Fulfilled Recap: A Conversation About Expanding Cross-border

In June 2024, ShipBob hosted an event called Fulfilled, bringing together experts in the world of e-commerce and logistics. The event featured Rathna Sharad, CEO and founder of FlavorCloud, Arjun Sofat, a successful merchant from Free Soul, and Enda Breslin from ShipBob, all moderated by Kevin Marvinac, also from ShipBob. This dynamic panel delved into the intricacies of expanding into international markets and selling cross-border, sharing their unique insights, experiences, and strategies to help businesses navigate the complexities of global commerce. With a focus on practical advice and real-world examples, Fulfilled 2024 provided invaluable guidance for merchants looking to broaden their horizons and reach new customers across the globe. 

Why would a merchant look into expanding cross-border?  

Arjun Sofat from Free Soul kicked off the conversation by highlighting the common dilemma many merchants face—analysis paralysis. He emphasized how easy it is to get bogged down by consulting experts, analyzing market data, and assessing metrics like Total Addressable Market (TAM), Serviceable Addressable Market (SAM), and Serviceable Obtainable Market (SOM). “The world is a big place, so where should I go?” is a daunting question for any business owner. 

You don’t need to overthink

Arjun shared that, often, expansion can come down to a gut decision. Being a UK company, he is exposed to American consumerism in many forms of media and recognizes that it is a market his business, products and marketing could gain traction. For Arjun, the excitement about expanding into the US market transcends just its sheer size—330 million people or so—it’s the cultural familiarity and personal connection that drives his enthusiasm. The market is there to address if you are competitive. This blend of instinct and personal experience can often be just as influential as any market analysis when making the leap into new territories. 

Driven by data 

On the other side of the expansion debate, Rathna Sharad, CEO and founder of FlavorCloud, emphasized the importance of data-driven decisions.   Rathna highlighted the ease of testing multiple markets using solutions like Delivery Duty Paid (DDP). “It’s super easy to turn on 200 markets with the DDP solution, for example, and then see what countries are converting best,” she explained. This approach allows businesses to identify their top-performing markets, perhaps narrowing down to a top 5 or top 10, and then optimize their strategies accordingly. 

 Rathna emphasized that conversion optimization is a key theme in localizing the customer experience for different markets. By analyzing which markets show the highest conversion rates, businesses can determine where to allocate their marketing dollars most effectively. This data-driven strategy not only helps in understanding unit economics but also mitigates the risks associated with entering new markets. 

Taking action, is the most important step 

Enda Breslin from ShipBob concluded the discussion by affirming the validity of both approaches to international expansion. He acknowledged the legitimacy of both the gut-feeling, visionary method and the data-driven strategy. “The point is, the barriers to entry have never been so low,” Enda stated, highlighting that it is now possible to succeed with either approach without taking on significant risk. Unlike a decade ago, businesses no longer need to invest hundreds of thousands of dollars to explore new markets. 

Enda cautioned against the biggest pitfall—analysis paralysis. Overthinking the decision to expand can result in missed opportunities and the failure to tap into new revenue streams. He emphasized the importance of taking the first step and choosing the approach that best suits the business. “Both approaches are so valid these days in the context of it being so much easier to expand globally than it was 10 years ago,” he remarked.  

How do you make the decision about which markets to expand in?  

The three all contributed to discussing what helps with making the decision about which markets to focus on for successful expansion.  

1. Recognize Lower Barriers to Entry: Cross-border sales have skyrocketed from 1% to 19% in the last ten years with a trajectory of growth, highlighting the growing ease of entering cross-border markets. If you’re not yet tapping into this potential, you’re likely missing out on a substantial opportunity to increase your revenue. 
2. Utilize Analytics at Your Fingertips: Your website traffic can serve as a valuable indicator of where to expand. If you notice that a significant portion, say 40%, of your traffic is coming from international sources, it’s a strong signal that there is demand for your products in those markets.  Make data-driven decisions using customer acquisition costs, lifetime value data, and other analytics can also be beneficial. These insights can be layered into your conversion optimization strategy.  
3.  Focus on Creating a Great Checkout Experience: A great checkout experience is key to maximizing conversion potential. Ensure that your international customers have a smooth, localized experience that makes them feel comfortable and understood. You can localize language, currency, duties and landed costs and all of this increase buyer satisfaction and increases conversion.  
4. Manage Customs and Duties Effectively: One of the biggest challenges in international expansion is handling customs and duties. Make sure that your products are correctly classified and that accurate landed costs are calculated. Failure to do so can result in a poor customer experience, as unexpected costs at delivery can lead to dissatisfaction. While expanding, it’s crucial to balance your strategies to ensure your margins are not negatively affected. Efficiently managing costs and pricing strategies in new markets will help maintain profitability. 
5. Focus on What You Do Best and Partner for the Rest: Customs and compliance can be daunting and come with high risks, including legal repercussions if done incorrectly. However, this should not deter you from expanding. There are partners available who specialize in these areas, allowing you to focus on your core business and marketing efforts in new markets. By leveraging their expertise, you can mitigate risks and streamline your international operations. 

By leveraging these tactics, you can make informed decisions about international expansion and ensure a successful entry into new markets. 

Conclusion   

In the past, new market launched involved heavy financial investment. Companies needed to set up infrastructure, teams, legal entities. All enormous time and cost investments that could discourage a company from expanding cross-border. Now, with innovation like DDP, you don’t need to set up this infrastructure before proving the market is viable for your company. If you focus on localization, ensuring your complaince and clearance is correct with support from partnerships, and offering customer focused checkout experiences you can successfully test and prove cross border sales.