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What Does it Take for a Retail Startup to Tap Into a Global Economy?

Pascal Van Dooren

Pascal Van Dooren

Chief Revenue Officer at Avalara
Pascal is an experienced executive in the software and technology industry with a history of helping organizations accelerate growth and deliver exceptional customer experience. Before joining Avalara, Pascal held leadership positions at companies ranging from early-stage ventures to well-established industry leaders.
Pascal Van Dooren

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Global trade isn’t a new concept, but today’s international commerce landscape has progressed a long way from the ancient times of trading spices and silk across the high seas. Internet and online marketplaces, such as Amazon, Etsy, Alibaba and many others, are blowing open doors for retailers to market and sell their products to customers anywhere. While at the same time, consumers are also expressing greater levels of trust and appetite to buy the right product at the right price (regardless of origin), be it sporting goods to fashion to authentic Turkish rugs.

What does this mean for where the retail industry is headed?

Today, online retailers are already boosting sales by 10 percent to 15 percent on average by extending their offerings to international customers.

Even the oldest of economies, like the spice trade, are modernizing in this way. And according to a recent report by DHL, cross-border retail volumes are predicted to increase at an annual average rate of 25 percent between 2015 and 2020 (from $300 billion to $900 billion), which is twice the pace of domestic e-commerce growth.

It’s no wonder that many fast-growing startups and mid-sized commerce companies choose tapping into the global economy as the next logical step to grow their sales and profits. However, while many U.S. retailers have the opportunity to get a global customer base, too often smaller businesses rush to trade internationally without the resources to understand the added complexities. After all, you don’t know what you don’t know.



To be both successful and compliant when trading internationally, startups should take three approaches: do research, seek local expertise and use technology to make doing business easier.

Here are my tips for each:

Do your research

One size doesn’t fit all. Even if you have achieved success selling your product(s) in the U.S., you will need to start the research process afresh before you start selling products in a new market. Do research into the local market trends, develop a plan to execute and talk to prospects.

Businesses tapping into a global economy will need to make sure they can meet local needs. For example, retail businesses that are used to selling yoga pants on Amazon may find that also listing on a niche local marketplace focused on well-being will help them reach the right audience for their product in a new country. Export businesses should do their homework to ensure they find the best fit in a local partner, and adequately train them in their products.

Some markets may also be quite crowded, meaning you may have to rethink what makes your product unique in an international setting. On the flip side, other markets may be very green and unfamiliar with the type of product you’re selling, so consider whether you’re prepared to invest in market education. All of this may affect the way that you market your products, but consider how to strike a balance between brand consistency and local appeal.

The same “think local” rules apply when making decisions about pricing, shipping and more. For example, in Europe, product instructions will need to come in multiple languages, so you may have to consider an increase in packaging cost associated with labeling.

Seek local expertise

First, make the most of the local expertise that’s right at your doorstep. The Department of Commerce is an excellent source of information on foreign markets for U.S. goods and services, yet it’s one that many businesses do not fully tap into for information, contacts and more.

Another key reason that businesses should seek out local expertise is not only to help grow their businesses abroad, but also to protect them. Keeping pace with local regulations can be tricky and extremely nuanced. For example, did you know that German law mandates that consumer data stay in the country? If you’re selling to customers in Germany and collecting personal information from them, that’s the kind of important information you’d need to know.

When it comes to the protection of customer data, product safety regulations, local labor rules and much more, enlisting local experts will ensure you protect your business.

Deploy technology and automation

Managing the flow of goods, provisioning payments and staying compliant is doubly challenging in an international arena. To ease the burden of doing business globally, make the most of available technologies. In particular, automate what you can in order to handle complex business challenges, like managing cross-border tax compliance.

As one example, failing to calculate the total “landed cost” (which represents the total cost of getting a shipment from a buyer’s facility in one country to a customer’s door in another) is one of the top mistakes retailers make when selling across borders.



Calculating a total landed cost manually requires a significant effort to figure out the duty rate for each item, while ensuring the formulas are correct for each destination country. But failure to include the right figures, like customs taxes, could leave you with an unhappy customer if they are later asked to pay additional charges to release the shipment. It’s not worth the complication or risk to your business or brand reputation, or bottom-line sales. Other small businesses have successfully gone international before you, making mistakes and arriving at the need to automate key business processes in order to avoid hassles down the road.

While international markets may be the perfect target for your business, going global requires thinking through the challenges and possible scenarios that could occur so you can be prepared at each step of the way.

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