Traditionally, VARs used to operate locally, selling customized products to end users from third-party suppliers. In the 21st century, however, the domain of Value Added Reselling is no longer restricted to local markets; rather, with an enterprising mindset, VARs have become an essential constituent of cross-border eCommerce. With expanding opportunities and a rapid increase in international business transactions, the future for scaling a business globally is brighter than ever.
Table of Contents
- The global market opportunity
- The challenges of cross-border eCommerce
- What is the role of B2B eCommerce platforms in cross-border business expansion?
The global market opportunity
Research suggests that the cross-border eCommerce market is expected to reach a value of 2.25 trillion U.S. dollars by 2026. In 2019, the cross-border online shopping sector was valued at roughly 579 billion U.S. dollars.
These figures seem like an invitation for VARs to initiate cross-border eCommerce through an online store. However, going global comes with a set of challenges that must be overcome to establish a successful, multi-vendor eCommerce business.
The challenges of cross-border eCommerce
Cross-border eCommerce is growing in popularity as businesses look to expand their reach and tap into new markets. However, it can be difficult to succeed in cross-border eCommerce due to the many challenges involved. These challenges include poor understanding of the local market, dealing with different payment and shipping methods, and complying with local laws and regulations.
VAR businesses that want to succeed in cross-border eCommerce need to be aware of these challenges and be prepared to overcome them. They also need to understand the local market well, including the cultural differences and how business is done locally.
By understanding these aspects, businesses can create a strategy that will help them succeed in cross-border eCommerce.
Lack of localized experiences
When it comes to cross-border eCommerce, one of the biggest challenges is the lack of localized experiences. This can be a major barrier to entry for many businesses, as it can be difficult to understand the nuances of a foreign market.
Online shoppers in different regions have different preferences and needs.
To sell products to customers in another country, it’s important to take into account the differences in language and culture. If you don’t have a good understanding of these differences, it can be difficult to provide a good customer experience.
Marketing issues can curtail the growth of an eCommerce business in a new region. As businesses expand internationally, some of the challenges may be:
- Different marketing strategies are required for each country: Every country has its consumption patterns and responds to varying demands. Strategies need to be formulated based on the standard of living and per capita income of the country. It is important to devise strategies that cater to their diverse preferences, demands, and requirements.
- Different consumer behavior in each country: Consumer behavior depends on culture to a large extent; a missing cultural sense can pose several unprecedented problems for eCommerce.
- Monitoring the market: The eCommerce entity can face threats from the competition in both international and domestic markets. It is important to understand the market and the industry closely for a successful giant leap.
- As an outsider, you lack knowledge: There are numerous factors at play while conducting business in another country. As an outsider, an eCommerce entity faces many challenges due to negligible knowledge about the local markets that might help them procure raw materials and labor at a better quality and a cheaper rate.
It is for these reasons that thorough research is mandatory to enter into a cross-border eCommerce market and successfully prosper among local competitors.
There’s no doubt that cross-border eCommerce is on the rise. However, with this increase in opportunity comes many challenges, one of which is pricing.
As a value-added reseller, you are responsible for setting the price of the products you sell. This can be a challenge when selling across borders, as you need to account for many different factors.
There’s no doubt that cross-border eCommerce is on the rise, but that doesn’t mean it’s without its challenges. One of the biggest challenges faced by businesses engaged in cross-border eCommerce is pricing.
Value-added resellers (VARs) have to contend with the challenges of setting prices for their goods and services that are competitive in both the domestic and international markets. They also have to take into account the different costs associated with doing business in different countries.
Another big challenge faced in cross-border business management is getting paid timely. In many cases, international payments can be complicated and expensive. This can make it hard for businesses to offer their products and services to customers in other countries.
There are several other challenges as well, such as taxes, duties, and regulations. All of these need to be considered when pricing your products for cross-border eCommerce.
Change in currency
Another great challenge for worldwide eCommerce is currency exchange rates. These can fluctuate rapidly and can have a big impact on your margins. You need to constantly monitor the rates to ensure you are pricing your products correctly.
Another challenge is shipping costs. These can also fluctuate and can be hard to estimate. You need to account for them in your pricing, but you also need to be aware that they may change before the product is shipped.
