In the summer of 1865, newspaper editor Horace Greeley offered this advice to a nation just then beginning to recover from the Civil War: “Go West, young man, go West and grow up with the country.”
As America begins to recover from recent economic challenges, Greeley’s best advice to merchants in 2008 would probably be to go online and build their businesses with overseas sales.
Factors That Make Global Selling Attractive
Domestic holiday sales, the bread and butter for many retailers, are predicted to be sluggish this year. With the economy volatile from Wall Street to Main Street, the National Retail Federation projects sales this season will rise only 2.2 percent this year to US$470.4 billion. That represents the slowest growth in sales since 2002.
However, projections for the online component of holiday sales are somewhat brighter. As example, Internet research company comScore forecasts growth of 6 percent to 10 percent compared to last year. Many experts cite the convenience of online shopping as resonating even in a slow economy.
In spite of recent gains, the once-mighty U.S. dollar continues to be weak against foreign currency. Ask anyone who has been abroad lately. The greenback dollar buys fewer euros, yen, pounds or “loonies” than it used to.
On the flip side, the cheap dollar has made America a great place to shop for those whose bank balances are denominated in major currencies other than the dollar. Trendy boutiques from Manhattan to Malibu have benefited from an influx of overseas shoppers. Fashion designer Tommy Hilfiger told the Reuters news agency in September that two-thirds of his business is now outside the United States, mainly in Europe.
And the bargain hunting is not limited to boutiques and galleries. Thanks in part to the relative weakness of the dollar, the U.S. Commerce Department says foreign customers snapped up $164.4 billion in American-made automobiles, electronics, food, industrial supplies and other products in July 2008, the biggest monthly gain in more than four years.
Number of Online Shoppers Worldwide Grows
While demand for American goods is up, the number of online shoppers worldwide is skyrocketing. According to Internet Retailer’s Top 500 Guide, “Europe spent $94.4 billion shopping online in 2006, a figure expected to rise by 113.2 percent to 201.3 billion in 2009.” In Germany alone, online shopping is predicted to hit more than $108 billion in 2008, according to eMarketer.
On the other side of the world, the China Online Shopping Survey released by China Internet Network Information Center, found that the total online shopping value in four municipalities and 15 developed cities in China reached more than $2.3 billion in the first six months of 2008. Though only 19 percent of its citizens have Internet access, China boasts more than 253 million Internet users. That’s an emerging market nearly the size of the total population of the United States.
These three factors — a weak dollar, strong demand for American goods and Internet adoption on the rise — add up to real opportunity for American merchants willing to do business overseas.
How to Take Advantage of Global Selling Opportunities
Where Americans taking Horace Greeley’s advice to heart might pack up a covered wagon and head for California or Oregon to seek their fortunes, today’s retailer needn’t endure such hardships. With little more than a computer and an Internet connection, retailers today can reach markets virtually anywhere in the world. However, like the wagon trains of old, online merchants heading out into new territory in search of sales would be wise to hook up with an experienced guide who knows the routes and who can provide advice on both the opportunities and the pitfalls. Such help is available in both the public and private sectors.
The U.S. Small Business Administration, for example, offers SBA Export Express loans to help small businesses develop or expand their export markets. Loan proceeds may be used by small retailers to finance any export development activity, including translation of marketing and promotional materials (like on a retailer’s e-commerce Web site) for use in overseas markets. Funds may even be used to acquire, construct, renovate, modernize, improve or expand productive facilities or equipment to be used in the United States in the production of goods or services for export.
In the private sector, PayPal has created a Global Selling Guide to help small businesses market and sell their goods and services in 17 foreign countries in Europe, Asia, Australia, North America and the Middle East. Along with information on the unique holiday customs of each nation, the site offers tips on a variety of topics including shipping providers, online payment methods, customs and tax considerations.
With the right knowledge and proper tools in hand, U.S. small businesses can begin to harness what the global marketplace has to offer. And just as Horace Greeley advised Americans in 1865 to “Go West,” now is the time for American small businesses to “Go Global.”
Use these practical tips to help assure the success of your global selling efforts:
- Highlight your willingness to handle overseas orders. Perhaps a crawl banner welcoming visitors in multiple languages will catch a customer’s eye.
- Make sure your Web site is available in local languages. Add a toggle switch so customers can select their language of choice.
- List prices in local currencies.
- Provide clear information about anticipated shipping costs, taxes, return policies and the countries or markets that you serve.
- Make sure to communicate estimated shipping times to your customers.
- Highlight the unique American aspects of your merchandise; e.g., pure Vermont maple syrup.
Eddie Davis is senior director of SMB merchant services for PayPal.