Australian eCom companies selling in the US – What to know
Vaishali Ravi
·March 20, 2024
Australia may be a big island, but it’s a different story when it comes to its population.
Compare Australia’s 26 million inhabitants to the US’ 333 million: Oz averages just 3 residents per square kilometer, while the U.S. boasts 35.71.
If you’re running an ecommerce business, that means there’s only so large you can hope to grow by focusing on the Australian market alone.
But by making an expansion plan to ship products overseas – especially to the lucrative U.S. market – you’ll be able to scale your growth sustainably, with unlimited potential.
In this article, we’ll cover:
- Why focus on the U.S. market?
- Risks and considerations for shipping to the U.S.
- How to market to U.S. buyers
- Managing international logistics and returns
Why focus on the U.S. ecommerce market?
While Australian shoppers have a healthy appetite for ecommerce shopping, domestic buying power pales in comparison to the mammoth revenue opportunities you’ll find in America.
The Australian online shopping market saw revenues of $63 billion in 2023, making up almost 17% of all retail spend. In contrast, U.S. shoppers spent more than $1.1 trillion online, making up 22% of all sales.
Australian shoppers spend less per shop, too: In 2023, the average basket size was $98.10 AUD ($64.33 USD). In comparison, the average order value in the U.S. was $136.93 – almost a 213% increase on the Australian spend.
And under the Australia Free Trade Agreement, Australian exports to the U.S. are free of duty and merchandise processing fees, opening the door to unrestricted commerce between the two countries.
While ecommerce brands may prove their value by starting out close to home, expanding beyond national borders – particularly into the U.S. market – provides a compelling opportunity to introduce your products to millions of new customers who have the buying power to make your business an international success.
Risks and considerations for shipping to the U.S.
Of course, along with any big opportunities come challenges.
For one, the U.S. is more than 15,000 kilometers away – so shipping from Australia isn’t likely to be fast or cheap. Express parcel shipping takes four to eight business days, while the most economical shipping option – sea transport – takes two to three months. You’ll also need to take the weather into account: Heat-sensitive products are a definite no-go, as they’re likely to melt or corrode while en route.
U.S. customs also prohibits or restricts many different types of imports, including alcohol, firearms, food products, or products made from biological materials. Check out the full list of restrictions here.
Before shipping your parcels, make sure that you’re aware of any paperwork or taxes that may be required on your product export. You’ll be required to fill out customs forms, and may also need to fill out a Certificate of Origin for your product. And if you’re shipping food or other organic materials, be sure to issue prior notice to the FDA to avoid delivery delays.
Given the length of the journey, it’s also crucial to ensure that your parcels are packed and labeled adequately, with cross-border shipping labels, ensuring that they will be properly handled over the course of the overseas journey to minimise the likelihood of damages. Accidents do happen though, so make sure that you’ve purchased adequate shipping insurance to cover the risk you face in transit.
Finally, before getting started, you’ll need to register your business in the U.S. with a U.S. federal tax ID, or EIN. It’s not necessary to have a physical presence in the U.S., but if you don’t, you’ll need a registered agent that can receive notices on your behalf.
How to market to U.S. buyers
Fortunately, there’s no language barrier when promoting your products to the U.S. market – but by making an effort to localise your marketing, you’re likely to see greater traction in your new territory.
By using an ecommerce platform like Shopify, you can easily open new international shops that customise your offerings for each region. Localisation opportunities include:
- Language variation
If you want your U.S. customers to feel at home on your site, make sure you’ve adapted your spelling and verbiage to the local market. If you don’t have an American copywriter on your team, sites like iTranslate can help you modify your content. - Currency conversion
It’s important for American customers to see prices in their own currency, rather than be forced to convert from Australian dollars. Shoppers are far more likely to buy products in their own currency, and they’ll see less market volatility. You can either set a fixed price, or use an automated conversion currency tool that updates with changes to the exchange rate. - Payment options
While many Australian shoppers use the debit card system eftpos, that system doesn’t exist in the U.S., though many other currency options do. Make sure that U.S. customers have access to all of their favourite payment options,, which may include credit cards, PayPal, Apple Pay, Google Pay, and “buy now, pay later” options.
Finally, build trust in your brand. Shoppers are more likely to get past the hurdle of purchasing from a brand based on the other side of the world when it has social proof behind it. Showcase your products’ value by including customer reviews and UGC on your site, as well as a flexible return policy to show that you stand behind your products.
Managing international logistics and returns
Getting back to the shipping issue – even the most patient customers won’t want to wait 3 months for their parcel to make it across the Pacific.
The solution? Pre-ship in bulk before marketing your products in the U.S, using a 3PL or local warehouse facility. That way, you’ll already have a regional hub that lets you compete with U.S.-based brands on fast and affordable shipping, and helps you avoid any issues with customs or delivery.
That’s a smart solution as far as returns go, too. When a customer requests a product return, you can use a returns management software solution like Loop to streamline your returns process.
Some products may not meet your criteria for returns at all: If the product isn’t likely to be resold for a profit, encourage the customer to keep, donate, or recycle it. For products that can be resold, you can route them to the nearest warehouse location – whether that’s in Australia, the U.S., or another regional hub. Loop’s Dynamic Routing enables brands to set specific conditions for items to be routed to destinations of their choice, such as the closest store or an outlet location, regional warehouse, resale partner, donation center or manufacturers.
Loop can also make it easier to detect and prevent fraud and returns abuse, which accounts for $101 billion USD in losses annually in the U.S. alone. Our data insights help you get a 360-degree view of your customer, and optimise your operations to maximise revenue and minimise risk – whether shipping domestically or overseas.
By thinking strategically, and bringing on the right technology to support your goals, there’s no limit to your international growth.
Ready to plan your State-side expansion? Get in touch to see how Loop can help you streamline returns.
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