Paul Waddy, a leading authority in ecommerce and globally renowned author of "Shopify for Dummies", has revealed his seven 'golden rules' which are designed to guide Australian companies to reach global ecommerce success.
One of the primary issues Waddy cites is the rush many brands engage in when selling abroad, building novel websites and securing new domains targeted at each market without clearly understanding the why of their strategies. Waddy warns, "forced international expansion can lose you money for a sustained period of time." He goes on to enlighten, "If you're pushing into a new market, and you don't have existing organic traction, then you're likely to experience a few problems."
Waddy strongly recommends waiting for some organic traction to be visible before accelerating overseas sales. If a company is spending on paid media ads in a market where it's making less than $5-10k a month, chances are they're going to burn cash for around 12 months. Paying for success seldom works well, he says.
Another rule emphasises addressing local currencies and payments. According to Waddy, enabling acceptance of foreign currencies is quite straightforward, and the option to do so is just a quick switch in the settings of Shopify. He mentions Reach Payments as a go-to for businesses not using Shopify, and Airwallex for establishing an international bank account without the need for a local entity set up in every market.
Waddy highlights the importance of calculating international pricing correctly, which a lot of brands do not. Incorrectly converting currency can lead to prices being off-balance and customer confusion. Ensuring fast and affordable shipping that's on par with local competitors is an important factor, as is a smooth returns process, he says.
Taking care of taxes and duties, which can be a deal-breaker for many customers, is another advisory. This could involve a decision between "Delivered Duties Paid" (DDP), where the business handles taxes, and "Delivered Duties Unpaid" (DDU), where the customer does. Waddy recommends Avalara for setting up a convenient solution for this challenge.
The final rule is to target countries speaking the same language first, as handling translation and cultural differences can be tough and expensive, according to Waddy.
"For Australian businesses, larger ecommerce brands tend to reach the $20M a year mark in sales, and then switch to the US and UK markets, as they push to $100M. If you're doing $2-3M a year in sales, then it's unlikely that you're anywhere near the ceiling of your market, so you should probably focus on reaching your potential in your home market before investing too much in a new market," Waddy concludes. His insights might just be the guiding light for Australian companies venturing into global commerce.