The Pros & Cons of International Retailing
Due to the increased internet access all over the world, it has become much easier for businesses to expand internationally. For example, many retail chains are supplying their products successfully in different countries these days – all thanks to e-commerce platforms and high-end buying apps.
However, international retailing is not as simple as it sounds – it has tons of pros and cons associated with it. For instance, besides enjoying various advantages like increased profits, fan-following, and recognition, international retailers also have to deal with numerous disadvantages like frequent currency fluctuations, language barriers, foreign policy amendments, etc.
So, just in case you are looking to expand your business internationally, then we recommend you take a look at its pros and cons first. It will provide you with a broader understanding of how global retailing works. Let’s get started!
Advantages of International Retailing
Bigger Customer Base
One of the major reasons why companies fish for international clients is to enjoy a bigger fan base. International retailing not only provides the brands with more recognition but also helps them to increase their customer engagement.
So, if you have the right amount of investment and research, then you should always consider expanding your business and reaching out to potential clients around the world. However, make sure that you keep a track of the demographics, and the consumer needs of each country so that you can hit the targeted buyers only.
Thankfully, the internet these days is full of all the relevant information you need regarding the buyers’ preferences in different countries. So, before you finally decide to expand, just make sure that you have conducted the right amount of research. However, the only key here is to connect to a stable internet connection before you start your work – after all, you wouldn’t want your web pages to take too long to load, right?
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International Brand Recognition
Global business expansion provides you with a chance to become more recognized in the market with the help of global advertising and publicity. For example, you can create your identity through your brand name, ethos, and logo to enjoy a significant visibility and growth boost internationally.
It will not only provide you with an opportunity to increase your fan following, and sales but also to learn about the taste, cultural differences, and consumer choices of different buyers across the globe.
Reduced Business Risk
Let’s face it, the corporate world is all about ups and downs – you never know what will happen to your business if any uncertain economic crisis or recession occurs. Isn’t it?
Well, being a part of international retail, you always have an additional advantage of dealing with foreign clients, which certainly means more financial stability. Even if your country is going through some economic crisis, you will still have a chance to enjoy a stable position in the market. That’s mainly because your business fortune will rely on your sales from other countries too, instead of relying on local retail only.
Disadvantages of International Retailing
Foreign Rules and Regulations
Every country has its legal sales and tax laws that need to be considered before making business deals. For example, there could be employment laws, trademark considerations, and legal tax requirements that must be fulfilled in their specific foreign language.
However, the good news is that there are various websites on the internet that can provide you with a complete overview of sales policies in various countries. So, if you wish to know specifically about any country’s sales laws, then feel free to reach out to any reliable consultation site. But before you click on the browser, you need to ensure is connected to a high-speed internet connection so that your websites do not take excessive time to load.
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Coordinating Time Zones
It is one of the major drawbacks of international retailing – it is not easy to keep up with the time zones of different countries.
For example, a classic example could be of retail between an American and Indian company. You will have to deal with an eleven-hour difference, as India is 10 hours and 30 minutes ahead of the United States. Sounds surprising, right?
Although not all countries have a huge time difference, still it is always healthy to minimize time inefficiencies. For example, if your country has to wait until the dawn for a reply to an important shipment mail, your progress might get affected.
However, the only solution could be to hire multiple shift workers so that your emails are catered to on time.
Monitoring Currency Fluctuations
The international market is all about currency fluctuations. If your local currency decreases, the profit gets increased, and vice versa.
Interestingly, countries with weak currencies tend to make bigger profits, as they sell their goods at higher rates to the international market. So, if your home currency is low, then you can offer competitive prices to your clients, as they can afford it much more easily than your local buyers.
Therefore, international retailers need to keep up with the currency fluctuations in every country so that they can make future investments accordingly.