If you’re thinking about expanding your business and selling abroad, congratulations! But unless you’re prepared, this is an area where it’s easy to make mistakes (and costly ones, at that).
Do your market research
You’re looking to sell to different people in different places at different prices. Sorry; all that original market research you did for selling in the UK is mainly irrelevant.
Look at costings, competition and demand before you decide where and what to sell and how much to sell for.
If you’re not sure how to go about this, never fear! The Government has some great advice, providing links to useful resources for researching export markets and finding overseas customers and export opportunities.
Consider selling through an online marketplace (at least at first)
Online marketplaces like eBay can allow you to test out the international market for your products and can make things a lot easier initially, giving you guidance on selling abroad and pre-filled options for pricing and shipping etc.
Check you understand your VAT obligations
Whether you have to charge VAT on what you sell abroad will depend on your business status, what you sell, who you’re selling to and where they are. See the HMRC guidance on this for advice.
Check you understand import and customs duties
Again, these vary depending on what you’re selling and where your customer is. While many retailers put the onus for paying these costs onto the customer, if you do so, make sure you’re made it crystal clear in your terms and conditions and within the purchasing process.
There’s little that makes a customer angrier than unexpected costs. Read the Government guide ‘Import and export: customs declarations, duties and tariffs’ to make sure you get it right.
Consider your shipping options and costs
If you’re just selling a limited number of small items to customers abroad, posting them through Royal Mail may be ideal. But if your merchandise is large or you’re selling in bulk, then think about using a recognised international carrier. Check your costs and make sure your selling prices and profit margins can remain realistic.
Consider currencies and conversion
Letting customers see prices in their local currency seems a good idea, but whatever you do, don’t convert your prices with no thought of shipping costs or export duties or leave them static. Exchange rates can change dramatically overnight and static prices could leave you seriously out of pocket, so set up your website so that alternative currency prices are recalculated in real time.
Pick the payment options you offer carefully
Ensure you’re accepting a range of card payments and offering a highly secure way to pay. A payment gateway is a great way to do this and while there are a range of options now, PayPal remains one of the most tried, tested and trusted, allowing you to accept payments in more than 200 markets in 25 currencies.
Consider your international returns policy
Will you offer free returns, and how much might that cost you? If your items are expensive to ship, ultimately it may be easier to offer refunds (or replace items without requesting the original faulty item is returned). Think carefully about the costs, your current UK returns rate and what your competitors offer.
Set out clear delivery expectations
Do your research so that you know the window in which customers in each country can expect their order to arrive. If you use more than one shipping service for a country, ensure that before the checkout process is complete, your customers know which company will be shipping their goods and when they can expect them.
Think about customer support
Will you create professionally-translated versions of your website? If not, will you translate your terms and conditions into other languages? What will you do if a customer emails you a query or complaint in a language you don’t understand?
English speakers are in a privileged position worldwide—because it’s the most understood language worldwide. While it’s only ranked third in numbers of native speakers (around 378 million), 743.5 million non-native speakers can also speak English. This means most people visiting your UK-based website will have some degree of proficiency in English. But some won’t, so ensure you’ve made provisions for them.
There’s a lot to think about when you sell abroad, but don’t let yourself be overwhelmed. Read through the Government advice carefully and seek the advice of an accountant if you’re still not clear about the financial implications and obligations of international selling.