Internationalization: Open up new markets via marketplaces
Since e-commerce has simply revolutionized retail, opening up new markets has never been easier. Especially marketplaces like Amazon, eBay & Co. make internationalization uncomplicated, but that does not mean that there are not a few things to consider. In this blog, we will show you which points you should definitely consider when it comes to internationalization if you are planning an expansion for your company and how marketplaces can support you with this.
Advantages of internationalization
Before we take a look at the relevant parameters of internationalization, it makes sense to first focus on the advantages of expansion. The biggest plus of the so-called “global market” is of course the enormous range. Especially if your local market is already very well penetrated by competition, acquiring new customers abroad can be much easier than in your original market. In addition, you have access to a much larger pool of potential customers. Perhaps the respective country of expansion also has better framework conditions, e.g. increased demand? Should the local sales collapse, spread your entrepreneurial risk by operating in different markets.
What you should consider when internationalizing
Market and competition analysis
Before your company enters a new market, it should be clarified whether it would even be able to survive there. For this it is absolutely necessary to analyze the prevailing competitive situation. What is the approximate market volume? What other competitors are there and what is their market share? Does your product have USPs that are not available from the competition?
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If you sell products abroad, you must of course ensure that they get to the customers. This entails a whole series of decisions: Do you need an additional central warehouse abroad? Do you want to intervene sales partners? Which logistics companies are there and under what conditions do they work? How can you make sure the supply chain is working? All of these questions should be clarified before selling in another country.
Every expansion is associated with costs, which of course differ depending on the scope. Your company must be able to absorb this entrepreneurial risk. Established dealers with a stable customer base usually have better prerequisites for this. As a young company, you should probably postpone expansion and only internationalize your business once it has consolidated its position in the domestic market.
When expanding into other countries, legal frameworks must be taken into account in addition to the geographical framework. The biggest problem area is likely to be regulations that affect the import of goods. Exporting to countries within the EU and / or the so-called Schengen states is usually unproblematic. For countries that do not have a trade agreement with the European Union, however, things may look different. The same applies to certain ingredients and materials: What is considered marketable on the local market does not necessarily have to be permitted elsewhere.
Lidl counts in this country as a discounter and therefore rather in the lowest price segment in the food trade. But did you know that the German company has meanwhile also expanded to Australia, where it is promoting a premium strategy with high-quality, therefore high-priced products? The reason for this is marketing – because the local brand image Down Under was already occupied by other competitors, the expansion took a completely different route. Of course, this is an extreme example. However, before internationalization, you should check whether your existing marketing measures are suitable for reaching the target group locally. If this is not the case, a change of strategy can make sense.
How valuable are the large marketplaces for internationalization?
It is clear that internationalization offers us the opportunity to multiply our sales and profit potential. Of course, this only works if, on the one hand, there is enough interest in your products and offers in the respective target countries and there are no high extra costs that reduce your profit. All in all, it can be said that internationalization can be a really convincing way to improve and intensify your business model. So what could be more natural than to use the marketplaces for test sales in interesting sales countries, even before we start our own shop abroad? Platforms such as ebay or Amazon work globally and across borders, which means that the e-commerce giants already operate country portals for almost all regions of the world and give retailers the opportunity to market their products internationally. Marketplaces offer the ideal opportunity to gain direct experience of whether your products can be sold in other countries. In addition, the marketplaces offer you the opportunity to obtain comprehensive and clear information about the legal conditions that apply in certain countries.
How can marketplaces support internationalization and what are the advantages?
The advantages at a glance:
- Less effort and less risk
- Predictable costs
- Awareness and reach of the marketplaces
- Fast test results for different pricing strategies
- Low technical entry barriers
As the above points show, there are many factors to consider when it comes to internationalization. Marketplaces like Amazon, ebay or the like can help to simplify the expansion considerably. The natural reach of marketplaces is essential here. Instead of having to establish your own shop in a still foreign market, the popularity of Amazon & Co. can also be used for internationalization. In addition, setting up a completely new shop takes a lot of time and it is not guaranteed that it will pay off. The existing marketplaces make it possible to test products in other markets without great risk. Users of FBA (Fulfillment by Amazon) or ebay Plus can also outsource shipping to the marketplaces. This saves a lot of organizational effort, but at the same time causes higher unit costs. Since different currencies are used in international markets and different VAT rates apply, price optimization is difficult. This is especially true if it is to be done manually. And this is where our software comes in. SnapSoft offers a suitable tool with which a targeted price strategy can be implemented on marketplaces.
Price optimization in international markets with SnapSoft
Products are subject to constant price fluctuations on marketplaces – numerous competitors constantly outperform and undercut each other, which is why a one-time set price never generates the optimal margin. SnapSoft allows you to set your own pricing strategies, helps automate pricing and helps you make your expansion as easy as possible.