Are Your Newest Customers Outside The USA?
Many small and medium sized American businesses focus almost exclusively on the domestic market, even if the internet is their main sales channel. Some have invested heavily to create new, innovative products, but they don’t think to sell internationally.
There are new, untouched, unsaturated markets outside the USA. There are thriving cities and millions of consumers and you don’t need to be a billion dollar company to expand into these markets.
Unsaturated, Low Competition Markets
The United States is not ‘saturated’, but there is more competition for online business here that anywhere else in the world. You will see 50+ companies all trying to sell the same product and sometimes the competition is dirty.
Do a Google search for any product, or search on Amazon, and you will likely find many companies offering nearly identical goods. I assumed it was always this way.
But if you look on other e-commerce channels around the world, you will sometimes find no competition. Compare the selection of MercadoLibre.com.co or Flipkart to Amazon.com. You may see 0 competition for your products.
The Key: Leveraging Partnerships
I looked into selling products on Amazon.in in India. If you have a small/medium operation, dealing with overhead/regulations isn’t worth it. If you want to sell on MercadoLibre.com.co (in Colombia) you need to have a Government ID for tax purposes, like an EIN for American LLC’s.
It reminds me of the movie Iron Will that I watched with my mom as a kid. A young man is forced to enter a dog sledding race in order to save his family farm. Approaching a massive snow-covered hill, he arduously cuts a path through the snow. He’s exhausted when he reaches the top, and he only sees his mistake when the other sled drivers zip past him using the path he painstakingly cut.
“Thanks for cutting the trail!” they shout as they zip by.
Don’t exhaust yourself cutting trails into new countries. Look for paths that have already been cut. Look for businesses that are already selling in these foreign markets.
If a market exists, then someone is selling. Someone already has a system to find customers, sell products and fulfill orders.
Would these foreign e-commerce sellers add an already-proven, highly profitable product to their catalogue?
If you keep minimize their risk, don’t put demands on their cash flow and give them a first-mover advantage with large upside potential, some will agree to plug your product into their already-proven country specific system.
Each country presents a complex set of challenges from fulfilling orders to paying taxes. Each country also presents a relatively small opportunity on it’s own, when compared to the USA.
Your profit margins will be lower because you’re sharing with a partner but you’ll be able to enter many markets quickly without even getting a Tax ID. You just need to provide inventory.
You and your partners both expand their businesses leveraging the investments you’ve already made. That’s a win-win.
Small International Opportunities Are Growing Quickly
I believe the famous e-commerce statistic in the USA is 15% growth per year.
That’s also the same year-over-year growth in Colombia. The average for all Latin America is 17%. E-commerce is growing incredibly quickly in India. This is a worldwide trend, not a USA phenomenon.