In recent years, an emerging commercial movement has established a thriving online presence. Huge numbers of retailers have discovered the rich opportunity offered by online marketplaces like Amazon, Etsy and eBay, so much so that we can now hail the rise of the global ‘iStreet’.
What’s more, these online sellers are making waves; they contributed an incredible £11bn to UK exports from international sales in 2016 alone. With low overheads, low risk and the support of globally-recognised shopping platforms behind them, online sellers are successfully breaking into overseas markets and reaping the rewards.
Who are the global istreet sellers?
In October 2017, the Centre for Economics and Business Research (Cebr) published the findings of their research into global online sellers, carried out on behalf of international payment experts WorldFirst.
The report is full of good news for this new generation of global istreet sellers, which it defines as small businesses with less than 50 employees selling goods and services via online marketplaces. Not least, that 55 per cent of these sellers have experienced growth in last year, with one in ten seeing revenues increase by more than £500,000.
Unsurprisingly, this kind of achievement is attracting attention. The report also stated that 20 per cent all UK SMEs have plans to expand on the global iStreet in the coming year. It seems that the digitisation of our commercial world, specifically in the form of an explosion of online marketplaces, is resulting in a real and increasingly viable alternative source of income to the traditional high street and UK small businesses have been quick to catch on.
Joining the global online selling revolution
It’s clear that online marketplaces provide a gateway to international trading but if you want your own slice of the pie, just where should you start? Here are our top tips.
Do your market(place) research
We all picture the same internet giants when thinking of online marketplaces, but the truth is that there are a multitude out there, with access to various geographical and retail markets.
It’s true that 61 per cent of online sellers that use marketplaces opt to trade on eBay, while 44 per cent use Amazon. Other popular platforms include Gumtree, Etsy and Facebook. But depending on what you want to sell, where and to whom, there may be less obvious marketplaces more suited to your business.
Start by comparing the major players with little-known equivalents, focusing on marketplaces that operate in certain areas of the world, if you want to target specific countries. Despite the UK’s impending exit, the EU is the most popular overseas market with UK sellers (86 per cent of small businesses export there), so take a look at less mainstream marketplaces like France’s CDiscount, Allegro – big in eastern Europe, and DeWanda; a great design-hub alternative to Etsy. Consider the market reach, seller fees and support associated with each one, as well as the kind of customers that use them.
Provide reliable shipping
Once you’ve chosen the online marketplaces you want to use, think about how you’ll fulfil your international orders. Sending your goods overseas can be expensive, but the last thing you want to do is pass sky-high delivery costs on to your customers - research shows that a whopping 90 per cent of online shoppers have abandoned orders due to pricey shipping. Just as bad, cheap yet unreliable delivery can undermine confidence in your business and send your customers elsewhere next time.
Global logistics providers tend to offer a good middle-ground; dependable and timely shipping that’s also cost-effective. Consumer control and visibility is important, so look to partner with a company that allows your customers to track their orders all the way.
Maximise your international revenue
Of course, selling overseas means then having to convert your income back into your native currency. This is where fluctuating exchange rates can bite, taking a considerable chunk of your hard-earned profits each time you move your money. Cebr’s research found that currency risk was a concern to 17 per cent of online sellers, as well as the broader economic trends that can impact a bottom line when selling internationally.
Enlisting the help and expertise of a foreign currency specialist can make sure you keep as much of your international earnings as possible. With access to the best exchange rates going, a specialist like WorldFirst can pass these on to you, meaning you can convert at a far more competitive rate than standard marketplace payment systems can offer. They can also let you know when the market is most favourable for conversion, help you maintain your profit margin regardless of unfavourable currency shifts, and collect and distribute your funds in foreign currency, allowing you to do business overseas like a local.
Cebr predicts that the growing community of global istreet sellers will double their 2016 contribution to UK exports by 2020, to £21.3bn. The movement shows no signs of slowing, so there’s no better time to jump on board.