Key considerations to take your e-commerce business global


Understanding what to expect when planning your globalisation journey.

Taking your business global could be the opportunity to increase revenue potential. However, what can you expect when you begin your journey?

Knowing what the road ahead to globalisation will potentially hold in key areas of your business can help give you a much-needed advantage from someone who’s already experienced it.

We spoke to James Day, COO and co-founder at Mous, who develop innovative cases for tech products, about their experiences and lessons learned about going global.

A little bit about Mous

Mous has been successful in establishing a large global market, but that’s come through hard-earned learnings across areas such as manufacturing and logistics. They have now worked out a system and gotten the balance right for their business - something that every company has to do for themselves that is industry and product dependent.

The key question, like many, as they expanded globally was how to minimise tax and shipping costs to maximise their margin. In the case of Mous, they now have two warehouses – one in New Jersey (for their US based customers which is their biggest market) and one in Milton Keynes (the UK is their second biggest market). They chose China for their manufacturing as well as continuing to scale with Shopify and those decisions have worked out to be the most cost effective.

“You have got to make some choices, finding your stride with what works for your business is a natural evolution as you progress,” says James, “If you are a higher value product, it can get more complicated, but you need to look at your global system in a few key areas: warehousing/shipping, your finance team and data/marketing management.”

Warehousing and shipping

As James said, look to your warehousing and shipping model first. He advises, “You don’t need a warehouse in every area, the right warehouse in one country should suffice. You should be looking for a medium-sized warehouse that has an optimised courier offering which ships globally and that understands e-commerce specifically. Don’t go too small or too big either – too small and you will have to make a change again soon and too large gets expensive.”

Knowing your strongest market and how your business goals play into that is key.

In terms of shipping, James believes rather than average order value (AOV), its more about getting control on whether your goods should be sent Delivery Duty Unpaid (DDU) or Delivery Duty Paid (DDP), although in some cases, you may be geographically dictated as some countries won’t accept certain methods. Understanding and managing shipping costs, as well as the cost to the customer, keeps the margin better controlled and more advantageous overall.

Determining which courier is best suited or can optimise your shipping pipeline can become complicated but needs to be addressed. “We think Global-E Online is a good partner for globalisation of shipping. They effectively take over your checkout and payment methods and tell you how best to send your goods, optimising the whole process for you. They can really help when you are confident in your business model and what will work for you,” James explained. However, James offered that Shopify has add-ons that can manage your shipping as well. Shopify is well-optimised and although there are cheaper options out there, it can outweigh any cons. Knowing what will suit your business in order to standardise the customs process is crucial. James offered one other early-stage tip, “If you are trading in the US but are based in the UK, press your bank for a UK-based account in US currency – it has been really useful for us.”

Your finance team

You will need to assess what kind of finance function your business needs, in the short and medium term – will it be a basic/core accounting function or more involved to drive your strategy with deeper insights?

James says, “Growing internationally really depends on your budget. Knowing your metrics and how this affects your budget is key; this will help you make the right decision about what kind of finance function you want if going global is your intention. In our opinion, we believe your finance person should be an absolute hustler and have strong Excel skills. There were a lot of challenges for us to set up shipping to so many locations so having finance support that was building good, automated processes as we scaled was essential. Outsourcing support initially makes sense but at a certain size, bringing some of your finance function in-house helps to manage things more closely.“

James also recommends looking for finance support that has relevant experience – for Mous, international, consumer goods e-commerce experience was key to getting the right processes and systems set up to manage the volume and complexity of data. That can prove useful as you grow your international customer base and they need to have more than just B2B experience. He goes on to say, “They need to have experience with large transaction volumes, that is essential – you need to have someone who understands what that feels like.”

Marketing and data management

Understanding your data and using that to drive your marketing is extremely important. “Keeping your digital marketing organised and aligned with your metrics will then drive your decisions. Having a good grip of sales data, average basket for geographic areas and your repeat purchase rate (which is the most important metric in an e-commerce business we think) all empower you to understand the strength of the business. Tracking that data on a weekly basis should be fundamental from an early stage. Use it to make the right decisions on how you scale,” James advises.

Equally, invest in your team. Think about how they can transition as the business grows James says, and not just hiring entry-level. More experienced hires are worth the investment as they add much needed value and understanding.

When looking at using social channels, use ad managers to get the best for spending on global audiences. Your digital marketing presence will drive your business globally James advises. “Be sure to use A/B testing and potentially build your own attribution model to measure your engagement levels across all platforms – this is essential to understand spend on international reach in your global marketplace.” Testing is critical to understand what works better.

James says knowing your contribution margins by region (revenue less costs of sales and variable costs and digital marketing spend) and understanding that breakdown can help your business focus where is most important.

Advice from hard-earned experiences

“Be data-driven, its sound predictable but necessary. To avoid data mistakes, have visibility of all core metrics which you need to define and be on top of early on.” James advises. He also suggests thinking about a custom-built website. “Cheaper, quick start versions only ended up being a waste of time and money.” One final piece of advice when thinking about warehousing, James recommends similarly to creating a website, “Don’t go with the cheapest – be sure the courier’s offering is exactly what you need. We learned that the hard way.”

So, knowing all of that…are you ready to go global?

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