Is it worth expanding internationally? Is it a valid strategy to grow your D2C company? Is it hard? These and more questions worth asking to be analysed and answered.
One of my favourite topics. International / Global expansion. Finding new markets with less competition. But is it worth it? How do you go about tackling logistical, content, customer-service and other challenges? Let's jump right in.
First things first, consider the reasons why you want to expand outside of your home market. Each of these reasons will give you different considerations and expectations of the results. Some of these reasons could be:
This all depends on which mental place your business is in.
Realistically, It's all about acting local. Clients / Customers need to feel you're part of their community. The more seamless the experience, the more you'll sell.
Remember, roads less travelled often lead to the most remarkable destinations. Most of your competitors will be lazy. They will refuse to translate the website and not bother with local campaigns. However, the smaller markets have fewer players. Less players = less competition = cheaper marketing = more margin = more profits. Catch my drift?
People are still people. With that, I mean from a higher level, the same things matter:
On the other side, every culture has its own "specialities". Some cultures care more about ads, others more about peer recommendations. You want to leverage this. As you scale into the market, you can follow what drives your conversations much like you do in. your home market.
This kind of learning you really only do by going to market and as you grow attract natives that can support you on your journey. Isn't this what happens in your home market as well?
One great way to pick a new market, if you're a remote team, is to go to the markets that each of your team members already understands. Maybe you have team members in South Africa, France, or Argentina. These team members can help you create the local feel and help you and the marketing people understand local culture.
Whatever market that is, you want to hammer on what gives you your unfair advantage.
If that is a small market, embrace it. Maybe you can actually dominate that market. If that is a big market, you'll have a lot to scale into. But whatever you do, be deliberate, be thoughtful, be smart.
There are two schools of thought:
As a practical founder, I like the second approach with one big condition: Trying the new market needs to be cheap and fast to market.
Why? Research costs a lot + can give you a painful cost of opportunity. I advise ensuring you have the proper infrastructure to scale internationally lean and fast. That allows you to minimise risk approach to the market without getting sucked in or losing time with endless theoretical research.
We live in the age of cheap translations and automation. Even if you don't have the infrastructure (and you should) to do it on auto-pilot - it's easy enough to use Google Translate or a cheap translator on Fiverr or Upwork. Remember - it's a test. If that test is successful, you can invest in better quality content to really improve the conversions.
Let's try to pick apart what it means to lean into the culture and community. There are a few things that come to mind:
You see, adjusting your strategy for an international market is, in reality, bringing together many, many small markets.
If you have a team member that understands the local market, this part is easy. They will know the language, currencies, payment methods, and marketplaces by heart.
If not, either hire someone who does (even if it's only for a consultation) or roll up your sleeves. What is the local language? How do people pay? Let's be honest; even ChatGPT can probably answer this stuff correctly.
Next, set up your new website and start adding translated products with the right currency. Don't forget you may want to adjust the pricing based on the shipping costs. If you have an ERP with integrated PIM like OneSila this is child play. Otherwise, roll up your sleeves. Remember you don't need your entire range from day one. Grow into it. Test the market first.
When you're done with the products, time to sort out the payment methods. This is a crucial step. Not everyone uses Visa and Mastercard. For example in Belgium people pay with Bankcontact - only few people have or use Visa/Mastercard.
Once connected, connect the new site to the marketplaces if this is part of your strategy. Sticking to the Belgian region, people use Bol.com more than Amazon. Act accordingly.
And that's it. You're done. Time for marketing.
So far, so good. We can sell - but how to deal with the logistics and returns of it all? I mean:
The truth is that you don't actually need to figure it all out. You see, while testing the market, you can simply ship the goods and include your customs declarations. Some platforms like Sendcloud or OneSila will do this for you. Just make sure you ship the goods with Incoterm DDP (Delivery Duties Paid = you pay VAT and duties) instead of the classic DAP (Deliver at place = customer pays VAT and duties). This will allow you to test the market with little to no threshold.
Once you start scaling into the market, you can store your goods locally inside the country or region of choice with 3PL organisations like BigBlue.
That only leaves VAT to deal with. Luckily enough, you don't need to become a specialist as you can use services like EasProject.com, which take the entire complexity of VAT out of your hands pretty much worldwide.
To summarise, selling internationally can seem daunting at first, but once you've dipped your toe in the water, you will likely find this isn't nearly as hard as it's made out to be.
In truth, if you need help - why not reach out? We're happy to help.
Sascha Dobbelaere
Founder