Entering the U.S. e-Commerce market falsely seems easy from Europe as dematerialized transactions would logically allow you to ship your products from your home country to wherever you wish. The pandemic accelerated an ongoing mutation. Any company entering the U.S. market needs to be ready for e-Commerce, electronic transactions, and drop-shipping. Let’s see how to build a thriving e-Commerce in the USA.
New distribution model
In 2020, 27% of retail transactions were done online, an enormoUS increase from 16% in 2019. 2021 figures promise to be even higher.
“The world where distributors and retailers-controlled access to customers is over and new concepts are gaining momentum: direct to consumer is now key to success.”
Manufacturers now talk directly to customers as the traditional distributor role diminishes, creating opportunities for foreign companies as they enter the United States, promising better margins, but also adding new costs.
Retailers, reluctant to carry new products in their stores, are more prone to advertise them on their website or marketplace and ask the manufacturers to drop-ship products directly to the consumers. This is an opportunity for newcomers in the U.S. market to easily reference their products with renowned retailers.
As marketplaces (Amazon, Wayfair, Walmart, Google, Target, etc.) gain strength, shortening delivery time and increasing customer expectations add more complexity to this environment. Whoever enters the U.S. market must be prepared to warehouse and fulfill orders coming from different sources, each with different requirements.
E-Commerce is rapidly morphing in a broader e-Business, covering all the internet business processes: buying and selling products and services, servicing customers, processing payments, sharing information with partners, etc.
Selling online goes further than building an e-Commerce website and involves managing several online channels. A successful e-business strategy must include a multichannel approach, one step at a time.
Successfully start a U.S. e-Commerce business
Do U.S. e-Commerce from the US
Shipping speed is king and selling from a European website holding stock in Europe is not sustainable in the long term and retailers will not take the risk to reference your products. Therefore, you need a local structure to help you drive your U.S. e-commerce operations, maintaining your stock and shipping your products from the U.S. soil
Localize your website
Commonly, European companies try to sell online to Americans as they sell in Europe. U.S. consumers love straight-to-the-point websites, where the product features and price weigh more in the buying decision than the history of the company, for example.
Choose U.S. shopping cart, payment, and shipping solutions
When it comes to choose a shopping cart platform, you need to stick to the market habits; Prestashop dominates in Europe, Shopify is king in the US! Additionally, you want to take payments, calculate tax rates and evaluate shipping. It is always better to opt for U.S. based service providers. A simple example of what usually goes wrong: in Europe, all prices are displayed with tax included when in the U.S. all process are shown exclusive of taxes. A local service provider will always know better.
Don’t forget the B2B market
Consider a B2B section on your U.S. e-Commerce platform to work with retailers more conveniently. They will have instantaneoUS visibility of your catalog and can drop-ship missing items from you directly to their customers. You reduce customer service workload when processing orders.
Locate your stock and operations in the U.S.
You need 3 things for an e-Commerce business: a warehouse, a team for operations and an IT system that manages inventory, and exchanges data with your partners. The cost-effective solution is to partner with a local company that can guide you every step of the way to reduce costs.
Consider local e-Marketing
A well targeted budget can go far. Hire a U.S. agency to manage your online ad campaigns, social media, and overall online marketing. The USA are a sum of regional markets that native e-marketing specialists will be better able to decipher.
Protect your brand, your prices, and your products
Always register your brand with the Patent and Trademark Office. https://www.uspto.gov/ This will allow you to register your brand with Amazon and retain control of your listings. You will want to establish a Minimum Advertised Price that restricts your retailers from selling at a lower price and to also control which retailer sells your products on what marketplace.
Logistics under pressure
Regarding logistics, 2021 was the outcome of what 2020 prepared, a logistics nightmare.
Sea freight, air freight, truck freight, mail, storage, customs, every step of the logistics chain has been impacted by delays, cancellations, skyrocketing prices. We experimented China to U.S. 40’ container prices surge from $4,000 to more than $27,000 and transit time going up from 4 weeks to 3 months.
The reason, as explained by this McKinsey review (https://www.mckinsey.com/industries/travel-logistics-and-infrastructure/our-insights/whats-going-on-with-shipping-rates), lays more in reorganization of the routes now focused on the exchanges between Asia and North America than a real surge in volumes.
But at the end of the line, it is all the e-commerce industry that is impacted by this. The sector is experimenting shortages at crucial moments (black Friday, cyber Monday, Xmas), higher costs and more uncertainty.
E-Commerce industry is already adapting by raising stock level, mitigating shipping and handling times, and raising prices of services or products.
2022 might be the year during which this situation normalizes but logistics prices will never return to their pre pandemic levels. This must be considered in any new e-Commerce operations.
Doing e-Commerce in the U.S. is becoming mandatory. By following certain rules and with reasonable investments, you can market your products on several online channels. Following a well thought strategy has helped foreign manufacturers reach skyrocketing online sales. The first step toward success is to partner with a reliable company that will handle your local stock and operations while backing your e-Commerce development with its expertise and know-how.
Author : Thibauld Quirion
Consult his Services page and his French Cluster Member page