3 Essential Small Business Tips When Selling Internationally


One of modern technology’s biggest advantages is that it allows small businesses to scale quickly. The days of small businesses focusing only on their local areas are long gone. Anyone with an internet connection can set up an online store and target international customers.

While this is a huge advantage for small businesses, selling internationally brings its own challenges. For instance, international customers will have different demands and expectations when buying goods, and businesses must consider these.

In no particular order, here are 3 things small businesses should keep in mind when expanding to a new international customer base online.

Rethink Payments

If there’s a single power your business must possess, it is this: The ability to accept every payment, from anywhere. International customers will likely have different payment preferences from your regular domestic ones, and you must offer them the right options.

There is a wide range of payment options available these days. Everything from a credit card to an easy payment link exists. From a business owner’s perspective, offering options is simple but finding the right payment processor that can handle the complexities of these options is tough.

Pay attention to the fees a processor charges since they will add up over time. For instance, a processor that charges a 5% commission on every transaction will quickly reduce your bottom line. Given the online nature of such payments, security is an important issue to consider as well.

Check the processor’s online reputation and evaluate them thoroughly. How good is their customer service, and how prompt are their responses to merchants? Many companies these days redirect people to lengthy and unhelpful FAQ pages instead of offering them the ability to talk to a human being. Check how hard it is to talk to a person.

Lastly, the ability to accept payments in different currencies is essential. Check the currency options the service provider offers and any associated fees.

Research Regulations

Regulations vary in different jurisdictions, and small businesses inadvertently get caught up in compliance issues due to ignorance. Tax rules can especially become convoluted, and finding the right help is essential. For instance, an American business selling in the EU must comply with a range of EU VAT rules that can make your head spin.

In addition to VAT, there are also customs duties and other charges to consider. In some cases, the goods you sell might fall foul of local authorities. For instance, a product that is perfectly legal in your local market might be illegal or exist in a gray zone in a foreign market.

Make sure you check for the existence of a free trade agreement between your country of operations and the customer’s country. These agreements lower duties and taxes, but they might potentially add to the paperwork you need to file. In some cases, if you sell goods amounting to a sum greater than a threshold, you might have to establish a local presence in the foreign country.

In addition to foreign regulations, you must also research local regulations regarding international sellers. Are there any additional tax forms you must file with your authorities? How should you report foreign earned income, etc? Always seek professional help before setting up shop. Neglect doing this, and you might end up on the wrong side of the law.

Rethink Shipping

While marketing your product to an international audience is great, delivering physical goods is challenging. Shipping goods physically to an international location takes time. Companies like Amazon have redefined customer expectations when it comes to shipping.

Shipping times that last entire weeks are no longer acceptable for most products. If you can’t deliver within a reasonable timeframe, it might not make sense to sell goods to people in a particular location. After all, customers will cancel their orders and force you to process returns, leading to a poor business reputation.

If possible, consider establishing a local or close-to-local manufacturing unit. While this won’t make sense for all goods, if your product is small enough to be manufactured elsewhere, this move will reduce shipping times. For instance, many small businesses default to China when it comes to manufacturing.

However, shipping goods to Europe is tough due to long lead times. Establishing a manufacturing unit in Eastern Europe might make more sense. Whatever you pay in additional costs will be compensated by higher sales and greater customer satisfaction.

Needless to say, this issue doesn’t affect you if your product is digital. However, consider the local infrastructure before selling digital products. For instance, does your software require an internet connection speed unavailable in the local area? If so, you’ll be faced with a raft of refund requests and will lose any ad spend you devoted to selling the product.

Planned Scaling

International expansion is a great way to scale your small business, but there are a few boxes you must tick first. The 3 things featured in this article are essential when getting started. Make sure you understand all of them fully before devoting resources to a foreign market.

Comments are closed.