Did you know that 35% of all Shopify traffic comes from international visitors? With more people opting to shop online and decreasing transnational shipping rates, selling to a global audience is more feasible than ever. 5.19 billion people now have access to the internet, which is 64.6% of the worldwide population, according to a Statista survey in May 2023, so the addressable market is more significant than ever. International selling allows you to broaden your reach, expand your business, and spread the risk.
But for every yin, there is yang—there are vital points to consider when adopting a cross-border ecommerce strategy (especially for those running on Shopify). Planning with these actionable tips will help you avoid the common pitfalls of international e-commerce. But before diving into that, you must ensure it’s worth selling internationally.
Today, we will explain how you can start getting internationally on Shopify. First, we will identify whether your online store is worth selling globally. If yes, we will detail all steps you should take to trade internationally.
Let’s dive in!
Is it worth selling internationally
Just as your addressable market will grow when you sell internationally, so will the factors you need to consider.
- Have you calculated the cost of shipping to countries you operate in?
- Have you decided whether you’ll offer free shipping? Or will you bake shipping costs into the price?
- Have you considered the feasibility of getting your product to the customer? In other words
- How long will it take?
- How many suppliers are there?
- What’s the risk of the product being stolen or damaged in transit?
An excellent question: will the profits from selling cross-border be worth your company’s effort to enter these new markets?
Once you know which international markets you want to tap into, calculate the cost of running global operations. Will your projected additional monthly revenue from expanding cross-border outweigh your projected additional monthly cost?
If so, it’s time to prepare your Shopify site for more international traffic.
Use a Multi-Currency Strategy
Most international visitors want to browse and buy in their currency and prices. You should develop a multi-currency strategy for your Shopify store to prepare for international selling.
Selling in multiple currencies lets your customers pay for their orders using their currency. If your business is in one of the following situations, multi-currency is a home run feature:
- You have one or more stores with international traffic and product page views, so you want to boost your conversions among international shoppers.
- You’d like to offer regional stores, e.g., you want to sell in the U.S. and Canada (geographically close and share holiday shopping seasons, but they use different currencies). You could sell primarily in the U.S. (offering multiple currencies) while offering a “regional experience” to Canadian shoppers.
- You’re running on Shopify Plus or have multiple stores with solid international traffic. One of your international stores uses multi-currency to sell to customers in countries you have yet to market to.
In addition to these use cases, adopting a multi-currency strategy has several benefits:
Optimize for Conversions
It’s no secret that offering prices in shoppers’ own currencies increases their confidence in your brand.
Multi-currency ensures that customers see your pricing for every product as a simple, rounded number (e.g. 10.00 Euros rather than 5.26 Euros).
Minimize Abandoned Carts and Refunds
Merchants can significantly impact higher cart abandonment when customers are shown prices in a foreign currency. This is partly due to fears of conversion fees and additional charges that may occur if you pay in a foreign currency.
By displaying a shopper’s native currency as a payment option at checkout, you’re building customer trust and increasing your chances for a purchase instead of an abandoned cart.
International customers will appreciate your straightforward approach to pricing and the lack of effort required to see your pricing in their native format.
How to Offer Multi-Currency
With dozens of highly-rated apps in the Shopify market, it’s easy nowadays to offer multi-currency on your store(s).
Automated software on the Shopify app store can quickly help you:
- Convert currencies for your customers at checkout.
- Automatically round up prices to match your pricing standards.
- Make refunds in foreign currencies without using a third-party app.
But first things first: do you know which currencies you’ll offer on your storefront? Will it even benefit you to offer multi-currency? What will your multi-currency strategy look like? And how do you even get started?
You can navigate through your Shopify Payments settings. Then click on the option to Add a new country/region. Lastly, select the market you want to start selling.
Know where your customers come from
Before you download any apps, consider where your customers come from in international selling.
While this includes knowing which marketing channels drive the most traffic to your product pages, which campaigns are working, etc., you must also know which international markets are most interested in your products.
You can start by looking at your sessions by location report in Shopify’s analytics section.
Suppose you primarily market to American customers but a growing number of orders are coming from Australia. In that case, it’s time to shift your approach and ensure your shopping and checkout experience is excellent for Australian shoppers.
Here are a few multi-currency tools that will help create a seamless experience for international customers:
Bold multi-currency: Bold multi-currency is a free currency converter app on the Shopify app store. The app lets shoppers change currencies quickly and easily via a built-in currency switcher, which works with any Shopify theme.
- Supports all currencies, with every currency included free.
- Merchants can set a specific rate for any currency.
- Supports multiple rounding rules for more accurate pricing, plus allows different rounding rules for different currencies.
- Makes pricing consistent for shoppers by rounding at the product level and carried through into the cart.
Best Multi Currency Converter: This Shopify app is a mobile-oriented converter tool aimed at stores that primarily sell internationally. The app offers an auto-currency switcher that can run 100% in the background.
- Auto-selects currency based on a shoppers’ location.
- Automatically removes price decimals.
- Supports every currency and also works with every Shopify theme.
Auto Currency Switcher: This app automatically detects the user’s country based on their IP and converts the price to their local currency.
- Displays the country flag in the currency selection box.
- Customers can choose where to place the currency selection box.
- User readable price figures (with decimal points removed).
Shopify converts refunds automatically, but for a better shopping and checkout experience for your customers, we recommend one of these three apps to enhance your store experience and maximize your potential for an order—not an abandoned cart.
