Online sales continue to boom in the UK. In the last year, they’ve increased by another 10% – to £476 billion in revenue for sellers. Meanwhile the high street continues to shrink, with retail units transforming into cafe’s, grooming and entertainment centres.
If you’re looking for a reasonably low-budget retail start up opportunity, going online is a no-brainer. Unless, that is, you are a highly skilled nail technician or barber!
It can be overwhelming to understand how to sell online. For starters, you’ll have to figure out what items to buy and sell and where to get them if you’re a wholesaler of various products or a manufacturer of a specific line of products. Drop shipping is one way of keeping things simple, though profit margins will be much tighter. You can read our comprehensive guide to setting up a Drop shipping business here.
Whatever type of online retail business you start, it is almost certainly worth taking advantage of your exposure to a global marketplace and offering sales to customers in other countries. You can of course continue to trade in just one currency if necessary. But there are advantages to offering sales in a variety of currencies. Here are our top tips for doing so:
1. Make things easier for international customers
Having to make purchases in a foreign currency puts off about two-thirds of potential customers. They like what they see and they want to buy, but at the critical point of adding your product to their shopping basket they decide that the currency conversion fee is just not worth the hassle. It is easier to abandon your site and to shop somewhere else.
As a vendor you can take the hassle away from customers. You just need to set up a system once. When it is in place it will run automatically. Offering sales in their local currency, or a major currency that they are more comfortable with, provides instant reassurance and higher trust and is much more likely to result in a completed sale.
2. Know your customers
Use Google Analytics – or whatever package is offered by the sales platform you use – to identify where your customers come from. You can then set up customer profiles and track how they use the website or online shop. You may be able to identify groups related to specific currency regions and see whether and how they complete or abandon purchases. Do your homework and identify how currency conversion options may improve your business.
3. Offer currency options (but not too many)
We would recommend that you offer the major international currencies, including US Dollars, Euros and Pounds Sterling. If your Analytics review shows a significant group from another currency area then it may also be worth offering that as an option. But don’t offer lots of small and obscure currencies, unless you hate your accountant. If you are based in the UK, then you’ll want to keep an eye on UK exchange rates for relevant currency fluctuations, but don’t think about trying to manually update prices for relative currencies. There are some great payment systems and apps that will adjust prices automatically, including PayPal.
4. Test selling on a platform as well as your own store
Platforms such as Amazon, Etsy, and eBay are made up of thousands of small retail businesses. Amazon alone has been reported to have far over two million suppliers of various commodities and brands. Those platforms have international currency options built in.
It is always worth testing your retail offering on both a platform and through your own independent website. In many cases it will be worth continuing to sell on both. Platforms can change rules, which can destroy your business overnight: so don’t keep all your retail eggs in one basket.
The initial obstacles facing sellers who want to join these platforms are very minimal. Simply put, you have to create your seller’s account, register your product using a description, cost and pictures, and establish a method of actualisation (delivery). Last but not least, you’ll need to set up a means that will enable you to accept customer payment and prepare their product for shipment.
5. Use a multi-currency accounting package
Accounting for income from multiple currencies is a little more complex. Your life will be much easier if you, or your accountant, use the multi-currency version of an accounting package like Xero or Freeagent. You will need to use an accepted exchange rate on the day the purchase was made. If you are VAT registered you will also need to ensure that is properly accounted.
There is no question that the future of retail in online. The UK has a one of the highest levels of online shopping in the world. We are also at the forefront of online retail. That means that UK online retailers are ideally placed to take their expertise globally and be truly open for business.