The Ultimate Guide to International Expansion
Read this quick guide for practical advice on international expansion from someone who led international expansion operations for an 8-figure company.
This guide is applicable whether you’re just getting started or already have significant international sales volume.
Stage 1 - The Exporter
Stage
You’re not focused on international sales, but you’re not going to block it either.
If someone international wants your product and will pay extra shipping, why not?
< 1% of your sales are international.
Signals
Are other brands in your category selling internationally?
Check if they have a multi-language / multi-currency website.
Use similarweb.com to see their international website traffic.
Proxy their international revenue (est. AOV X est. conversion rate X monthly visitors)
If they do, there’s a good chance it will work well for you.
If they don’t, try and understand why. It might be an opportunity to get an advantage.
Marketing
To make a broad campaign such as ASC on meta and simply copy over your best USA ads, then set target audience to test markets such as CA, EU, UK, and AU
Don’t overthink it. Good markets have big populations & disposable income.
Keep this marketing test data handy.
Operations
Use a tool like my DTC Landed Cost Template to see your international profit margins.
If you're at this stage, your international profit margins are lower because you’re paying a premium for international shipping.
Less profit now is fine because if you can prove demand, you can open local fulfillment later. If this is more of a test phase, it may even be worth subsidizing shipping costs.
You’ll ship DDP, meaning FedEx, UPS, etc will handle the shipping + international taxes.
Optimization during later stages starts with knowing your numbers.
Tax / Legal
At this stage, you don't have any international set up. Just ship DDP.
Stage 2 - Test Market Strategist
Stage
You want to increase international profit.
You aren’t ready for local fulfillment, but intl. shipping is starting to get expensive.
Signals
Your international sales went from <1% to 1-5% of total sales.
You’re getting international engagement and web visitors.
Marketing
Create a multi-language & multi-currency support on your website.
Operations
International shipping is hurting margins, so find a 3PL in your country of origin.
If you manufacture overseas, leave 5% of inventory back at your factory.
Ask your manufacturer or find a China 3PL to ship directly to the international customers.
That way, you don’t pay for double shipping, and save on tariff imports.
Tax / Legal
You need a freight partner with an entity in the international region.
They will prepay VAT & duties, and invoice you.
Stage 3 - Local Presence
Stage
International sales are more stable & are showing growth.
You are confident about fulfilling locally, but don’t know where to start.
You know that local fulfillment will greatly improve your margins.
Signals
Your international sales are above 5%.
Operations
It’s time to find trusted partners to import, store, fulfill, and ship your products.
Use google & websites like fulfill.com to reach out to dozens of potential options.
Compare across quality, customer service, and pricing.
Get guidance from someone experienced with 3PL’s.
Bad partners are tricky to spot until you experience costly mistakes and wise up.
Read my fulfillment vetting guide for more HERE.
Marketing
Start basic ad localization by dubbing your english videos into other languages.
Make sure your international web experience is strong.
Tax / Legal
Don’t waste time & money trying to set up local entities.
Instead, make partnerships across VAT tax, IOR, and MOR.
VAT - Find a service that uses IOSS
IOR - “Importer of Record” imports goods under their name for you.
MOR - “Merchant of Record” legally sells goods on their entity for you.
Important note: This depends on stage of business. For example, if you are doing less than $100k, it's generally cheaper to just use shopify markets and pay these costs, roughly 7% total payment processing + currency conversion.
Stage 4 - Growth & Optimization
Stage
International sales are now a fundamental part of your business.
Sales are strong, but they are taking a disproportionate amount of effort.
Signals
International revenue is 10-20% of your total revenue.
Operations
Continue to optimize your supply chain. It’s not set & forget it.
Look into adding another fulfillment node, product bundling, or lowering processing fees.
Review your rates against other 3PL’s to make sure your pricing is competitive.
Marketing
Localize further to make consumers feel like you’re a truly local brand.
Tax / Legal
Make sure you are reclaiming VAT & GST. Many brands forget to collect this money.
