Navigating the Global Marketplace

Lara Jelowicki

September 10, 2021

For many brands, expanding to new global markets and ecommerce marketplaces can be an untapped gold mine. Selling in more places and putting your product on more marketplaces can broaden your brand’s reach, act as a defense strategy against unauthorized sellers, and ultimately drive revenue.

But navigating the global marketplace on ecommerce is a lot easier said than done. Expansion can be massively expensive and time-consuming. If you don’t perform your due diligence and expand wisely, your untapped gold mine can quickly become a financial sinkhole.

While it would be impossible to adequately cover every aspect of navigating the global marketplace in one blog post, below we’ll present a few introductory ideas to keep in mind as your brand considers expanding.

Is your brand ready to expand?

While it may be easy to decide to sell on additional domestic marketplaces, deciding whether to sell on the global marketplace is more complicated. Here’s what to keep in mind to help make that decision:

Are you established in your home market?

It’s best to hold off on international expansion until you’ve reached peak sales in your domestic market. If you’re only selling $1 or $2 million in the U.S., it’s unlikely that you’ve reached your peak. Instead of focusing on internationalization, you should be focusing on your homegrown market and building your reputation.

Are you financially ready?

If you have reached peak in your domestic market, however, you should then consider if you have enough capital to fully invest in the global marketplace. Expanding to additional global markets isn’t cheap, and brands need to be prepared to cover regulatory costs, marketing spend, and other hidden fees. If you’re not prepared to invest, your expansion won’t be successful.

What are your international goals?

It’s also wise to establish your goals for launching your brand internationally. Once you hit a new market, it’s like setting up a new company — you probably won’t be profitable for 3-5 years. From the start, your strategy should be focused on the long-term. Entering the global marketplace isn’t a casual commitment that you can dip into and out of.

Do you have the resources?

Finally, ask yourself if you have the right resources and team members to facilitate a smooth international launch. You need to have a plan in place for reading reviews in foreign languages, speaking to international partners, arranging logistics, and following international regulations.

Strategies for the global marketplace

If you’ve considered the points above and feel like your brand is ready to enter new markets in the global marketplace, there are a few strategies you should consider to optimize your chances for global success.

**Research, research, research **

Research is a core internationalization strategy that you can’t afford to skip. Brands need to conduct research upfront to understand if the investment into international markets is worth the cost, and then continue to research to know the best strategies for their brand and markets.

Before expanding, brands should research which international markets to expand to in the global marketplace and how. The top 5 global ecommerce markets are the U.S., Germany, the U.K., Japan, and China. It’s logical to start with established markets since they’re already home to solid ecommerce infrastructure, making distribution logistics more simple. Even if there’s a large population and demand for your product in a given country, it will be difficult to scale your business if adequate technology, road, and delivery infrastructure aren’t in place.

While it’s good general advice to focus on large markets, this only applies if your brand’s product resonates in these markets. You should conduct a thorough analysis to determine whether there’s sufficient demand and opportunity for your brand and product category in a given market on the global marketplace. Conducting a competitor analysis can also help you identify gaps in the market and see how brands similar to yours are being represented on the marketplace.

Once you’ve decided where to expand in the global marketplace, you should also consider factors like pricing, translation, and regulatory and labeling needs. Determining international product prices isn’t as simple as converting your domestic price to a foreign currency. Instead, you should research the competitive landscape in the target market, be aware of local taxes, and factor in the additional costs you have to cover (like shipping and regulatory costs) to sell your product internationally.

International regulations are another consideration to research. Some ingredients may not be legal in foreign markets, and some countries may require labeling in the local language. Brands that sell supplements, for example, need to be aware of international regulations on supplements and how they might need to adjust their products to avoid getting shut down.

Understanding your customer is always important, but it becomes especially important while navigating the global marketplace. Ask yourself who your customer is, why they shop on marketplaces, what they’re searching for, and if there are similar products in the market already. Are their purchases driven by convenience factors? How can you tailor your messaging to match what they’re searching for? And how can competitors already in the market impact the demand for your products? You should answer all of these questions when creating your initial internationalization plan.

**Start small and work to full localization **

Like we’ve discussed previously, expanding to the global marketplace is an expensive process. To avoid the risks of heavily investing in a market where your product may not succeed, we recommend a three-phase internationalization process.

Phase 1 consists of testing your demand and ensure that enough customers exist in your target market to expand there. You can start by opening international shipping from your website or Amazon. In phase 2, you can continue cross-border selling while growing your demand with local marketing. When demand has grown enough to warrant the investment, brands can move to full localization, or phase 3, by creating a local entity and local marketplace listings.

Using this 3-step process can help brands mitigate some of the inherent risks of investing in the global marketplace.

**Localize while staying true to your brand **

Brand consistency is important, but when it comes to internationalization, so is adaptation. Your words might not translate well into the local language, making it necessary to alter titles or marketing content better catered to your international audience. The goal is to maintain your branding and the look and feel of your brand while adapting to local customers on the global marketplace.

