June 5, 2024
4 Strategic Priorities for Reducing Risk and Ensuring Success in International Markets
Maze recently partnered with FlavorCloud with the joint ambition of supporting merchants in international markets. This article involves an interview on why Maze and FlavorCloud make a good partnership and how they aim to achieve that.
Expanding into international markets is a crucial step for ecommerce merchants looking to achieve significant growth and reach new customers. With global ecommerce sales continually on the rise, tapping into these markets offers excellent opportunities for revenue expansion and brand recognition. Revenue projection in international ecommerce is nearly US$ 4.8 trillion for 2024. However, the journey to international success is fraught with challenges, especially in areas like international shipping and logistics.
Maze knows this well. Led by industry veterans and enterprise brand operators, they help brands to optimize their backend engineering, understand and activate their data and drive strong growth both in the US and internationally. They understand one of the most significant hurdles in international expansion is managing the intricacies of international shipping. Without a robust and reliable partner, merchants can face numerous challenges, including high shipping costs, customs delays, and complex regulations.
Recognizing these difficulties, Maze sought out solutions to simplify and streamline this process. FlavorCloud, a company renowned for its merchant-centric approach and seamless integration with Shopify, piqued their interest.
“FlavorCloud had been on our radar for a while, but recently they've added significant leadership talent from Shopify and other tech players while elevating their product to scale up market in a Shopify-native experience" says Nick Thomson, Head of Partnerships at Maze. "Their commitment to merchant success aligns perfectly with our mission to support enterprise businesses in achieving stable and sustainable growth."
The Promise and Perils of International Markets
The opportunity for e-commerce merchants in international markets is immense. FlavorCloud data indicates that when international options are available at checkout, merchants see an increase of 20-60% higher conversion and a 128% higher gross merchandise value (GMV) than domestic.
However, while the opportunities are significant, so are the risks. Without careful planning and strategic partnerships, merchants may face challenges, including high shipping costs, complex customs regulations, and unexpected penalties that, at the most extreme, can involve jail time! To successfully expand into international markets, merchants must navigate these risks effectively to maximize their potential for success.
Here are the top 4 strategic priorities that support global expansion:
Priority 1: Understand Your Market
Understanding market demand is the first strategic priority for reducing risk and ensuring success in international markets. Shopify's recent Q1 2024 financial report stated cross-border gross merchandise volume (GMV) saw a 15% increase, underscoring the growing consumer demand for international shopping. Merchants need to identify which markets offer the most promising opportunities. This involves conducting market research to understand consumer behavior, preferences, and purchasing power in different regions.
Start by analyzing the top trade lanes internationally, which typically if you are based in the US include Canada, Great Britain, Australia, Denmark, and the Netherlands. These countries are not only major players in the global economy but also represent significant ecommerce markets with established infrastructure and high consumer spending. Understanding the dynamics in these markets can provide valuable insights into where to focus expansion efforts.
Helpful market research can include:
- Data Analysis – Use available data from industry reports, market research firms, and trade organizations to gauge demand in different regions. Look for trends in consumer behavior, popular product categories, and competitive landscapes.
- Traffic Analysis – Review your existing traffic to access untapped markets.
Using delivered duties paid (DDP) is an easy way to test new markets. With no risk to your existing markets, you can start at 1 or 2,000 daily order volume with no increased cost.
Competitive Analysis - Study your competitors who have already entered these markets.
- Decide on Market Spend – Research markets with the highest growth potential and set profitability goals and spending limits to maximize impact.
By thoroughly understanding market demand, merchants can make informed decisions about which markets to enter, tailor their marketing strategies to meet local needs, and mitigate risks associated with international expansion.
An example of how FlavorCloud has supported merchants in this can be read in How Animalhouse Fitness Used FlavorCloud Analytics to Become a Multinational Company
Priority 2: Navigating customs and compliance
Effective customs management can significantly impact both cost savings and operational efficiency. Merchants often hesitate to enter new markets due to the complexity and opaqueness of cross-border regulations or costs. Leveraging a robust customs network can decrease costs by up to 30% and de-risk the process, making it a vital aspect of a successful international expansion strategy.
An important consideration with partnering for your customs management is the roles and responsibilities of your partner. For example, there is a significant benefit in using a third-party representation as an Importer of Record (IOR). An IOR acts on behalf of the merchant, handling all necessary documentation, compliance issues, and regulatory requirements. This service not only simplifies the import process but also reduces the risk of costly delays and penalties associated with non-compliance. By entrusting customs management to an experienced partner, merchants can focus on their core business activities while ensuring that their products move smoothly across borders.
