In today's digital age, the world of eCommerce has never been more connected. The growth of cross-border eCommerce has been tremendous in recent years, allowing small businesses to expand their reach beyond their home country and tap into new markets.
A recent study found that 4 in 10 online shoppers have increased their willingness to consider cross-border eCommerce purchases since the pandemic.
The benefits are easy to see; however, international shipping doesn’t come without challenges, and Canadian small businesses face unique obstacles.
Canada’s neighbour to the south, the U.S., is an enormous market that you don’t want to miss out on. And with the right strategies in place, you can be ready to take advantage of it.
In this article, we'll explore the growth of cross-border eCommerce, the challenges faced by Canadian small businesses, and provide tips for expanding your business into new markets, as well as a look at the future of cross-border eCommerce.
The Power of Cross-Border eCommerce
Currently, only 3% of Canadian eCommerce revenue is generated by cross-border transactions. It seems that many businesses are missing out on a great opportunity to tap into international markets and their potential revenue.
For example, compared to Canada’s $58 billion, the U.S. generated $905 billion in revenue in the eCommerce industry in 2022! That’s more than 15x in market size.
Don’t let the fear of international shipping and customs regulations hold you back from the potential success to be enjoyed by moving beyond your borders.
The Challenges of Cross-Border eCommerce for Canadian Small Businesses
Cross-border eCommerce can be a great opportunity for Canadian small businesses to expand their customer base and increase their revenue. However, there are also a number of challenges that come with selling products internationally. Here are some of the main challenges that Canadian small businesses may face when engaging in cross-border eCommerce:
1. High Shipping Costs
- International shipping can be expensive, and Canadian small businesses often have to bear the cost of these high shipping fees.
- According to Statistics Canada, high shipping cost is the greatest challenge when selling goods or services online, an issue that nearly 40% of companies have trouble managing.
2. Customs and Tariffs
- Navigating the customs and tariffs process can be difficult for small businesses, particularly for those unfamiliar with regulations in different countries.
4. Navigating Different Currencies
- Understanding and accounting for the differences in currencies can be a challenge, particularly when it comes to pricing products.
How to Overcome the Challenges of Cross-Border eCommerce
Despite the challenges, there are ways for Canadian small businesses to overcome the obstacles of cross-border eCommerce.
Here are a few ways you can make sure your venture into new markets is a breeze:
Factor Duties and Taxes into Your Pricing Strategy
Cross-border shipments can be subject to duties and taxes, so do your research and use a duty calculator to get an idea of what duties and taxes might apply on your shipment. Your customer will be responsible for paying these fees prior to receiving their order, so make sure you make this clear on your website to avoid unexpected surprises and customer disappointment. Alternatively, you may opt for a Delivery Duty Paid (DDP) option, where you collect these fees upfront during checkout and then pay them yourself, ensuring a more seamless and surprise-free shopping experience for your customer.
Find a Reliable Shipping Partner
Partner with a reputable international shipping company to help reduce costs and streamline the customs and tariffs process. For example, eShipper’s PBX helps simplify border clearance to the U.S for customs clearance under Section 321 and shipments under $800 per day. . This service can reduce customs delays/stuck-at-the-border issues, while also saving you up to 70% on shipping fees.
Offer Discounted Cross-Border Shipping
Consider offering discounted cross-border shipping to attract more customers when you initially start out. Since international customers care a lot about order tracking, this additional value can be a great way to secure the order, and a long-term customer. This way, international customers can rest assured that their packages are delivered on-time and for a fraction of the cost.
In partnership with USPS, eShipper has made it possible to save on shipping costs by offering domestic USPS pricing on cross-border shipments. This gives you access to a reliable, cost-effective way to ship products internationally. With eShipper's tracking feature, customers can easily keep tabs on their shipments, giving them peace of mind that their packages are in good hands.
Factor Geography and Temperature into Your Shipping Strategy
If you’re shipping temperature-sensitive products, make sure you choose a shipping option that protects your shipments from shifts in temperature on route to or at their destination. Whether the items you sell require ambient/room temperature, cold, or frozen shipping, be mindful of the geographical location they are being shipped to and ensure that your carrier can offer you the right transportation solution, whether it involves reduced delivery times or specific temperature ranges.
Make Checkout Easier
Your customers want a user-friendly checkout process no matter what currency they are using. For maximum transparency, list items in their currency on your website, so they always know exactly how much an item costs. When setting up your store, ensure that the currency conversion occurs up front and carries through the purchase process for a smooth checkout experience (and no unpleasant surprises on their credit card bill).
Remember, the key to success in any new market is to be prepared and strategic, and above all, confident. So go out there and take those new markets by storm!
The Future of Cross-Border eCommerce
The future of cross-border eCommerce looks bright, with the growth of eCommerce expected to continue in the coming years.
The Rise of Automation and AI
- As technology continues to advance, automation and AI will play an increasingly important role in cross-border eCommerce. This will help small businesses streamline their processes and make it easier to reach new markets.
The Growth of Social Commerce
- Social media platforms are becoming increasingly important for eCommerce, with more and more consumers using these platforms to discover and purchase products. Small businesses should consider incorporating social media into their cross-border eCommerce strategy.
The Importance of Mobile Commerce
- With more and more consumers using their mobile devices to shop online, small businesses will need to ensure that their eCommerce platforms are mobile-friendly.
The Increasing Importance of Data
- Data analytics will play a crucial role in the future of cross-border eCommerce, as businesses will need to understand consumer behavior and preferences in different markets to succeed.
In conclusion, cross-border eCommerce is a great way for Canadian small businesses to expand their reach and tap into new markets, but it's certainly not without its challenges.
High international shipping costs, customs and tariffs, and language barriers are just a few of the obstacles that small businesses must overcome. However, with the right strategies in place, these challenges can certainly be overcome.
Overall, the best way to make this process simple is to find a reliable shipping partner that can help you learn the ins and outs of international shipping–and ensure you are reaping the rewards of these new markets!
Contact us at eShipper and our team of experts will be more than happy to help you through every step of this process, from choosing the right courier partners to getting commercial invoices completed correctly.
We want your business to succeed in crossing borders and we will do everything we can to support you in making that happen.