Selling internationally with Shopify: Here's how it works

E-commerce allows companies to reach far beyond their local borders. Selling on international markets brings many advantages: more potential buyers, more sales and less dependence on local markets are likely to be the biggest advocates. Nevertheless, an internationalization strategy needs to be well thought out in each of its phases and planned with sufficient advance notice. In this post, we explain the things to consider and how to implement international sales with Shopify.

When is international sales worthwhile?

There are signs when it is the right time for you and your company to internationalize. We have listed some of them here.

Your company has established itself on the domestic market

If you are already making steady profits in your core market and have a solid market share, it may be time to expand. The local market gives you the necessary security, because even if your internationalization does not immediately achieve the desired results, your company will remain stable.

You already generate sessions and sales in other countries

Analysis tools such as Google Analytics and/or the statistics section of Shopify can also provide indications that internationalization is worthwhile. There you can see the regions from which the accesses took place. If you also achieve sales in the respective country, this indication is even clearer.

The ROI of your ads decreases

If you run ads on Google or Facebook, you'll notice over time that their ROI decreases. In this case, too, internationalization can be worthwhile to counteract the trend. The return on investment of your ads decreases if you have already reached the maximum of your local target group. All potential buyers have already become customers or do not intend to buy from you. If this is the case, you should look for new markets.

Is your product suitable for international sales with Shopify?

Even if everything suggests that your company would be ready for expansion into new markets, this does not necessarily apply to your product. In doing so, you should clarify the following questions.

Can your product be shipped (economically)?

When internationalizing, the physical characteristics of your products can be a problem. If they are too heavy, too big or too bulky, customers are likely to pay a high extra charge for delivery, which makes them no longer attractive as a supplier to order from. In addition, delivery can take a long time.

You could move your production abroad or use an external shipping warehouse to be closer to buyers. However, this comes at a high cost. For this reason, you need to weigh whether you can ship your product economically before going international. The smaller your product, the easier it is to manage logistics. Digital products are probably best suited for expansion, as you can offer them for download in other countries regardless of shipping.

Does it satisfy local needs?

Even if you achieve good sales with your products on the local market, this is not necessarily the case on other markets. Buyer preferences can vary greatly from region to region and are influenced by local living conditions. You will probably have less success with air conditioners in Scandinavia, but it could be different in Southern Europe or North Africa. Likewise, products that require a cultural connection (e.g., fan merchandise) are only suitable if the local community can identify with them.

Single Store with Multi Currency vs. Multi Store: What are the differences?

There are two different approaches you can take to internationalize your Shopify store.

In the multi-currency strategy, you have an online store that displays content in different languages and currencies. This option is characterized mainly by your user-friendliness. Visitors can browse your store and switch between languages - or you can automate the currency displayed based on the IP, more on that in this article. A multi-currency store has the advantage that you can very easily add a language and test new regions. A disadvantage is that not all apps support multi-currency and there can be compatibility issues.

With a multi-store, you create a separate instance for each language. This requires more effort to set up, but is worth it from an SEO perspective. One option for a multi-store strategy is to create subdomains for each language. You will learn how to create them later in the article.

Preliminary consideration: In which markets is it worthwhile to sell internationally with Shopify?

Freely following the motto: "A lot helps a lot", an answer could quickly be found when selecting the markets that come into question for internationalization: As many as possible. After all, many markets mean many potential customers, which is good for sales and ultimately leads to higher revenues, correct? Not quite. On paper, this approach may be a logical one, but it doesn't stand up to scrutiny. Just as when entering a local market, it is also - if not primarily - important to take a close look at potential markets when internationalizing. After all, buying behavior in other countries is not necessarily the same as in your home country.

For the selection of suitable countries, the aforementioned look into analysis tools can be worthwhile. If there are no or only a very small number of sessions from other countries, this does not have to mean the end of your internationalization strategy. However, you should still pin down one or two target markets to which you would like to expand your business. For retailers from Germany, Austria and Switzerland would be a good choice, as the DACH region shares a mother tongue and is characterized by similar buying behavior.

Prices: Show prices in local currency (with Shopify Payments).

33 percent of international visitors on Shopify would not consider making a purchase if an item was not priced in their local currency. Based on this statistic, you can see the importance of having appropriate currency settings for your chosen markets.

In order to make currency settings with Shopify, you must sign up for Shopify Payments.

Countries and regions can then be added in the Shopify Payments settings. Once that is done, Shopify can display product prices for that country based on your base prices and a real-time exchange rate.

With Shopify apps such as Geolocation, Geolizr, or Advanced Store Localization, you can ensure that visitors always see prices in their local currency and sometimes even see different content and products. To do this, the app determines the location based on the IP address. Fees are incurred for currency conversion, which are taken into account in the automated prices.