Overwhelmed? Pattern can help

We’ve barely scratched the surface of the most basic principles of navigating the global marketplace. The process is both complicated and potentially overwhelming, even for brands that are incredibly successful in their domestic markets. However, Pattern has experience helping brands successfully launch internationally, increase sales, and exceed their goals.

By partnering with Pattern, we can facilitate this process and help you mitigate many of the risks of entering the global marketplace. We’ll handle due diligence and upfront research for you, helping you craft an effective long-term strategy while avoiding typical mistakes. We can work with your brand to help you prepare and know when to expand—or, if you’ve already started the process, we can assess your progress and help you do even better and perfect your marketplace management. We have the resources, staff, services, and infrastructure to ensure your international launch goes as smoothly as possible.

Interested in learning more? Get in touch for a free consultation or download our Internationalization Checklist to determine your brand’s readiness for expansion.

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Aug 4, 2022

Ecommerce Innovators Podcast - Achieving Growth Through Technology

Join us for Ecommerce Innovators, a podcast that brings together the brightest minds in the industry to explore innovative strategies and trends in global ecommerce. We'll analyze what top brands are doing to accelerate their online success and you’ll hear from top executives who are changing the game for their organizations. Our host is John LeBaron, Chief Revenue Officer at Pattern—the premier partner for global ecommerce acceleration.

Listen on Spotify

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In our conversation with John Wessel, CTO and SVP of Product & Digital at Fresh Water Systems, he talks about digital transformation, innovation, and growth. Hear about the many hats John’s wears, how the company has transformed since the 90s to stay cutting edge, the pharmacy part of the business, aligning and prioritizing multiple channels, and competing with Amazon.

Ecommerce Innovators Episode Synopsis

As we interviewed John Wessel, here are some things we learned:

Content leads to search ranking. For Fresh Water Systems’ ecommerce site, around 70% of their traffic is to the blog. The secret for content is “well-researched, well-written, long form content that is informative”. John explained that they have an SEO team who writes 5000+ word posts that are researched and documented. People read these blogs and comment, which drives more traffic to the blogs.

Ecommerce is changing the shopping game. John shared an interesting story about a plumber who orders parts every Friday night online, from wherever he can get the best price. He doesn’t have relationships with one supplier or an auto-renew subscription for his parts. Instead, he finds the best price just for the parts he needs every week. John thinks the trend of price shopping will continue, especially as ecommerce grows.

Invest in customer engagement, but don’t invest a lot of time into emails. How many advertising emails do you actually read? Companies often spend a lot of time doing A/B tests and crafting the “perfect” email. However, John pointed out that almost no one reads emails anymore. Instead, invest your time into different brand touchpoints you will have with your customer. You can still send emails, but make sure you dedicate less time to the process.

Listen to the full episode for free on Apple Podcasts, Spotify, or wherever you get your podcasts.

Aug 4, 2022

How Disjointed Sellers Take Away Brand Control on Ecommerce Marketplaces

A top issue we see with brands struggling on ecommerce marketplaces is a loss of brand control due to disjointed sellers—those that aren't following your brand policies and guidelines when selling your products online. Disjointed sellers can be gray market, unauthorized, and rogue sellers, as well as 3P and other sellers that are noncompliant with your branding, pricing, and other forms of representation online.

It can be very easy for brands to lose control of their ecommerce strategy when they can’t get a handle on disjointed sellers. Typically, these brands are either stuck in a game of whack-a-mole or just ignoring the warning signs of bigger issues and hoping for the best. But, when disjointed selling isn't handled right, the consequences can be devastating to profitability. A loss of brand control doesn’t happen overnight, and the factors that contribute to it are long-standing. 

Erode Consumer Trust

Before the advent of ecommerce, brands favored a wide distribution. It was the easiest way to get products to as many distributors as possible. But wide distribution, when left unchecked, leads to leaky distribution—allowing your excess products to end up in the hands of unwanted sellers.

So brands that continue to operate with a wide distribution strategy are losing brand control and are damaging their brand equity and product performance. Why? You’re unable to monitor your products’ pricing, performance, or quality. You can’t dictate how you’re represented by each seller, creating an inconsistent and false representation of your brand to your new and existing consumers. These issues often lead to poor reviews and erode opportunities to build trust with future customers.

Wear Away Brand Equity

In today’s ecommerce landscape, marketplaces and digital platforms connect people and sellers to make online shopping simple and seamless. They also provide customers complete price transparency. Google, for instance, allows consumers to access any of your products on virtually every ecommerce channel and retail location and posts them side-by-side for you to comparison shop.

Now, everyone from your D2C distributors to large marketplace sellers, legitimate 3P sellers, and rogue and unauthorized sellers are on a level playing field—they’re all presented to the searching consumer, and that consumer has the purchase power.

Disjointed sellers have just as much power and authority to represent your brand as you do, without the same quality, pricing strategy, and customer focus as you.

Cause Competition and Price Matching Issues 

In most shopping scenarios, consumers will choose to purchase a product from whichever seller offers the lowest price. Marketplaces like Amazon and Walmart know this, and optimize their product selection based on all retail offers to serve consumers the lowest price for the same item.

