3 Best Practices for Expanding Into a New Market
There are a lot of benefits to a operating with a niche strategy in eCommerce. It is easier to build a focused business that satisfied the needs of a target market. However, at some point, you reach the limits of growth within a single marketplace and have to identify new avenues for growth.
For eSellers at the point where it is time to expand into a new market, the following is a list of best practices and tips to follow.
Identify the Right Market to Develop
The first important step before investing money, time and other resources into expansion is to identify the ideal market opportunities for your business. Fortunately, you have access to a lot of tools and data to assist your research.
Assess demand for the goods you sell in potential markets. One way to do so is to conduct search engine research for each new country or market. Use Google Trends and other keyword research tools to figure out how often people in the potential market query the products or issues that match with your solutions.
Analyze web traffic on Shopify, Magento and other online marketplaces to determine how much traffic each site generates from a particular country. You can similarly evaluate traffic sources on your website to see if you are generating interest outside your primary market. Figure out which products are selling well in certain countries. Amazon even offers small operators direct access to assistance in identifying ideal new markets for expansion.
Determine what tools and challenges will impact your expansion, such as in the areas of translation, distribution and taxation.
Test Before You Fully Invest
Before investing fully in a new market, test the opportunity on a small scale. For instance, market a small number of products or use a limited promotional campaign. Key areas to test include shipping options to the new market, taxation and promotional strategies.
As you evaluate the opportunity, determine whether the revenue potential justifies potential increases in distribution costs, higher taxes, tariffs and fees, and marketing campaigns.
Heed These Words of Warning
In addition to testing opportunities before taking the plunge, consider the following as you explore new market opportunities:
Identify Support Tools: Taxation and fees are particularly complex when selling internationally on Amazon and other platforms. Each country has unique regulations and tax standards. In some cases, you might need a local expert to advise or manage activities in an international market.
Don’t Dilute: Don’t sabotage a successful operation by expanding to the point where you can’t continue to satisfy existing markets at a high level.
Maintain Your Brand: In some cases, you can adapt your brand to fit new markets. However, adapting too much could actually cause confusion within your international marketplace.
Expanding into new markets is a logical move for eSellers that have maximized growth in a domestic market. However, it is important to plan and execute effectively to grow in a way that is financially wise.