In 2020, marketplaces represented 58% of European cross-border online sales. A proportion which is set to reach 65% by 20251. What are the reasons behind this upswing? The breadth of the offer on this cross-border circuit appeals to consumers. It allows them to buy products from overseas which they cannot find locally.
That said, international roll-out is not an easy task for a merchant. The marketplace often provides the simplest solution. It enables the merchant to offer consumers all the facilities (delivery, returns, etc.) available from the marketplace. This in turn ensures a reliable purchasing experience in line with consumers’ expectations.
Marketplaces have torn down the borders for e-merchants. At present, there is nothing to prevent them from selling their products to the entire world. At least in theory, because in practical terms, there are still several hurdles which can slow down their momentum. Rules differ from country to country. Responding to cross-border customers requires a certain degree of adaptation. There are, in particular, several aspects to be aware of:
- Consumer rights
- Contractual principles
- Best practices in line with consumer habits which are specific to each country
A multitude of rules you need to master before launching into cross-border sales.
“To facilitate the task for merchants, we compiled all these elements and identified the main sticking points with regard to 3 key issues of marketplace commerce, i.e., cross-border transport, financial issues and customer management. We provide a solution via the services of Octopia”, says Grégoire Dirou, Head of Seller Services.
Benefit from cross-border logistics
Once a store has been set up on the marketplace and the product sheets have been correctly translated into the country language, the next consideration is product shipping. In broader terms, it is the whole cross-border and logistics aspect that needs to be taken into account:
- Cost
- Returns management
- Delivery lead-times
- The right to information
To anticipate these factors, it is in the merchant’s best interest to opt for a turnkey solution. This will enable the merchant to automatically import their orders in real time from any marketplace, to follow the shipping of orders taken on by Octopia, and to benefit from a simplified returns management process.
“By delegating their e-logistics, merchants can meet the demands arising from a sharp increase in sales due to their internationalization”, he explains. This model also enables a pooling of delivery and logistics costs by centralizing order management. Savings not to be overlooked!
Steer simplified accounting
The next step is billing, which comes with its share of constraints, particularly in terms of varying tax systems (VAT and customs duties). Bills must be issued according to local rules, VAT must be declared, shipping fees managed and customs documents completed, not to mention foreign currency management.
This represents a complex and fluctuating administrative task which adds to the difficulty of cross-border trade.
Take VAT for example; since July 1st 2021, VAT must be declared and paid by the marketplace in the name and on behalf of the merchant in a certain number of cases provided for by the VAT Directive.
Furthermore, according to the sales made, the merchant is required to have VAT registration in the countries of sale, they must also have a customs agent in the case of import and must provide monthly tax and customs declarations (which aggregate all the merchant’s accountancy lines).
This procedure is in fact a way of centralizing the number of liabilities, as marketplaces must transmit the data collected from their sellers, in the form of a register, to the tax authority.
In practical terms, marketplaces will implement for the sellers in question an upstream VAT payment check to ensure that their customer companies are registered in France. If not registered, the latter may then simply be excluded.
“This is why we provide sellers with a solution which helps them to comply with their international obligations relative to VAT and indirect taxes”, he explains.
Optimize your customer relations
How do you improve cross-border customer relations and after-sales? “This is obviously more difficult for the merchant to manage, given that the locations are out of national territory, but we know how to do this,” the expert emphasizes.
“We’ve been managing customer relations on behalf of one of our merchants, operating in 15 countries and some sixty marketplaces, for 10 years. We systematically adapt to local requirements, with a response within 24 or 48 hours, by email or telephone.” This is just a part of the service provided by Octopia.
“We implemented a specific solution for customer relations management, because satisfaction really is key to business success. This means that customer relations management (CRM) is strategic. That’s why we preferred to develop an in-house solution, rather than forming a partnership with a professional and delegating management to them,” the expert tells us.
Thanks to this tool, the seller is able to respond to customers on a multitude of platforms.
Keep control of your business to maximize your performance
The marketplace is clearly a mandatory move for sellers looking to export on cross-border markets.
Take the Spanish market for example, where e-commerce is booming, and according to eMarketer forecasts2, the trend is set to rise.
The growth in online sales in Spain is expected to exceed that of all other European countries in the next three years. Sales are predicted to reach $40.12 billion by 2023. Marketplaces are justifiably highly popular with Spanish consumers, who are very attentive to price. Marketplaces offer them a very competitive economic opportunity.
Consequently, for a seller, rather than opening a site in a particular country, with all the constraints this entails (translation, finding and setting up a payment service compatible with the country in question, etc.), it is better to enter a marketplace operating in that location.
This will allow the seller to speed up the pace and make their mark in a foreign country more rapidly. The other advantage, when the seller is already on board the solution operated by Octopia, is that they enter, in one move, all the countries where this solution is implemented.
The seller nevertheless maintains the control of their sales strategy by country and their price positioning. Selling to the world via a marketplace means multiplying high-traffic sales opportunities and de-seasonalizing sales, etc., which requires constant adaptation by the merchant in order to activate the right levers (marketing, special offers, etc.) at the right time.
With the Octopia solution, the merchant remains at the helm, free to make strategic decisions, but relieved of all operational constraints. The winning way to go!
[1] Study conducted by CBCommerce with FedEx Express and Worldline. The “Top 100 Cross-Border Marketplaces Europe
[2] emarketer
