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Etailers Missing Out On Overseas Cash

Posted by Michael Bloch in ecommerce (Friday January 14, 2011 )

Online retailers in the USA have ranked last in a PayPal study of global e-commerce in terms of their international reach.

According to a report on Internet Retailer, only 14% of U.S. ecommerce merchants’ transactions processed through PayPal came from international customers.

I can certainly understand U.S. merchants being a bit hesitant in selling items to overseas customers; but a lot of money is being left on the table.

This potential bonanza is mainly due to the value of the U.S. dollar plummeting. Back in 2001 when I was really getting into affiliate marketing, 65 Australian cents was equal to one U.S. dollar. Ah, sweet memories.

Looking at today’s currency exchange figures, the Australian dollar is hovering around parity with the U.S. dollar.

This is bad news for me, but good news for Australian online shoppers as it makes purchasing goods from the USA so much cheaper; even with the additional freight costs involved in some cases.

Australian retailers are so concerned about the increasing trend of Australians buying items from U.S. online merchants, some have been pushing for our Goods and Services Tax to be added to overseas online purchases under a thousand dollars. These purchases are are currently exempt from the GST.

However, it doesn’t look like the Australian government is going to do this, so that means U.S. retailers have an excellent opportunity to woo Aussie online shoppers and really clean up.

Back in 2001, online shopping was still pretty uncommon here, but it’s a much different story today; Aussies are buying online in droves and many are happy to purchase from merchants in the USA – if they can find retailer who will ship here.

And it’s not just Australians that U.S. merchants should be catering to – the weak U.S dollar isn’t just in relation to the AUD – it’s pretty much across the board.

However, U.S online retailers should still remain cautious about selling to customers in some countries due to the credit card fraud situation. If you have effective credit card fraud screening strategies in place, these transactions aren’t all that hard to pick up; but it’s probably just best not to cater to customers in high risk countries.

My advice to U.S merchants wanting to attract more sales from shoppers in Australia and other “safe” countries is pretty much the same as PayPal’s – offer pricing options in local currency, post clear information on shipping, costs and return policies. Additionally, landing pages dedicated to people from a particular country will certainly make them feel more welcome and build trust. These landing pages can also act as good fodder in terms of search engine optimization targeted towards online shoppers from other countries who begin their purchasing expeditions via Google, Yahoo and Bing.

Related:

Catering to Canada – Cross border ecommerce handbook



 

 
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