What should you pay attention to when exporting to Europe?
The advantages of expanding are numerous. First and foremost, the growth potential is inspiring. But to convince foreign customers of a product’s merits, it takes more than the desired Swissness.
The following chapters explain which hurdles you’ll confront on the way to becoming a successful exporter, how to overcome them and with which strategy you can optimize your Key Performance Indicators (KPI) in eCommerce.
Opportunities and dangers when expanding abroad
Every export business carries risks. Goods may not arrive in time and payment "by cash on delivery" can fail. When the advantages and disadvantages of export concepts are weighed up, the advantages outweigh the disadvantages.
Exporting within the EU in particular opens up opportunities to profitably expand a business model.
The population density in the EU is extremely high.
Only in urban centers in India and China can higher population densities be found. However, the European market is characterized by higher purchasing power compared to the Indian or Chinese counterparts.
In the “Western world”, consumption is higher than ever before, not least because of the low interest rate policy of the European Central Bank.
Furthermore, exporting from Switzerland to neighbouring countries such as Germany and Austria makes sense both in terms of language and logistics.
You can easily communicate with customers, provide information, solve problems and enter into partnerships.
Last but not least, cross-border e-commerce between Switzerland and the EU Member States benefits from generous free trade agreements: regardless of the rising global punitive tariffs, trade in goods between Switzerland and the EU is guaranteed. So is political and infrastructural security.
In other words: thanks to the well-developed rail and road network, goods are delivered very quickly, the peaceful democracies guarantee legally compliant purchase transactions and no customs duties are charged for cross-border consignments up to a value of EUR 150.
Increase customer satisfaction with exports
A common reason for dissatisfied customers: shipping costs increase the cost of the product, but the customer’s requirements are not met.
The deeper one digs into one’s pocket, the higher the expectations of the buyer.
Consequently, even perfect goods can ultimately give rise to dissatisfaction. However, the decision to ship Swiss products abroad is inevitably linked to additional costs.
To ensure that Elephbo’s customers do not have to pay customs duties, the items are shipped duty paid.
Read more in the Elephbo case study.
Customs duties may be waived up to a goods value of EUR 150 thanks to the free trade agreement between the EU and Switzerland, but VAT is still payable.
If the retail value of the item is more than EUR 22, it is subject to VAT in most countries.
It is possible to pass on the VAT to the recipient by shipping by Delivered at Place (DAP), with the customer paying the fee when receiving the goods.
However, this approach leads to immense damage to your image within a very short time: customers quickly express their displeasure about the surcharge on social networks and the name of your shop or your product is associated with dubiousness.
Your expansion abroad then not only risks to fail, because the World Wide Web knows no borders: if your Swiss customers learn about the complaints, previously loyal customers will also distance themselves from your e-commerce business.
If you want to know how to send goods abroad inexpensively, you can find all the information you need in our article: Cross-border e-commerce: wow to export inexpensively to Europe.
Take the wishes of your foreign customers into consideration
Especially in the set-up phase of an export strategy, an uncoordinated shipping solution can have devastating effects.
If you have to make a name for yourself or your product abroad, bad PR can mean the premature end on the way to becoming a global shipping expert.
However, if you master the transport from the warehouse to the recipient with skilful logistics, you can count on satisfied customers.
Word-of-mouth and online publicity will help you get on your feet! Therefore, only entrust the shipping of goods to reputable and proven shipping service providers such as Asendia Switzerland. This will ensure that you will not only score points with the “Made in Switzerland” label.
A transparent price structure, reliable and fast deliveries will inspire your customers.
Would you like to calculate your export costs? Here you can access the Optimizer
Wrong decision in product placement
In cross-border e-commerce as well as in domestic e-commerce, product selection and product presentation are considered important elements of a successful sales concept.
Is there “healthy” competition in the sector? Have similar approaches or products already failed? Which regional interests/customs should be taken into account when placing products?
Are certain groups of people (e.g. professional or age groups) particularly suitable as customers? You should definitely find answers to these questions before expanding and integrate them into your sales strategy in the best possible way.
