The dream of every entrepreneur is to establish their business and gain a global footprint, but this comes short of reality for many business owners. In fact, very few small to medium businesses are running successful export services today. However, thanks to the age of internet and E-commerce, it has become a little easier for small businesses to go global.
eBay provides an e-commerce platform for almost 200,000 exporters
Take the e-commerce platform eBay which revealed that in 2014, over 90% of its SME users used the platform for export purposes. This was a rise of more than 500% compared to a similar study conducted five years earlier in 2009. Despite these remarkable findings, these small to medium businesses (SMBs) exports make up less than 5% of total SMBs.
A few challenges cited include high costs of shipping, language and communication barriers with global customers as well as other red tape. However, for most businesses, lack of understanding and information on how to begin exporting keeps them catering to a national market at best.
Government and statutory systems are rather complex, and this makes for too much red tape for small businesses that are trying to venture into the export industry. Using eBay, however, sellers have been able to reach huge markets, with more than 80% of exporters on eBay catering to 5 export zones or higher. In addition, about 35% of exports from the US reach Trans-Pacific countries.
Higher revenues through export services
If you’re running a small business in the US and have been wondering how to begin, e-commerce offers a viable solution. Through e-commerce platforms, you can overcome most of the hurdles that stood in the way of a business’ success in the past. For instance, language barriers are eliminated to enable you reach a non-English-speaking customer.
Opening up global markets offers a big boost for smaller companies. Businesses that have been exporting for five years or more through e-commerce platforms have reported sales boosts of more than 30%. One company began with just 200 items seven years ago, with an annual turnover of about $200,000. Today, the same company has an annual turnover of nearly $800,000, 30% of which is made of export sales.
Lower exportation costs
Export fees vary depending on the e-commerce platform chosen by the merchant. Some platforms charge a nominal percentage per transaction while others have a flat rate fee payable monthly, quarterly or annually. The shipping costs are separately classified according to the different export zones.
Unlike before when shipping overseas was next to impossible and charges were exorbitant, using a global shipping program through e-commerce platforms can reduce shipping costs by as much as 70%.
Variety of platforms
SMBs looking to export can have their pick of e-commerce platforms: Alibaba, an e-commerce giant from China has attracted many US SMBs to-date. They realized $1 B turnover last year in a fan-fare filled celebration. There’s also Etsy.com which specializes in vintage and handmade crafts.
Of course, there’s Amazon.com with over 2 million sellers, even though the number of exporters was not revealed. SMBs can pick and choose whoever they feel offers the best terms according to their products and business goals.
At the end of the day, should you choose not to export today, it would hardly be because “it’s just too hard”.
Bio: Lalit Sharma is an SEO consultant who runs a SEO house called Ranking By SEO. He is specialized inlink building and other SEO related activities. You can also find him on Twitter, Google+ and his personal site.
