Things Ukrainian businesses need to know before starting to sell on international trading platforms
The vaccination against the coronavirus has already begun, but it is difficult to say when we will get out of the economic crisis — and this is especially true for Ukraine.
Micro, small and medium enterprises have been hit hardest by the pandemic. They have fewer resources, and, moreover, they are actively represented in the spheres of food, accommodation, wholesale and retail trade. And if restaurants are trying to stay afloat at the expense of delivery, then for the rest the only right decision is to go to e-commerce.
Furnishing in e-commerce
The pandemic and lockdown have forced shoppers around the world to go online: according to Digital Commerce 360, website traffic at Amazon.com, the largest online retailer in the United States, grew 28.1% in July compared to February 2020 and 8.7% in year on year.
A similar situation is observed on marketplaces. For example, according to Statista, in the second and third quarters of 2020 alone, product sales on Etsy doubled to $2.63 billion, up from $1.3 billion in the first quarter of 2020.
In 2020, e-commerce retail sales worldwide totaled $ 4.2 trillion. E-commerce revenues are expected to grow to $ 6.54 trillion by 2022.
More than 2.14 billion people worldwide are projected to shop online for goods and services in 2021.
International marketplaces as an outlet for Ukrainian local brands
Local brands need to realize that, thanks to the transition to online, consumer behavior has changed: now he does not care whether he ordered the product he liked from China or from Ukraine.
According to DHL Express, the number of shipments in DHL’s global e-commerce network grew by 35% in 2020. This means that manufacturers have every chance of renewing and even increasing their sales this year.
The question of implementation arises. This is where marketplaces come to the rescue — trading platforms designed to make it easier for buyers to find and select a product, and for sellers to reduce the threshold for entering trade. In fact, this is the easiest way to start trading online.
For Ukrainian brands, this is a ticket to buyers from the rich markets of Europe and the United States. You do not need to register a company or arrange supplies for this. It is enough to create a store on the site, and you get the opportunity to sell your goods to the whole world.
The benefits of marketplaces
- Lowest entry threshold for e-commerce.
- The default marketplace provides sellers with buyer traffic. It’s free, but you can get additional benefits for the extra money.
- Narrow-cut sellers — such as meteorite sellers, vintage collectors, or graphic designers — find it easier to find a buyer.
- Marketplace is a good way to do market and competitor research, making it easier to form your own offer.
- Marketplaces are interested in the success of your store. They use advanced technologies to develop their site and — increase conversions, create a modern design and support conversion payment systems.
Trading on marketplaces also has disadvantages.
- Marketplaces need to pay a monthly commission. The price depends on the volume of your sales and fluctuates around 10-15%.
- As with any other site, on marketplaces, you must adhere to policies and internal rules. Because of this, difficulties arise. For example, a seller may be banned without explaining the reason, and to fix the problem, you will have to wait for a response from technical support.
- Whatever one may say, but you will have to face a lot of competition.
But that is not all. When a manufacturer from Ukraine starts selling on marketplaces, he faces several more difficulties:
- Acceptance of payments from buyers from other countries. This is primarily due to the fact that electronic payment systems — PayPal, Stripe and others — do not work in our country.
- Long expensive logistics due to the isolation of Ukraine from the system of international relations and trade.
These two problems for business owners can be solved by e-commerce agencies that work with international marketplaces. They help businesses to set up accepting payments through international payment systems, provide withdrawals, market analysis, store creation and promotion strategies, legal and accounting support, express and economy delivery to most countries of the world. One of these agencies is our Handmade-Hub.
2020 was a challenging year, but 2021 could be a year of new opportunities. Despite all the difficulties and limitations, the retail business has a future. Going online can help local businesses stay afloat — and those who are the first to take their niche on international platforms will be able to feel positive changes in the development of their brands in the coming year.