going global: expert insights to expand your ecommerce business
TRANSCRIPT
GAURI IYENGAR Customer Success
Teikametrics
CHRIS O’SHEA B2B Marketing
Meridian
OURSPEAKERS
MIKE INDIGARO eCommerce Expert
Teikametrics
DARREN HUTCHINSON Head of Sales, U.S
WorldFirst
Overview 01When to “Go Global”?
Marketplace and fulfillment options to expand
How globalization can affect profitability and pricing
Exchange Rates, Currency Risk Management and Foreign Tax Compliance
02
03 04
Indicators for expansion:
Is your product affected by seasonality? Can those items be sold in another country that is in season?
Are you searching for new growth opportunities?
Are customers ordering your products from outside of your home market?
You Must Conduct Market Research
Is your product a good market fit in a particular country?
What is the competition like in the new marketplace?
Use market research tools provided by your government
Amazon FBA Options
European Fulfillment Network
Pan-European FBA
Multi-Country Inventory
North American Unified
Supply Chain Considerations
FBA simplifies this process to a point
Build strong relationships
Suppliers
Exchange rate providers
Accountants
Every Expense Matters!
Transfer Fees
Unfavorable Exchange Rates
Duties and Taxes
Local Fees
Accountant/attorney
conversant in tax law
Shipping costs: Large or heavy items
cost more to ship
Product registration in local markets
Translation services
Sponsored products advertising*
Available in 6 marketplaces
If you create a new product listing in a new marketplace you essentially have to “start from scratch”
Rebuild brand equity
Reintroduce your product to a new audience
Exchange RatesWhat are they and how will they affect you?
Keep your prices competitive – Are the exchange rates favorable or unfavorable?
If unfavorable, figure out a way to control your ability to market your product as a “premium” offering
The types of foreign exchange contracts?
FORWARD CONTRACTS
MARKET WATCH
A forward contract will allow you to fix a rate for up to 3 years
Let us be your eyes and ears on the currency markets
RATE ALERTSGet an email notification when your target rate is reached
FIRM ORDERSAutomatically trigger a payment if a certain rate is achieved
Forward Contracts
A forward contract can
be used by a seller to
control their profit
margin and pricing for
a chosen period of
time.
For example: your disbursements are £50K per month, and your
profit margin is 5% with GBPUSD rate at 1.24. If you’re relying on
the spot rate you are open to market fluctuations and therefore
your profit margin can change. If you had booked in a forward
contract at 1.24 to protect your profit margins, you would retain the
5% margin.
Pros: Allows you to forecast your
disbursements
Budgeting your printing to
protect profit margins
Allows you to focus on other
areas of your business
Cons: You do not benefit if rates
moves against your forward
rate
What taxes or local regulations will affect your business?
Excise taxes
Local import tariffs
VAT
US Sales Tax
What is VAT?
“VAT” stands for “Value Added Tax”
Various rates - standard rate, reduced rate, zero rate, VAT exempt
VAT a paid to the government directly by the producer, and the cost is passed on to the consumer
VAT avoids the cascade effect of sales tax by taxing only the value-added of each stage of production
Not being compliant? Penalties…
Repay all of the tax owed – up to 10 Years
Pay interest and fines of up to 200%
Company directors can be personally liable
VAT is becoming a more significant source of revenue for jurisdictions there is a greater focus on enforcing compliance and combating fraud.
Tax authorities are being more aggressive in how they treat VAT errors/shortfalls.
Where companies have a VAT obligation, they need to: Set up a VAT registration (no permanent establishment or corporate tax issues); and
Produce & submit regular VAT returns, EC Sales Lists, Intrastat reports
• Accurately
• On time
• Compliant with the prevailing national legislation
Pay (and recover) the required tax
VAT Registration/ VAT Compliance
Marketplace requirements & VAT/Sales Tax IDs
Register for VAT/Obtain VAT
Identification Number
Input your New VAT Number
on to Marketplaces
Copyright ChannelAdvisor 2015
Evaluate whether your business is ready to enter a new marketplace
Research the new market to make sure your product is a good fit
Research pricing strategies, expenses and taxes associated with international selling
Research all available options to see which marketplace will work best for you
Review
M A R C H 2 9 T H , 2 0 1 7 | 3 P M E S T
A P R I L 1 2 T H , 2 0 1 7 | 3 P M E S T
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These comments are the views and opinions of the author and should not be construed as advice. You should act using your own information and judgment.
Whilst information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed.
All opinions and estimates constitute the author’s own judgment as of the date of the briefing and are subject to change without notice.
Any rates given are ‘interbank’ i.e. for amounts of $5million or more thus are not indicative of the rates offered by World First.
World First USA, Inc. is a Delaware corporation, registered as a Money Services Business in the United States with FinCEN (Registration number 31000099952286), and holds licensing as a non-depository financial institution with the Nationwide Multistate Licensing System (NMLS#1018479). World First USA, Inc. is also registered in Canada with FINTRAC (registration number M11393445).
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