Online shopping takes place around the clock and around the world. This global market for ecommerce transactions now makes up a critical share of international trade. The World Trade Organization estimates steady growth for cross-border commerce (including ecommerce) over the coming decade.
If your company makes business-to-business (B2B) sales, you’ve probably considered joining the expanding world of B2B cross-border ecommerce. Adopting an international B2B ecommerce strategy allows you to access a vast customer base. Here’s how to structure your ecommerce platform for cross-border selling.
What is B2B cross-border ecommerce?
B2B cross-border ecommerce refers to businesses in different countries buying and selling goods or services online. B2B cross-border ecommerce leverages digital platforms, websites, and online marketplaces to facilitate the exchanges, regardless of the businesses’ locations.
Benefits of B2B cross-border ecommerce
A B2B cross-border business model can offer several significant benefits to ecommerce business owners. Here are some key advantages:
-
Access to new markets and customers. Selling cross-border allows businesses to access entirely new markets and customer segments. Cross-border ecommerce can be especially beneficial if the domestic market is saturated or there’s a demand for your products and services in international markets.
-
Diversification and risk mitigation. Diversifying your customer base across different countries can reduce the risk associated with economic fluctuations or market-specific challenges in one region. If business slumps in North America but surges in Southeast Asia, your cross-border ecommerce strategy might help offset the slowdown.
-
Competitive advantage in your market segment. Entering new markets via cross-border ecommerce can provide a competitive advantage. Businesses that enter foreign markets can establish brand visibility and customer loyalty before other international competitors arrive.
-
Product life extension. Products reaching the end of their life cycle in one market might have extended life cycles in other regions. Cross-border ecommerce lets you pivot to international markets when a product loses its luster at home.
-
Extended selling seasons. Ecommerce businesses can take advantage of seasonal variations in demand by selling in different countries with varying climates and holiday seasons. For example, a North American swimwear business can target markets in the Southern Hemisphere during the summer months of December through March.
-
Economies of scale. International expansion can lead to economies of scale in production, procurement, and logistics, potentially reducing costs per unit and increasing overall profitability.
-
Maximizing existing resources. Expanding into global markets online will enable you to pursue new business opportunities without significantly increasing overhead costs.
Best practices for B2B cross-border ecommerce
International expansion can lead to new customers and business growth for your B2B ecommerce operation. The process requires legwork and attention to detail. Here are five strategies to ensure successful B2B cross-border expansion:
Conduct market research
First, analyze the demand for your products and services in your target market. You’ll need to run a competitive analysis, identifying gaps in the market that your products and services can fill. Study competitors’ pricing strategies and positioning, which may vary based on local economies and consumer expectations.
Choose the right ecommerce platform and payment gateway
Opt for a flexible and scalable ecommerce platform that supports multi-language, multi-currency, and international shipping. You’ll also want a payment gateway that supports multiple currencies and offers secure transactions compliant with international standards.
Beyond this, look for platforms that give you the ability to contextualize your catalog for different markets. For example, you may want to show one product line to customers in North America, but not to customers located in Australia. On the same token, you should be able to offer different currencies, languages, shipping and payment options, and products without having to open a new store for each. This work quickly gets complicated and is unscalable when you’re expanding to new markets.
Shopify offers industry-leading ecommerce functionality and an app store filled with international B2B solutions, making it a strong choice for many cross-border businesses.
Optimize your website for international customers
Translate your website content into the local languages of the target market. Use region-specific formats for dates, addresses, and contact information. Display prices and transactions in the local currency to provide clarity and transparency to international customers. Clearly state taxes, shipping costs, and delivery times for international orders.
Offer localized customer support and service
Recruit and train a customer service team or support center that can handle inquiries and issues from international customers. Post a comprehensive FAQ section in different languages on your website. Your FAQ section can help answer common questions and concerns of international customers.