Manual determination of international exchange rates

Price conversion with Shopify Payments is automatic, which is convenient because you don't have to do any more work after the one-time setup. However, you may want to set a manual exchange rate for certain countries, perhaps because consumers in the target region are more price-sensitive than in your country of origin, or because new pricing would allow you to fill a niche in the market. In addition, product prices can change as the market fluctuates, which can lead to customer confusion.

To counteract this, you can make manual price adjustments and preselect a fixed conversion rate for a specific country. However, this requires at least the Shopify plan. Advanced Shopify and Shopify Plus also allow you to set specific prices for certain products and/or categories.

Legal framework: What are the hurdles?

Different country, different laws. You should pay special attention to the legal framework in your chosen market if you want to sell internationally with Shopify. This is because there may be legal barriers that could block the import and/or sale of your products. What is approved in this country does not have to receive clearance in international markets. This is especially true for food, medicines or cosmetics.

In addition, the tax laws of different countries sometimes differ significantly. Here you should make sure that you pay the (value-added) tax correctly and consult a tax advisor in case of doubt.

Show/hide tax rates in Shopify

There is also a difference in jurisdiction depending on the country of reference as to whether an applicable tax rate must already be displayed or charged on the product page or whether this is only done at checkout. In the USA, for example, the VAT is not shown on the product page. However, throughout Europe and the Asian region, it is.

Shopify can make the decision whether to display the tax rate or not based on the access country itself. You make this setting in the tax permissions under Settings > Taxes. To do this, you need to check "Include or not taxes depending on the customer's country".

Logistics: How do customers receive your product?

The internationalization of a Shopify store also requires suitable logistics. You should already make a selection of suitable shipping service providers in advance, who supply the target region and know their conditions exactly. By connecting fulfillment service providers, you can often save time and nerves here, because most of them also provide worldwide shipping through the large network of shipping services.

Set up shipping zones in Shopify

If you ship your products to different countries, the same shipping rates will not apply to all of them. Tend to be more expensive to ship internationally than domestically.

In Shopify, you can assign shipping zones, or specific areas of applicability, to the shipping rates you define. This is done under Settings > Shipping and delivery. There you select the shipping rate you want to assign a shipping zone to and assign a name and the countries you want to include in the zone.

Localization: Country-specific domains and translated content

80% of users would prefer to store online in a store that uses the customer's native language. Content translation is therefore an essential lever for internationalization with Shopify.

Before we turn to translation, let's turn our attention to country-specific domains. These are a valuable identifier for store visitors to identify with their country of origin. For example, if your customers see a domain ending in .fr, they will immediately know that it is a page with French content. In addition, the endings are also important for the SEO of your store, because Shopify automatically assigns a domain the appropriate country tag, which is used by search engines to determine which country a website belongs to.

Set up country-specific subdomains

An alternative to generate country specific URLs are subdomains like uk.yourshopname.com. These can be added directly in the admin area and do not incur any additional costs, provided you manage your domain directly via Shopify. If you have registered your domain through a third-party provider, you can set up the subdomain through them and connect it to Shopify.

Translate website content

When selling internationally with Shopify, it may become necessary to translate content on a website. For merchants from Germany, this would be the case if they do not want to sell within the DACH region or if other markets are served beyond that.

There are quite a few Shopify apps that can help you with translation. Most of them are paid, but offer a 7- or 14-day trial. You can use machine tools for translation, such as DeepL or PONS. The quality of these tools has improved significantly in recent years, making them a real alternative to manual translation, for which you may need to hire a translator if you do not know the language you want to use. Nevertheless, a manual translation is still the more precise one. You should consider this option when your internationalization is gaining momentum and you have already achieved initial success.

Apps for internationalization

Here are some more handy tools for internationalizing your Shopify store.

langify

Probably the most popular Shopify app for content translation is langify. It even sets a country tag for translated pages and thus eliminates a weakness of multi-currency stores. However, langify does not have integrated machine translation. After the 7-day trial, the app costs $17.50 per month.

To the app

Translate & Currency LangShop

Translate & Currency LangShop is also a very popular plugin for translation that also has machine translation. The app offers a 14-day trial and then costs $34 per month after that.

To the app

Locksmith

If you decide to have a multi-currency store, it would be fatal and unfavorable for the user experience if customers see content they are not supposed to see. For example, users from Austria should ideally only see products that are also available in Austria. Otherwise, there is a risk of bounces from your store. Locksmith makes it possible to play out specific content for specific user groups.

The price of the app is based on the Shopify plan and is $9/$29/§99/$199 per month.

To the app

Tax Exempt Manager

Paying sales tax across multiple countries can be costly. With the Latori app Tax Exempt Manager, you can realize B2B sales without VAT - at least in the EU. It's a great way to comply with EU directives and increase sales. There's only a $9.99 a month cost for this. You can test the app free of charge for 14 days.

To the app

Conclusion
There are a number of different aspects to consider when internationalizing. However, when it comes to logistics, pricing, and translating your content, Shopify offers some important features that make it easier for you to enter new markets. We have already served many international customers and are happy to help you with internationalization as well!

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