"This is where FlavorCloud really stands out as a partner for Maze. International customs and compliance can be scary and complex for merchants. When using a service like FlavorCloud, merchants can focus on their business and know that both they and their buyers will not have to deal with any hassle. FlavorCloud handles the complexity."
Nick Thomson, Head of Partnerships at Maze
Examples of support a strong customs network includes:
- Managing hazardous goods. Different countries have varying regulations concerning the importation of hazardous materials, and navigating these rules requires specialized knowledge. A robust customs network can help merchants classify and handle these goods appropriately, ensuring compliance with international safety standards and avoiding severe penalties or shipment rejections.
- Automated classification systems streamline the process of categorizing products according to international tariff codes. Automated systems reduce human error and increase efficiency, ensuring that products are correctly classified and duties are accurately calculated. This automation can lead to significant cost savings and reduced administrative burdens.
- Managing customs disputes or delays. If using FlavorCloud’s prepaid duties and fees option (DDP shipping), the customs and customer service team handles all issues that may come up and makes sure your buyer does not have surprise fees at delivery.
By prioritizing effective customs management, merchants can minimize the risks associated with international shipping, avoid unnecessary costs, and ensure timely delivery of their products.
Priority 3: Localization & Ensuring a Seamless Checkout Experience
Ensuring a seamless checkout experience improves conversion and creates a better experience for buyers. Localization plays a crucial role in this process, allowing merchants to cater to the preferences and expectations of customers in different regions. By tailoring the shopping experience to local markets, merchants can significantly reduce cart abandonment rates and increase conversion rates.
One of the key aspects of localization is displaying prices in the local currency and showing accurate shipping rates. This transparency eliminates confusion and reduces friction during the checkout process, leading to a more positive customer experience. Offering multiple payment options that are popular and trusted in each market further enhances convenience and encourages customers to complete their purchases. Maze knows this well with their successful integration of Shopify Pay across other major ecommerce platforms including Salesforce Commerce Cloud.
Perhaps most importantly, offering guaranteed global delivery promises instead of estimates can significantly improve customer satisfaction and trust. As Nick Thomson explains, "A lot of competitors only offer estimates, which means the merchant and buyer must deal with paying the difference at some point in the journey. This makes it hard for the merchant to accurately predict costs and creates a negative experience for the buyer. FlavorCloud’s guarantees at checkout make a big difference." By providing guaranteed delivery timelines, merchants can instill confidence in their customers and differentiate themselves from competitors.
Priority 4: Customize to Your Business
Every business has unique needs and requirements, and working with partners that are resilient and adaptable is essential to success in global expansion. By tailoring your strategy to fit your business, you can optimize efficiency, streamline operations, and maximize growth opportunities.
At the enterprise level, common customization are:
- Integrating international market solutions directly into your selling platform. Whether through applications or APIs, seamless integration ensures a smooth and cohesive experience for both merchants and customers.
- Robust returns management with full reverse logistics capabilities. Providing customers with hassle-free return options not only enhances their shopping experience but also builds trust and loyalty.
- Enterprise-level businesses often require robust B2B support to cater to the needs of wholesale customers and distribution partners.
- Integration with third-party logistics (3PL) providers for order fulfillment, reduces shipping costs, and improves delivery speed and reliability.
Conclusion
Expanding into international markets presents unparalleled opportunities for ecommerce merchants seeking to achieve significant growth and reach new customer bases. Maze recognizes the immense potential of international markets and are committed to helping e-commerce merchants capitalize on these opportunities.
By partnering with logistics companies like FlavorCloud, who possess the expertise and capabilities to navigate the complexities of cross-border commerce, merchants can focus on their core business activities and drive sustainable growth. With the right strategies and partnerships in place, merchants can seize these opportunities, connect with customers worldwide, and achieve unprecedented levels of success.
Together with partners like FlavorCloud, Maze is committed to helping merchants navigate the complexities of international commerce and embark on a journey of growth and prosperity. With international sales revenue expected to show an annual growth rate (CAGR 2024-2029) of 9.49%, this market will just keep expanding. Go global in only a few hours with FlavorCloud and Maze.
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Hannah Storrs
I am a Senior Content Strategist with a deep passion for writing, I specialize in creating engaging and informative content for both internal and external audiences, focusing primarily on e-commerce and logistics. I develop resources that are not only insightful but also accessible and approachable. My goal is to help people navigate complex topics with ease, providing clear and concise information that empowers them to make informed decisions.
