With the Canadian dollar at a low level, now is the perfect time for small businesses to look beyond our borders for growth opportunities.
Canada was the fourth most popular online shopping destination across the U.S., U.K, Germany, Australia, China and Brazil in 2013. These six markets alone combined purchased $6.4-billion worth of Canadian goods and services in 2013 and in three years' time, cross-border sales for Canada will be almost double at $13-billion according to a Modern Spice Routes study.
By targeting your online crossborder sales to these six markets, you open up a massive amount of potential. Research also shows that international shoppers spend twice as much as those who only shop domestically.
Yet despite the benefits, only about 20 per cent of small businesses in Canada are online, and few of them engage in cross-border commerce. This means a vast majority are missing out on sales and customers.
International customers want our goods and services and are buying from us across industries ranging from fashion to electronics, automotive parts and digital goods. For example, Vancouver-based Whistle & Flute Clothing reached out to international markets in 2013 and now sees 60 per cent of its sales from overseas customers. Another great example is Penzu, a Canadian cloud-based diary platform, which started as a small idea in 2009 and has grown into a lifestyle embraced by 1.1 million registered users in 170 countries.
'Going international' used to be a daunting prospect requiring small businesses to establish a physical presence in the target market via appointed agents or local representatives but now international e-commerce brings opportunities to help you find new markets for your products.
Before you start, research your target market thoroughly. Is there demand, or a gap in the market for your product or service? Search overseas websites for how much your competitors are charging. Determine how what you offer will compete with a local champion.
Consider whether it's best to build your own website or initially sell via an established online marketplace. Sites like eBay and Etsy often give you better reach for lower cost. They allow you to test demand for your products and experiment with different offerings. Check if there are other online marketplaces that may be popular in your target market.
If you choose to build your own website, list your products in local currency or a popular currency like the U.S. dollar. Make sure you choose a secure and reliable global payments provider that helps you accept international payments. While people are increasingly more confident about shopping from foreign websites, security and non-delivery of goods are still top concerns. A secure and trustworthy digital wallet that lets buyers choose between their debit card, credit card or bank account offers international shoppers flexibility and greater confidence to buy from overseas sellers.
Potential customers need to have confidence that the goods they pay for will be delivered, and that they can easily return them if there is a problem. If you address these concerns proactively, people will be more likely to buy from your site. Shipping and return policies should be clear and easy to find on your website. Include charges and estimated delivery times for the country you are selling to. Clearly state all costs in advance. Stating a total price that includes delivery costs plus likely duties will help enhance customer trust. Offering free return shipping or free shipping once the order reaches a certain threshold encourages sales.
Finally, ensure that your website is easy-to-use and mobile friendly because mobile commerce is growing at three times the rate of e-commerce around the world. Increasingly people are using their smartphones and tablets as their primary Internet access device.
The world is knocking on Canada's door. Business owners just have to open it.
Cameron Schmidt is responsible for driving the growth of one of PayPal's largest markets in the world. He is focused on driving payment innovation and accelerating the growth of commerce in Canada.