Electronic commerce has skyrocketed in recent years and that means that more companies that could not afford a real store have suddenly started selling their products online, not only to customers in their own locations, but worldwide.
However, making people buy what you are selling is a little less easy than you think, especially with the additional complication of serving customers abroad shopyspy.
Craig Vodnik, co-founder and vice president of operations at Cleverbridge, an e-commerce provider in Cologne, Germany, has an idea of global business strategies. His company deals with more than 300 international software and SaaS companies, such as Acronis, Avira, Dell, Malwarebytes and Parallels. He is also the author of “Building Keystones “, a blog aimed at the digital e-commerce industry.
Here is the list of pricing problems that every company that considers online sales has to consider:
1. Make prices more flexible
The broader the scope of your products, the higher the market prices that you have to take into account and, if possible, make adjustments accordingly. “If you sell a competitive product for £ 50 in the United Kingdom, converting that product to US dollars will result in a product that costs around US $ 80,” Vodnik explains. “However, competitors in the US could sell the same product for $ 50, so even though they are prices in local currency, they are not competitive and price-sensitive buyers are going to leave you to go with the competition.”
2. The coins are confusing
Although converting currencies is easier than ever, seeing an unknown currency on an e-commerce site is confusing for many people and can lead to the abandonment of online shopping carts. To reduce conflicts, set prices in each corresponding national currency,”Vodnik recommends.
3. Present the price
Believe it or not, rounding numbers can make a psychological difference in consumers. Exchange rates can cause friendly figures to look strange and frightening after conversion. “If you present to a European customer a product with a price of 23.81 euros instead of a more favorable price to the customer of 25.00, you will be increasing the friction of the electronic purchase without necessity and you will make evident the fact that your company is not found, obviously, in your home country,”says Vodnik. “Customers should be able to see the prices of their products in clean and rounded numbers to further simplify the buying decision making process.”
4 – Local Payment
Asking your customers to pay in a way they are not used to can make them suspicious and create friction in the purchase that will affect your income. You can make them feel at home working with what they already know. “In Germany, for example, electronic transfers are the most common local payment method, while in Japan, the konbini payment method is a popular alternative, representing almost 40% of some of our clients’ Japanese operations” , explains Vodnik.
5 – Taxes
Showing taxes the way your online customers are familiar will help clear all suspicion and increase your shopping convenience. There are also legal issues, since some countries have different information requirements imposed. “In the United States the sales tax is added to the sales price and varies widely throughout the country and within each state,” Vodnik warns. “However, in the EU the Value Added Tax (VAT) is a tax on the perceived value of a product, so it is marketed as a component of the final price.”