Selling globally: what you need to know
In 2015 alone, the UK spent £114bn billion online according to the IMRG Capgemini e-Retail Sales Index – and the forecast for 2016 is even better, with an anticipated £126bn to be spent in online stores. Despite this, ecommerce isn’t a mature market. Fifty percent of internet businesses fold in the first year and SMEs are particularly vulnerable. However, dissuaded by the perceived expense of setting up a website, and the fear of failure, many small business owners still focus on getting customers through door at the expense of getting online and opening up their business to a vast global market.
Going online can not only help give profits a healthy shot in the arm but also differentiate your business. It diversifies your customer base, reducing the effects of potentially unfavourable market conditions at home, and consequently giving SMEs the greatest growth opportunities possible.
So, where to start? The to-do list may seem daunting but it actually doesn’t have to be that complicated or costly. The first thing to consider is a website through which to display and sell goods and services. For many small businesses, an off-the-shelf all-in-one package which includes the site plus domain registration and hosting is a good option to start with.
The next big decision is who to choose as a payments provider. While payments may not seem as glamorous as other business priorities, they’re a vital part of any e-commerce strategy.
The first thing you’ll need is a ‘merchant’ account – designed to process online credit and debit card payments – and a Payment Gateway service which settles customers’ online payments into that account. There are countless third party payments providers who will help with all of this. But it’s important to make sure they accept all payment types, including multiple currencies, so that you can appeal to as many customers as possible around the world, in addition to must-have fraud screening and customer support.
Another major consideration is your shopping cart provider. There’s a huge amount of choice but at a basic level you need to work out if you want to host your own payment page or have it taken care of by a payment provider like Worldpay. The most important things to consider are simplicity and security, as well as making sure it’s intuitive and easy to navigate, or shoppers may abandon their purchase. Crucially, it must also comply with PCI DSS, the industry standard for keeping card details secure.
It also goes without saying that all of the above needs to be mobile friendly, so your business can cash in on the growing trend for shopping on-the-go. In recent years we’ve seen a 15% increase in mobile devices being used to make payments through our hosted payment pages.
Now for the legal bit
Online trading also brings with it a few extra regulations you need to comply with, so familiarise yourself with the Distance Selling Legislation, HM Revenue & Customs, Health & Safety and the Data Protection Act 1998. There’s also new European-level legislation as of June 2014 which will mean you need to provide several features. These include a basic rate phone number on the site; a 14 day “cooling off period” where consumers can cancel and get a full return; a clear “Buy” button; a 14-day limit on returns following a cancellation; and no pre-ticked boxes which might incur extra charges.
This might sound like a great investment of time and effort for any small business owner, but with a potential market of £126 billion in the UK alone, the opportunity speaks for itself. Once it’s up and running, your e-commerce business will give you the kind of international reach, scale and differentiation which is virtually impossible in the bricks and mortar world.