The increase in online transactions has also led to an increase in cyber fraud. Fraud is among the biggest challenges businesses engaged in cross-border eCommerce are currently facing.
There are many reasons why fraud is such a problem in cross-border eCommerce. First, it is difficult to verify the identity of someone who is located in another country. This makes it easier for criminals to commit fraud. Second, cross-border transactions are often conducted in different currencies, which can make it difficult to track and trace payments. Finally, cross-border eCommerce often involves goods that are shipped long distances, making it harder to recover lost or stolen items.
Despite the challenges, there are some steps that VARs can take to protect themselves from fraud. First, they should carefully screen all orders and check for red flags such as suspicious shipping addresses or unusually large orders. Second, they should use payment gateways that offer fraud protection services. Finally, they should consider shipping insurance to cover the cost of lost or stolen goods.
By taking these precautions, VAR businesses can protect themselves from fraud and continue to enjoy the benefits of cross-border eCommerce.
One of the biggest challenges for cross-border eCommerce is managing returns. This can be a major headache for online retailers, as customers may be located in different countries with different return policies.
VARs can use a local fulfillment center to handle returns. This can be a bit more expensive, but it can help to speed up the process and improve customer satisfaction.
Whatever business processes you choose, it is important to make sure that you have a clear and concise return policy that is easy for customers to understand. This will help to minimize the hassle of returns and keep customers happy.
Legal and Compliance Issues
For a cross-border eCommerce business, there are several regulations you’ll need to comply with, and failure to do so could result in serious penalties. You need help in navigating the compliance landscape.
One of the biggest challenges for businesses engaged in cross-border eCommerce is ensuring that they are compliant with all applicable laws and regulations. It is a complex and time-consuming task, as businesses must ensure that their products and services comply with the laws of each country in which they are sold.
VARs need help with things like product classification, labeling, and other requirements. They also need assistance with customs clearance and other logistics issues.
Another challenge for VAR businesses engaged in cross-border eCommerce is taxation. Depending on the country in which a business is based, there can be a variety of different tax regimes that apply to cross-border sales.
This can make it very difficult for businesses to determine how much tax they owe on each sale. Additionally, different countries have different rules for what types of products and services are subject to tax. This can make it difficult for businesses to ensure compliance with all tax regulations.
Procurement and shipping
VAR businesses selling internationally must also be aware of the potential challenges associated with shipping goods to customers in different countries. This can be a complicated and expensive process, as businesses must ensure that their products are properly packaged and labeled for shipment.
Also, you may be procuring in one country and shipping in another country which needs a whole lot of coordination and different distributor accounts.
Another challenge for businesses selling internationally is managing cross-border payments. When selling products and services online, businesses must be able to accept payments in a variety of currencies. This can be a complex and costly process, as businesses must ensure that they have the necessary infrastructure in place to support multiple currencies.
A very common misconception is that VAR business is always local and deals with local products and services. VARs themselves need to break from the mentality that a VAR business is local and cannot be expanded internationally.
What is the role of B2B eCommerce platforms in cross-border business expansion?
B2B eCommerce platforms play an important role in cross-border expansion for VARs. They provide a way for businesses to connect with other businesses and make cross-border transactions.
The right eCommerce platform for B2B facilitates its users with the right set of software solutions to streamline the process and make it easier for businesses to transact with each other.
B2b eCommerce stores for VARs provide a way for businesses to find new suppliers and customers from around the world. This can help businesses to expand their reach and grow their business.
Cross-border eCommerce can be a challenging endeavor, but it can also be dearly rewarding. There are quite a few things to consider when embarking on a cross-border eCommerce venture, such as shipping, customs, and payment processing. If you are prepared for these challenges and take the time to do your research, you can be assured of success in your cross-border eCommerce enterprise. B2B eCommerce software for office supplies is provided by various vendors.
By working with a reputable B2B eCommerce solution, businesses can streamline their pricing and payment processes. This can make it easier to offer competitive prices and get paid quickly and easily.
VARStreet offers robust support to VARs looking to expand their businesses globally. They have the tools, techniques, and guides to help your business soar to new heights.