More than just a website, e-commerce ensures your business is always open for trade in the global marketplace. Find out how it can benefit new and existing exporters alike.
One image that comes to mind when people think of e-commerce is a pyjama-clad eBay seller who has just sold a rare stamp from Liechtenstein. Fortunately for businesses, selling online is more sophisticated and can be a rewarding way to start an export income or to complement existing sales.
E-commerce is a system that enables buyers to research, order and pay for goods, and sometimes services, online. The platform now sees suppliers from many different industries offer their wares—from fashion to food, furniture to fridge magnets—almost anything can be sold online.
For beginners, the internet provides cost effective options for selling overseas. Mohammad Khan, international business development manager (NSW/ACT) at Australia Post says it leapfrogs a lot of the traditional legwork. “With e-commerce you can test one market and take it to other markets with very little expense. You don’t have to spend time and money getting on a plane.”
Michael Durie, marketing consultant at Australia Post, believes the internet benefits new exporters because it reduces obstacles for businesses. “What e-commerce does is close the distance and creates a 24/7 market environment. This gives access to countries they never had access to before,” he says.
E-commerce allows the business to control every part of the supply chain, from inventory management and payment to fulfilment. This means if part of the chain isn’t working, the business has the flexibility to change things before it dampens sales. “The beauty of e-commerce is you can change things quickly: you can take a product out and put in a new product, or put in a message that the product is not available,” says Khan. “Inventory is essential in overseas markets; if you do not deliver, you lose trust.”
However, control means that the business is responsible for the infrastructure—the inventory, payment and delivery mechanisms—to manage sales. “It’s one thing to say ‘let’s build a website’, but that’s only a small part of the equation. You need to have all the infrastructure in place so everything works smoothly,” says Durie.
His advice: start small but scale. “Successful companies build incrementally and make sure they can scale things quickly. Then they can expand into numerous markets rather than one market at a time.”
Another way to build a market is to use a familiar channel, like a shopfront on eBay, then expand from there. “When you go into a new market, it’s wise to use those [channels] and then once you’ve built a reputation, you can have your own website,” says Khan.
Selling through a website can be a good way to complement existing trade for existing exporters. “Some businesses have e-commerce, plus the distribution network and retail network,” notes Khan. He says seasonal businesses use e-commerce to complement domestic sales. “Look at ugg boots: during winter in Australia sellers can concentrate on domestic sales, but as the US goes into winter, they can concentrate on that market.”
Dilip Rao, managing director of online payment gateway Paymate, says an online presence may even expand your existing distribution network. In countries like China where there are several markets rather than one homogenous market, an exporter might distribute to one region to test the market. “If you start with one and also sell online, then suddenly realise you have business in two or three other regions, that’s where you can extend you distribution.
“It can also get you into countries where you didn’t think you had demand. Japan, for example, has a lot of sophisticated buyers online, but it’s a tough country to set up shop. You might get online orders and then you can justify the investment to set up shop.”
Having an online channel may also help with marketing. By collecting data from various regions you can see what’s popular and tailor your promotions accordingly, whether through your website or your existing distributors.