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How to Make E-Commerce Profit From Overseas Customers

While we all love the ease of selling stuff in our own country and indeed some of us may even be confirmed Euro-sceptics, there is no doubt that a sale is a sale and in the end once someone takes their credit card out to buy something, no-one much cares where the customer comes from. So on the whole most people with an online shop would like to make overseas sales in addition to domestic ones.

However, selling internationally is never going to be quite as simple as selling in Britain, since for a start you will need to watch out for things like tax, shipping and sadly online and credit card fraud. Also from the customers point of view your credibility must shine out like a beacon.

Selling from the UK to foreign parts is not a hard as it might seem though, since we have the advantage of the fact that the UK still has an excellent international reputation. Perhaps it stems from the old British Empire days but it does give most UK businesses a bit of an endorsement; so do make it clear that you’re based here and if you are selling something typically English make sure you get known in the USA, where they have an insatiable appetite for British memorabilia.

Good marketing is often the key to successful overseas sales. The internet is an amazing communications medium, so obviously its biggest impact is going to be in the area of international trade. The best news is that much of the same expertise needed to get visitors from the UK to check out your site, such as search engine optimisation or pay-per-click advertising will be equally effective in attracting overseas visitors. Gone are the days when you had to leave the comfort of your own office and climb on a cramped plane to pull off deals; in the main overseas marketing has become a walk in the park.

Shipping abroad is easier than you think. Many e-commerce merchants do it all the time with very few problems. Using well-established reliable major carriers will greatly reduce the hassle and they can advise you of any issues or complications. A customs declaration must be completed, but this should not pose a problem as long as what you are selling is not illegal in the country that you’re shipping it to.

Unfortunately like every area of life these days, e-commerce can be bound up in a bundle of red tape, rules and regulations, one such area is the question of tax. It’s your responsibly to comply with the law both in countries in the European Union and those outside the EU.

As Britain is in the EU so we are bound by EU rules and that is not the same as when handling US customers. The US might want to charge sales tax on your sales, but it’s their responsibility. You don’t have to charge this “use tax” which is between the buyer and the state where they live. So as a UK business you can sell into the US tax free.

Normally when you sell into the EU you charge VAT at your usual rate, but there are some exceptions. For instance if your online store makes a fair amount of money selling into other EU countries, you may hit some additional regulations. If for example you exceed the individual VAT threshold for Germany, France, etc. you should charge VAT at the appropriate country VAT rate when selling into that country, not the usual UK 17.5% rate.

If your customer is a non-UK business in the EU and is registered for VAT in their own country, they are allowed to quote their VAT registration number to you in order to be exempted from tax. If you can’t do this properly those customers are likely to look elsewhere.

Customs and import duties are another area that you must be quite clear on. Most retailers leave custom or import duties to the purchaser. They are responsible for any of these charges, so you can ignore them. However, it is worth making it quite clear in your terms and conditions that any charges are down to the buyer. For the wholesale market however there are different procedures, so you would need to check these out thoroughly if you are planning to operate in this area.

Payment issues must be sorted out and shown clearly on your site but don’t get too stressed out about it all. Your card company will automatically translate currency into pounds and that is what will appear on your statement, with the original currency and amount as a small note item.

When people buy online they can pay by credit card and you will be paid in sterling, but the payment will be translated into their local currency when it appears on their statement. Therefore there’s no need for a multi-currency system in your web store. This said, it is never the less useful to have a conversion facility so that you can provide an indicative amount in prospective buyer’s local currency.

Fraud is one of the biggest potential problems you might encounter when selling abroad. It’s certainly proven that orders from some countries seem to be much more risky than others but usually ones from Western Europe and North America are considered to be the safest bet.

The hard fact is that any orders from abroad are more likely to be from crooks simply because it’s easier for them to get away with it. Annoyingly, the police in this country are not particularly interested in small scale fraud and even less so when the crime is committed outside their own patch. So you will need to be extra guarded when selling abroad.

Fraud can be an unpleasant experience that affects the online store owner in lots of ways. For example if the buyer was using stolen credit card details the amount is likely to be charged back to you, once the true owner becomes aware of the charge and the final blow is that the goods you sent long gone, never to be traced.

Be aware also that even a customer who puts in a genuine order and has received the goods can dispute the charge and then hang onto the goods. As a merchant, it’s hard to fight charge backs and there’s virtually no come-back for you.

Some indication of intentional fraud is the tendency to choose the most expensive products with the most expensive shipping method available and the option of using free email addresses such as Yahoo or Hotmail

To check whether an order is fraudulent try asking for a fax of a copy of the back strip of the credit card, ask for proof of name and address or make a call to make sure that the phone number is genuine. Many fraudsters give up at the first sign of suspicion and you won’t hear from them again.

Finally, when everything is legally in place get on and tell the world about your store bearing in mind that anything that adds to your credibility will help pave the way to success. So on your site don’t just list what you sell also show quite obviously that you comply with all the right legal and tax regulations.

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