and this may vary the fees and taxes for shipping, so be sure to follow the protocols. 

When shipping internationally, payment must be made for duties, fees, or taxes. Payment should be outlined in your terms of sale to determine who will cover the cost. A shipment that is Delivery Duty Unpaid (DDU) will require the buyer to cover the costs before delivery can be completed. A shipment that is Delivery Duty Paid (DDP) will have the seller cover these costs.

In general, following protocols is key for a successful international delivery. A paper invoice is required to be included for many international deliveries, for example. Partnering with an outsourced fulfillment company that has international capabilities is a good way to help ease the burden of managing customs in-house.

Best Practices for Building Trust

Remember that you should also build up trust as you explore a new market. Many buyers are concerned about getting scammed when considering buying from an international company. Give them reasons to trust your company when they’re considering their purchase. In fact, one survey revealed that 81% of buyers consider trust as a reason for buying.

1. Be transparent about costs

No one wants to click on the “Proceed to Checkout” button only to be greeted with a surprise fee. Such a price shock can easily cause a buyer to abandon a cart and negatively affect ecommerce conversion rates. This is especially important when shipping internationally, as customs and shipping costs can quickly add up. Being honest about shipping costs helps establish trust; surprising customers with extra shipping costs at checkout can send business to a competitor.

2. Be honest about the product

Like costs, it’s important to describe the product as accurately as possible to the buyer. Describe the product honestly. A survey of American shoppers revealed that 35% returned a gift due to it not matching the picture or description. 31% said it wasn’t the right size. One way to help earn a customer’s trust is by including pictures from multiple angles of the product. Place it next to a yardstick ruler or a person to establish its scale and dimensions. 

3. Include customer reviews on your online store

Studies have shown that 62% of buyers consider customer reviews when learning more about a business. Another survey discovered that over 92% of customers were likely to purchase a product after reading a trusted review about it. Customer reviews clearly build trust with online buyers. Be direct in the transaction process and invite customers to leave feedback. Ensure that the process for leaving reviews is easy and user-friendly.

You can even incentivize customers to leave a review by offering them a coupon code or future discount (depending on your business). In addition to inviting customer feedback, be sure to respond to negative reviews in order to resolve issues. This will demonstrate that you care about the customer’s experience, and it could convince them to update their feedback to reflect a more positive experience.


4. Use a reputable international carrier

A buyer is more likely to trust your services if they know you are using a reputable international carrier. Use one that is well-known and has a reputation for its international presence. A buyer is more likely to trust a delivery carrier such as UPS over a service they haven’t heard of.


Extending Your Reach with Cross-Border Ecommerce

As markets continue to change and evolve with new and unexpected opportunities, cross-border ecommerce is a great tool you can use to help expand into international markets. It offers opportunities for growth and market testing without the higher risks of setting up a physical inventory in another country. 

Starting with markets closer to home, such as Canada, can be a great way to start. Storing your inventory in a warehouse near the border lowers your time in transit (TNT), making it more cost efficient to test sales into Canada. Finally, building trust with that new market will help it grow and make your cross-border ecommerce more successful.

Looking for a fulfillment solution to ship cross-border? Ware2Go is a UPS-owned company with an expansive US warehouse network supported by an industry-leading fulfillment software. To learn more about how Ware2Go is enabling ecommerce sellers like you, take a look at our solution.

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