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Five key questions about ecommerce globalization

Britney Wells

November 22, 2022

Five key questions about ecommerce globalization

Five key questions about ecommerce globalization: A cross-border panel discussion

Summary of a Hive by UPS Panel Discussion on Globalization

To access this video discussion, go to the Hive by UPS desktop lobby or download the Hive by UPS app (Apple and Google Play) and go to the lobby. Once in the lobby, navigate to the idea exchange section and click on Globalization.

Expanding your business internationally has its challenges, even for those already doing it. To help solve this, Hive by UPS and Zonos teamed up to discuss business globalization.

Hive by UPS is an immersive 3D digital experience that allows ecommerce and cross-border leaders to discuss and showcase new and noteworthy technology. This panel on Globalization is part of their Customer Spotlight Series, featuring:

  • Clint Reid, CEO, Zonos
  • Jessica Rosen, President, [_UPS STTAS and UPS FTZ Zone Solutions_
  • Franco Yeung, CEO, My Home Nature
  • Yossi Sheffi, Professor of Engineering Systems, MIT
  • Sarah Barnes-Humphrey (host), Founder and Host of "Let's talk supply chain"

During this discussion, these panelists spoke about the difficulties ecommerce businesses face when trying to sell internationally, the importance of research when expanding to foreign markets, and why technology is necessary for successfully globalizing an ecommerce business.

The panelists' diverse backgrounds and areas of expertise allow us to learn about cross-border ecommerce through the lenses of those that both facilitate and take part in importing and exporting. This blog will provide an overview of the panel discussion, outlining the following:

  1. What are some barriers when selling internationally?
  2. How important is research for cross-border selling?
  3. What is the importance of partnerships for globalizing your business?
  4. What are some tips for importing and exporting as an ecommerce business?
  5. How can Zonos help expand your business internationally?

1. What are some significant barriers when selling internationally? 

Zonos, an advocate and facilitator of cross-border trade, gets into the difficulties that can come with expanding your business internationally with no outside help (solutions to come later).

If you have ever sent or received a package to or from a foreign country, you are probably familiar with some cross-border selling barriers already. Here are some of the most common pain points:

  • Not knowing how to accurately calculate and collect duties, taxes, and fees
    • And dealing with consequential rejected and abandoned packages
  • Country-specific Harmonized System (HS) code classification for accurate duty calculations
  • Shipments held up at customs
  • Shipment delays
  • Country-specific product restrictions and prohibitions
  • Country-specific import documentation and licenses
  • Overall global trade compliance

Clint makes the point that so many difficulties exist for international trade because "cross-border trade was not built for ecommerce." This is the core reason it is complex; global trade is not new, but ecommerce is (in comparison). This means that ecommerce businesses wanting to expand internationally have to do the work to fit into a system that was not built for them.

Because of this, selling cross-border as a small-to-medium business successfully is such a great feat and can take up a lot of time. As Rosen points out, businesses trying to navigate the complexities of international trade themselves end up with less time to focus on where their attention should be: running and improving their actual business!

Sheffi and Franco both build on Rosen's point by mentioning that in addition to the difficulty of keeping up with trade requirements (documentation, restrictions, etc.), the laws also differ by country. Imagine that there are 100 regulations you need to be familiar with, and you ship to 10 different countries. 100 x 10 = 1000. That is the number of regulations you need to consider and stay compliant with in order to sell to those 10 countries successfully.

Remember, exporting to an international consumer, when not done properly, can lead to a negative customer experience, customer churn, and potential legal/monetary penalties.

2. How important is research for cross-border selling? 

Based on the complexities outlined above, you may be wondering where you can even find information on trade regulations and restrictions, or if it's even worth it. Let me first say, it's worth it. Second, there is a lot of information on cross-border trade on the internet; a good, comprehensive resource is Zonos Docs.

Clint makes an interesting point about doing research for cross-border ecommerce, saying, "This is very different for a small ecommerce business compared to a large corporation. If you're a small-to-medium business selling one standard product, you don't have to be too extensive and you can learn as you go."

