We’re discussing the shift of online buyers toward countries and languages outside the United States and the implications this global business trend has on your solo operator small online business.
Here are a few more things you’ll want to think about as you contemplate the coming years and the non-U.S. marketplace.
3. Most of the research that has been done regarding online buyers only takes into account those who have already proven themselves as buyers, in other words, they’ve previously made at least one purchase online.
But what about the millions and millions of potential buyers there are in those that are: (1) new Internet users all over the globe that are just now getting, or will in the near future have, access to the Internet, and (2) not yet online buyers but will become such in the future?
4. Most statistical researchers counting online buyers are considering one potential buyer per computer terminal. In the U.S., there are many households that have both multiple buyers and multiple computers, each with access to the Internet. However, in many other countries, especially those in Asia, India, the Orient, and China, there may be many potential buyers that share a single computer. If that’s the case, the true number of online buyers may be grossly understated. Some have guessed that the figure could be in the billions within five years.
5. There are technologies that exist today that allow automatic translation of languages. This industry is still young and undeveloped compared to what it will be in the future. Very often today’s automatic translation software produces a nearly unrecognizable and funny product. But as this industry matures, there will be efficient and cost effective alternatives available to even small business owners.
Speech recognition may be even a better alternative than the translation of the written word. An audio file, or even a live voice can be spoken in one language and the receiver will actually hear the dialogue in his native tongue.
6. There are certainly security issues with making financial transactions across country borders. I have a friend that does a booming eBay business that will not accept orders from outside the United States. She says there are too many problems with financial transactions and product deliveries. The infrastructure for accepting and sending payments is often weak and security features that are standard in the U.S. (like name and address verification by the large credit card companies) are generally lacking in most international sales transactions.
There are also foreign exchange challenges as the world’s currencies are always in a state of relative daily flux when compared to one another.
7. There are challenges with tax as well. Small business owners today have it easy since there is no special tax on e-commerce. The buyer is basically responsible to report his out-of-state purchases on his personal income tax (at least that’s the way it works here in Utah.)
But in the future, there is a good chance that small businesses will need to take some responsibility (as yet undefined) for this revenue collection and reporting. How will the business tax foreign customers? Right now, taxation is not much of an issue for Internet businesses, but it will most likely become one in the future.
8. There are also cultural challenges and obstacles that exist in making sure your products are appropriate for non-English markets. There exists today both consultants and companies that you can employ to review your practices and products to make sure they are not offensive to buyers in other cultures.
9. Think about the challenges that will exist for companies that ship physical products. Ah, to be a solo operator and be able to send your products digitally! The challenges of both (1) expense to send a physical product outside the U.S., and (2) delivery in making sure that the customer actually receives what he has purchased online, are major hurdles to overcome if your business is going to deal internationally.
10. Also think about the implications of foreign currency exchange and how that might affect your profits, return on investment, and your willingness to deal in certain currencies that fluctuate greatly or are at times very unstable.
I have never shipped products internationally, my sales have been targeted to the U.S., but there are lots of companies in the U.S. that refuse to do it because complaints of fraud and abuse are so rampant in places like Asia, India, parts of South America, China and Russia.
Well, these are just a few of the challenges of executing e-commerce globally. No doubt technologies and systems will be available in the near future that will overcome many of these issues. It’s certainly not to soon to begin thinking about and planning your solo global business strategy.
To your online business success!