Why you need to get into cross-border e-commerce
In Switzerland, there are definitely opportunities to win over customers with high-quality and innovative products.
However, the advantages offered by exporting can compensate for many domestic “weaknesses”, so expansion is inevitable for a profitable business model.
The limited Swiss market under the spotlight
Conducting trade via e-commerce in Switzerland is now a breeze.
Some types of shop software make it possible to design a website quickly and, in the age of online banking, payment processing is more convenient than ever before.
However, if you limit yourself to the Swiss market, there are real limits: the very heterogeneous population – both linguistically and culturally – cannot be consistently enthusiastic about your product.
Due to the multilingualism, your product can also quickly become known abroad. If you have to deny interested foreign customers access to your product, there is a risk of negative feedback.
The disappointing feedback of customers from abroad is taken up in Switzerland, and the reputation of your shop dwindles.
From the point of view of the Swiss seller, the surrounding countries should be regarded as ideal export destinations.
Exporting to neighbouring countries
Exports to Austria, Germany, France and Italy can compensate for slack demand at home in view of stable gross domestic products, secure wages and high internet usage.
But why limit it to countries like Austria, Germany, France and Italy?
If you dare to take the step of exporting, you will inevitably have to deal with legal provisions such as customs duties and warranty guidelines.
As these apply throughout the EU, a gradual increase in exports to the entire EU is more a logical consequence than a question of feasibility.
To export or not to export?
Swissness enjoys a good reputation. However, different risks of exporting deter many salespeople from going international: “Less is more” or “Better to do the tried and tested well than to do the new badly” are the thoughts of many people who want to stay in the Swiss market and do not recognize the advantages of exporting, or rather don’t want to see them.
Such apprehensions are perfectly understandable.
Case studies of failed shop operators, for example, can take away the courage to expand. But times change! You have the chance to place your product more smartly than your unsuccessful predecessors and to export it cost-effectively to the whole world with Asendia Switzerland.
Why not take the step and conquer the market as a first mover?
Overview of the risks and opportunities of export trade
Hazards and obstacles
Low product demand abroad
Due to the exchange rate, the product in the EU is too expensive
Legal requirements for the online shop exceed the capacity of the software department
Excessive customs and shipping costs
Lack of knowledge in tax law and language barriers
Increased administrative costs for the shop operator (e.g. customs and tax law)
Opportunities and arguments
Swiss products are in demand abroad (keyword Swissness)
Many EU citizens are willing to pay more for the Swiss image than for domestic products
Online shops from Switzerland are considered very trustworthy, so the customer is prepared to pay in advance
The profitability of capital increases significantly with product expansion into the EU
If you have any questions about the requirements for your shop, we are here to help you with our experience and expertise.
Thanks to the shipping option by mail you can export many goods very inexpensively
To the point: requirements for a successful export concept
Given the wide range of products and sellers, it is not surprising that the expectations of the customers are very high.
The customer’s wishes must therefore be fulfilled: if you cannot offer a positive customer experience, your reputation and sales rates will decrease.
Of enormous importance, for example, is price transparency: you should always indicate the actual costs on your website. This includes the calculation of duties as well as the consideration of taxes and shipping costs.
In addition to the total landed costs, customs clearance is a further fixed point
You will quickly annoy your customers if you have your goods cleared through customs by the customer.
If the recipient has to pay for customs clearance at the front door, negative reviews and complaints are inevitable.
Better: use Asendia Switzerland as your shipping expert, take advantage of the DDP customs clearance option and provide your customers with a reliable and understandable pricing concept. Honesty is the best policy!
Honesty also includes the clear indication of the shipping status, including shipping time. Since track and trace makes it easy to locate goods consignments, this should not be an obstacle: you can provide your customers with information about the whereabouts of their order via a link.
Push mails also automatically notify you when the shipping status changes significantly.
Last but not least, in cross-border e-commerce you should consider the possibilities for returns and flexible delivery: customers do not like to be pressured and expect the option to be able to withdraw from their purchase decision.
If you offer your customers this option, you will certainly be rewarded with positive feedback.