Ensure legal compliance
Adhere to all trade policies, taxes, and compliance requirements in the target country. You can consult with local legal advisors to ensure compliance with laws, tax regulations, and data privacy requirements in each country where you do business. If you sell via multiple channels, make sure each sales channel collects and remits the applicable amount of tax.
Challenges of B2B cross-border ecommerce
Expanding B2B ecommerce across borders presents its share of challenges, including language and cultural barriers, payment and currency issues, and shipping and logistics complications. Here are some well-known challenges and strategies for navigating them:
Language and culture
Understanding and adapting to cultural nuances, business etiquette, and preferences can be challenging. Consider enlisting professional translation services to ensure accurate communication of essential documents, contracts, and product information. Educate your team on the norms and practices of the target market to build effective business relationships.
Payment and currency
Dealing with multiple currencies and managing exchange rate fluctuations can affect transaction costs and revenue. You may also encounter varied preferences regarding payment methods and gateways for online sales. Tackle this head-on with a payment system that supports multiple currencies, allowing companies to make B2B purchases in their local currency. Consider a dynamic pricing model that adjusts prices in real time based on currency fluctuations and market conditions.
Shipping and logistics
As a B2B international shipper, you must navigate customs processes and import/export regulations. Meanwhile, high shipping costs and long delivery times may deter your customers. Save time by working with reputable logistics companies experienced in international shipping. You can also negotiate shipping rates with international carriers to minimize costs and improve delivery efficiency.
International laws and regulations
As a cross-border B2B ecommerce merchant, you’ll have to weed through diverse international laws, trade agreements, and taxation policies based on the total value of your shipments. Before you launch your cross-border operation, consult legal experts well-versed in international business laws to ensure compliance and reduce legal risks.
Conquering cross-border ecommerce with Shopify
This article has outlined several of the very real (and common) growing pains associated with selling globally. Merchants are constantly fighting an uphill battle to understand the nuances of the markets they’re expanding into, tailoring storefronts that cater to each market’s preferences, and correctly estimating and collecting duties and taxes at checkout.
These are just a few reasons why some of the world’s largest retailers rely on Shopify to simplify their global expansion. Shopify includes several built-in features that enable merchants to sell globally from a single store and admin, including:
-
Contextualize store content. Shopify allows you to customize product content, prices, and payment methods by country or region with Managed Markets.
-
Customizable catalogs. Shopify makes it easy to set custom pricing and exchange rates for each country or group of countries you’re targeting.
Customer-specific shipping and payment methods. Using delivery and payment Functions, merchants can customize the shipping and payment methods for each region or per customer.
-
International domains. Merchants can leverage localized domains or subfolders that are optimized for search results in the regions they’re selling into.
Want to learn more about how Shopify can empower you to sell to a global audience? Get in touch.
Cross-Border Ecommerce FAQ
What are some of the top marketplaces for B2B cross-border ecommerce?
Alibaba, DHgate, eWorldTrade, and Faire are among the top B2B marketplaces for cross-border ecommerce.
How do I identify the right international markets for my B2B business?
Identify the right global markets for your B2B business by conducting market analysis. Your analysis should include competitor assessments, an understanding of local demand and customer pain points, and research into customer purchasing power.
What payment methods should I offer to international B2B customers?
Offer your international B2B customers various payment methods, including bank wire transfers, credit cards and debit cards, ACH debits, electronic funds transfer (EFT), electronic checks (eChecks), and mobile payments. The Shopify POS (point-of-sale) system supports many payment methods and may be a strong choice for international B2B ecommerce.
What are some key logistics considerations for B2B cross-border shipments?
Among the logistics considerations for B2B cross-border shipments are customs compliance, taxes and tariffs, shipping carriers, inventory management, warehousing, risk management, and managing customer returns.
What technologies can I use to streamline B2B cross-border operations?
Many emergent technologies can streamline B2B cross-border operations, including enterprise resource planning (ERP) systems, supply chain management (SCM) software, customer relationship management (CRM) software, and flexible ecommerce platforms that support international currencies.
