Cross-Border Trade: Active or Passive Strategy?
Overseas expansion can be daunting. However, more and more businesses are realising it’s a necessity, taking the plunge and seeing the benefits. In fact, 80% of sellers on eBay.com.au have started Cross-Border Trade (CBT) compared to just 5% of registered businesses in Australia.
Thinking about venturing into CBT for the first time? The opportunity to explore expansion overseas with eBay is a fantastic way to remove the traditional barriers that have been in place for Australian businesses. More than 171 million people shop on eBay worldwide. Selling internationally on eBay allows you to reach global buyers that may have otherwise never discovered you online.
Additionally, eBay’s global presence means that much of the guesswork and risks are minimised when it comes to driving traffic and managing payments. Sellers can offer international shipping options to selected countries or can list directly on eBay international sites.
- Expand your customer base
In 2016, sellers on eBay.com.au exported to 153 countries. The largest trading partners were the UK, US, Canada and Germany.
- Achieve growth in overseas markets
The demand is there and growth is within reach. Australia is seeing more and more demand from buyers in China, Japan and India on eBay.com.au. Growing demand in overseas markets can present unique sales opportunities for specific product types. For instance, based on eBay’s internal data, the top three most popular products for export last year on eBay.com.au were wrist watches, mobile phones and cameras. The following categories represent the highest demand in Australian exports:
- Telecommunications products
- DVDs and other media items
- Auto parts
- Jewellery and wrist watches
- Plant seeds and bulbs
- Australian gemstones
- Australian fashion
- Diversify your risks
Reducing your dependence on your local market diversifies your risk. The different growth rates in different markets could provide balance in your overall portfolio growth. Depending on various factors, the strengthening of different currencies at different times could make your products more attractive to international markets.
How to Start Selling Internationally
Sellers can take one of two approaches when selling internationally on eBay:
- Passive or basic selling involves listing products on eBay.com.au and offering international shipping.
- Active or advanced selling involves listing directly on each country’s site using local language product data and accepting payments in local currency via PayPal.
Passive or Basic CBT
For eBay sellers facing resource constraints, the passive approach might be the way to go. In this model, sellers simply offer shipping to as many countries as possible. This enables limited visibility for your listings on international marketplace sites without the need to list on each site individually or translate product data.
Sellers who offer international shipping and accept PayPal will have their listings appear in the advanced search results (if a buyer clicks “show results from international sellers”) on eBay international sites in the countries where shipping is offered. Listings may also appear in default search results on those sites, but that is not guaranteed.
Active or Advanced CBT
For sellers who have localised and/or translated product data and who may be more versed in international selling, active CBT may be a more attractive model. This approach involves listing directly on each marketplace’s international site in the local language and currency. Sellers will also be responsible for multi-language customer support.
When sellers list directly on eBay’s international sites, the listings will appear in default search results and are likely to have better visibility than passive listings. In addition to improved search ranking, active CBT also offers the benefit of better price control (because you do not rely on eBay currency conversion to show price) and better translation for localised listings. However, active CBT requires sellers to understand VAT and other import/export requirements when selling actively.
Where to Start?
If you need help identifying new opportunities to grow internationally through passive or active CBT via eBay, ChannelAdvisor has global expertise. Our network of partners can help you resolve questions about taxes, customs and compliance when it comes to marketplace rules and fulfilment to international customers.
Download our eBook How to Take Your Business Across Borders (with Less Risk) for more information about growth strategies and agile CBT.