This means that as one seller drops the price of your product, the next will follow, and then the next, etc. Everyone gains access to the product at or below MSRP. This opens the door for unauthorized sellers to purchase inventory during promotions or at discounted prices and then turn around and sell the same product slightly below competing sellers’ prices—for profit.  

As customers search for your product, they notice the cheaper price and purchase from the unauthorized seller, rather than paying the price you’ve established with your retail teams. Simultaneously, as Amazon monitors their product listing against other available channels, they notice they don’t have the lowest price. So Amazon, and other marketplaces, in service of the consumer, drop their price to match the lower price offered by an unauthorized seller. To stay competitive, your other channels follow suit. The cycle, also know as the profitability death spiral, continues to drive down the price of your product, grinding away your margins and profitability.

This doesn’t sound like much of a problem if your brand isn’t actively selling on ecommerce marketplaces, right? Unfortunately, it causes big issues for your brick-and-mortar sales, too. Large retail chains like Best Buy and Macy’s noticed this potential loss of sales from ecommerce and needed to defend and protect their profit. Retailers started telling brands that, in order to keep their products in-store (which accounts for 80% of most brands’ sales) they would need to lower their prices to match online prices. Which led to the concept of price matching. If a customer could prove the price of a product was lower somewhere else, Best Buy would match the lower price and charge the brand for the difference.

As other brick-and-mortar retailers jumped on the trend, brands started to see large losses in their margins.

Gain Ecommerce Control with Pattern

The danger that disjointed sellers pose to brands is enormous—without a way to control all of a brand’s distribution points on ecommerce, your brand spins farther and farther down the profitability death spiral. Using custom technology and data-driven insights, Pattern can identify disjointed and unauthorized sellers for your brand and develop a custom strategy tailored to your specific needs to address these big issues as soon as possible. Then, Pattern partners with the econtrol law firm, VORYs, to enforce take downs and save brands who find themselves caught on any stage of the death spiral.

With the right resources and expert help, we’ve helped hundreds of brands to regain their footing and control on ecommerce, win the buy box, and grow their sales. 

Contact us today to regain your brand control.

Aug 3, 2022

How Pattern Took Sylvania Beyond Amazon to Achieve Double Digit Growth

As the leading automotive supplier and long-time brick-and-mortar brand of high performance lighting products, Sylvania was facing challenges to increase profitability on ecommerce.  Exclusively available on Amazon and direct to consumer, Sylvania built a strong seller network, with huge market share, but was having issues with compliance and optimizing ecommerce.

As the top ecommerce accelerator, partnering with Pattern provides the expertise and deep marketplace knowledge to identify additional marketplace opportunities for brands, and the strategic teams to effectively launch on global marketplaces. Partnering with Pattern was critical for Sylvania to grow its profitability on and beyond Amazon.  

Pattern Develops and Launches a Custom Marketplace Playbook

By effectively evaluating the opportunity for new customer growth, increasing profitability, and outperforming competitors, Pattern’s marketplace experts and brand managers went above and beyond to help Sylvania diversify its ecommerce portfolio.  

In addition to creating an eBay storefront, Sylvania expanded its products to Target+ and Walmart.com. In some instances, like on Walmart, Sylvania was already available on the marketplace but changed its strategy from a 1P seller model, which has its own challenges and roadblocks, to a 3P partner seller model–naming Pattern as its partner.

Whether it was launching on new marketplaces or shifting its seller strategy to achieve greater marketplace success, Sylvania benefited from Pattern’s relationships with and deep understanding of how to succeed on marketplaces.  

In addition, as an ecommerce accelerator, Pattern invests in Sylvania’s product and manages the brand’s entire ecommerce journey on each marketplace. This partnership takes the stress and fear out of launching somewhere new so the brand does not need to understand the nuances, best practices, and details of each individual marketplace.

Sylvania Sales Jump Almost 100%

Not only did Pattern help Sylvania with their simple goal to increase its availability on marketplaces beyond Amazon, the ecommerce accelerator helped the automotive supplier achieve: 

Exponential Sales Growth:

  • 97% sales revenue growth YoY from November 2018 to November 2019

  • 151% unit sales growth YoY from November 2018 to November 2019

Flawless Marketplace Growth:

  • Sylvania has expanded to Amazon, eBay, Target+ and Walmart, all with Pattern’s strategic marketplace expertise and knowledge

  • Target+ is difficult to get approved to sell on, but Pattern’s marketplaces team and its resources was the necessary advantage to get Sylvania listed

    • Pattern managed the administrative and compliance logistics to get products approved, listed, and optimized to match other marketplaces

    • Pattern is also working with Target to redefine categories so they better match Sylvania’s products 

  • Pattern’s customer service team helped Sylvania’s eBay business achieve 100% positive customer feedback

Pattern has the resources necessary for a brand to take control on existing and launch on new marketplaces.

"Pattern is truly an extension of our brand. They know what they are doing when it comes to everything needed for a brand to succeed on marketplaces.”

- Chris Mitchell, Sylvania OmniChannel Analytics Manager

Contact us today to build your game plan for and take control of your marketplace strategy.