Use supply and demand to your advantage
A final key consideration for optimizing your pricing strategy is your competition (or lack thereof).
Demand will outstrip supply if you’ve found an untapped market that does not offer access to your product. If you are in this situation, try charging different prices in different markets.
Another method is to increase the price gradually and observe the change in demand. If it doesn’t drop your sales revenue, affect your average order value, or improve your cart abandonment rates, continue exploring different price points until you find the “sweet spot” where the most people are likely to purchase.
But if you’re entering a competitive market in another country in international selling, your competition will likely influence your pricing strategy. In this case, it’s crucial to fully understand your competitors and their strategy, supplier and shipping conditions, and profit margins.
Once you know what your competition is doing, you can:
- Opt for a more profitable market elsewhere.
- Take an aggressive approach and attempt to gain market share.
Of course, this also depends on your strategy—whether you’re pricing on the high or low end or somewhere in the middle.
Accurately Track the Ecommerce Metrics that Matter
When you’re looking to enter a competitive international market, your average customer acquisition cost (CAC) could vary quite a bit. It could also significantly impact your profitability, directly affecting your pricing strategy.
A key performance indicator (KPI) in ecommerce, CAC is the calculation of the total cost of acquiring a new customer. CAC is crucial for Shopify merchants because if your customer acquisition cost is higher than your revenue for long enough, your store will be out of business (in more than just one country!)
CAC generally includes factors like marketing costs, salaries, etc., divided by the number of customers acquired:
Promotional costs ÷ number of new customers = CAC
For instance, if company A spent $200 on marketing in year 1 and they acquired 200 customers in the same year, their CAC is $1.00.
Let’s take another example – an ecommerce company running on Shopify called Fin, which sells protein powders. Fin spent $50,000 on advertising last month, and its marketing team says 5,000 new orders were placed. This means their CAC is $10.
However, Fin’s average order value (AOV) is $20.00, with a markup of 100%. Fin makes $10 per sale and $2.00 per customer, which helps pay for the company’s overhead costs and other expenses.
This is a reasonably simple way to calculate CAC. But how will Fin measure CAC once one of their customers makes more than one purchase or she becomes a loyal customer?
This metric would be Fin’s customer lifetime value (LTV or CLV), whose purpose is to form a better (and more accurate) idea of what your customer’s CAC means to your store.
Shopify merchants need to calculate their LTV accurately and track it consistently. Why? Because both customer turnover (churn rate) and profit depend on your customers’ desire to continue engaging with your brand and returning to your store for more purchases. Here’s one way you can calculate lifetime value, though the results will be incomplete (see the section below):
LTV and CAC are closely tied together as the metrics that should receive most of your attention. By itself, LTV is the best indicator of future churn (the live-and-die metric for Shopify stores), your best projector of profit, and perhaps the most significant help in making marketing and sales decisions, such as:
- Should you continue selling in this country or this region?
- Would you increase/decrease our prices for this particular buyer group?
- Can you offer discounts, rewards, or other incentives for this buyer group?
Create an International Pricing Strategy
After following the steps above, you are now selling in international markets where customers can quickly discover and browse your products and buy with their currencies. In this step, we will learn to take control of your international pricing.
Shopify automatically converts your pricing to your customer’s currency using a live exchange rate. But do you want to sell at the same price? It would help if you kept in mind that your product pricing will change as the market dynamics change. And since you are not selling in the same market anymore, you should update your prices based on the different countries you are selling.
As a solution, consider working with competitor price tracking tools. They can help you track your competitors in the new markets you are selling. In that way, you can better understand the market dynamics and the strategy behind their pricing.
You can set specific international product prices without wasting time and effort. The image below illustrates a great example of how it’s easy to track competitors’ pricing automatically. Doing so allows you to create different rules to differentiate your products based on their sales performance.
Establish a Global Marketing Strategy for Internationalization on Shopify
Now, you’ve gone to the international market with international selling. After establishing your website and creating a pricing strategy. The ultimate step is to let target customers know about you. They should be aware that they can purchase from your store.
To help speed up this process, your marketing strategy should be aligned with your brand. Don’t say and promote your products differently than you were doing before. You can start by sharing that you are selling internationally but detailing with countries you are selling to.
Advertising nation-specific is another excellent way to reach your target customers. In Google Ads, you can target specific regions and direct them to the new version of your website where you want to get traffic and where they can buy your product.
Ensure Your Shopify Tracking is Accurate
Unfortunately, many merchants are stabbing in the dark when calculating LTV.
And even a data powerhouse like Google Analytics can’t correctly calculate LTV. So many merchants resort to their own Google Sheets calculations (or online LTV calculators).
Luckily, automated solutions for calculating LTV and CAC are accurate and are designed explicitly for those who sell on Shopify.
By fixing your tracking, you’ll get accurate data about your marketing attribution (to see which paid campaigns are working and which aren’t). Shopper behavior, and ecommerce events like adds-to-cart, removes-from-cart, cart abandonments, product page views and clicks, your customers’ entire checkout flow, and more.
International selling has several unique benefits, such as:
- Multi-store growth.
- Tapping into new audiences.
- Higher potential success for products that may perform better in other markets.
But to be successful and profitable, you can follow the steps we have mentioned. The correct currency considerations must inform your pricing strategy, shipping strategy, and accurate calculations for the metrics that matter.international selling