To clarify, when he says "one standard product," he means one type of product that is generally not restricted in most countries, for example, clothing and apparel. If you sell clothing items that fall under less than 10 different HS codes and those products are considered internationally safe (which clothing usually is), it is much easier to sell internationally as opposed to businesses selling a vast range of product types or typically restricted products like plants.

Speaking of plants, Yeung's ecommerce business exports live plants, which are restricted imports in many countries, internationally. The unique perspectives of this panel give us great insight! As Clint points out, plants are complex products with extensive, country-specific requirements for import.

Yeung says that he "stepped into the market without any research." The more difficulties he ran into, the more research he had to do, including reading 800 pages of regulations! Because he is unique in exporting plants from Hong Kong, he did not have anyone in his space to seek advice from, and therefore, tried to research and solve the problems he ran into one by one. In short, Yeung does not recommend doing that.

Rosen makes an insightful comment that balances out Clint's and Yeung's points; cross-border can be costly. Duties, taxes, and other import/export fees are costly, but so is time. Rosen emphasizes that even if doing the research required for your business to sell cross-border seems feasible based on the product types, number of SKUs, and the amount of ship-to countries you have, time is money. The time and resources put into researching international trade regulations take the focus away from actual business operations, which can be costly in the long run.

It may seem like they're saying it is hopeless to try on your own, right? In some cases, it can be hopeless. But in the many cases where it is doable, it is not worth taking the focus off of business ops or the hiccups and poor customer experience you may run into in the meantime.

Fret not, there is a way to sell cross-border easily without hiring a whole team of experts to get you through it.

As an engineering professor, it is only natural that Sheffi brings up the increasing need for technology to manage the growing complexities of the industry.

3. What is the importance of partnerships for the globalization of your business? 

Based on the previous section, you may have guessed that it is difficult to successfully scale your growing international orders manually. Acceptance is the first step; you need help, and that's okay!

The solution is to find a technology solution that best fits your business needs. Technology has been created to help ecommerce fit into and work in the global markets, solving many of the problems that businesses have. The panelists jumped in with their input concerning finding a technology partner or solution to help facilitate and scale your international business.

When asked about tips on finding the right solution, Rosen says, "finding a partner that can combine all the different aspects of the supply chain into one is helpful" and "a partner who will be honest about the good and bad and provide alternative solutions." Rosen makes the excellent point that finding a comprehensive solution that is transparent and fitting to your needs is the key to cross-border success. Clint agrees about the importance of finding "the right technology partner."

Yeung attests to this by sharing his own experience with finding a technology solution for his complex cross-border business that suited his needs. When Yeung initially decided to meet with UPS, he "didn't have hope that UPS would be able to handle [his] 'weird' products." However, his concerns were later put to rest.

He met with a representative and explained his business model and why it works, as well as what was important to him. UPS began working with him and even offered options tailored to his company's concerns about protecting their environment, such as the carbon-neutral scheme, for which Yeung opted. This is a prime example of why finding the right solution is integral to cross-border success.

4. What are some tips for importing and exporting as an ecommerce business? 

A little advice from industry experts is never a bad thing, so let's look at some tips from the panelists:

  • "While it is important to do research, sometimes it isn't feasible. Know what your risk is, like losing a package or a customer. But be excited about it! Put a lot of time into it. Be willing to put time into this because there's a return on your investment if you do it." - Clint Reid

  • "Plant a foundation, and don't hesitate. Find the right partner for your business specifically and do a bit of research yourself." - Jessica Rosen

  • "Do you want to do it yourself or partner with someone to scale as you grow? For a small company, it is not a question. They have to partner and use other sources because making the customer comfortable is important." - Yossi Sheffi

  • "Partnership decisions are an important decision for businesses selling products and services. Finding a partner or partners is so important, especially for smaller companies like mine, because it helps speed success." - Franco Yeung

5. How does Zonos technology help you expand your business internationally? 

If you're shipping internationally and struggling, you are in need of a cross-border technology partner, and Zonos may be the one-stop solution you need. They have a range of APIs and plug-ins to provide your business with the data and calculations needed to sell internationally, including the only true landed cost solution on the market, a domestic-feeling international checkout product, and an automated HS code classification product. They even have a Professional Services team that can help you integrate the right solution. Their blog on how to expand your business internationally explains how Zonos helps.

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