What UK/GB companies need to know before selling in the US
Carly Greenberg
·February 28, 2024
If you run a retail business based in the United Kingdom, it’s well worth considering expanding your business internationally. While you’ll find nearly 60 million ecommerce buyers within the region, tapping into an international market offers lucrative new opportunities to grow your customer base exponentially.
By expanding your retail brand to the American market, you’ll be able to reach more than 282 million prospective buyers for your products — without the difficulties of adapting your marketing and customer service to new languages.
That said, selling products to the American market isn’t without its challenges. In this article, we’ll cover:
- Benefits of exporting products to the U.S. market
- Strategies for expanding into the American market
- Building a business beyond borders
The benefits of exporting to the U.S. market
Last year, UK-based businesses exported £188.5 billion worth of product to U.S.-based customers, representing more than 21% of the entire UK export market.
Why is the American market so attractive to UK-based businesses?
- Size of buyer pool
Simply put, the largest benefit of exporting to the U.S. market is simply the size of your potential audience. By expanding to a new market, you’ll be able to access millions of potential new buyers.
- Low regulatory barriers
While international shipments must pass through customs, the US has fewer restrictions on imports than many other countries.
- Low shipping costs
UK-to-US shipping routes are well established, and you’ll find many carriers with affordable shipping fees to help you manage international logistics.
- Similar culture
The country also has a similar enough culture that your localisation needs should be low, compared to many other countries where you might need native translators as well as cultural experts to help you navigate the intricacies of marketing and selling to a new audience.
For example, the UK-based apparel brand Fat Face has seen consistent growth since expanding into the U.S. market in 2015, and now has 28 stores in the U.S. In the last year alone, profits tripled, with a 20% increase in U.S.-based store sales paired with a 15% increase in U.K.-based store sales, and an 18% increase in total ecommerce sales. If you’re ready to see your brand’s profits grow, a U.S. expansion may be a great strategy.
Strategies for expanding into the American market
When considering expanding, you can focus solely on operating via ecommerce, or even consider opening retail stores on American soil. Here are some key tactics for planning your expansion.
- Conduct market research
Before marketing your products internationally, make sure you understand your American audience’s consumer preferences. What is the demand like for your product, how much are they willing to pay for it, and how does U.S. consumers’ usage differ from your U.K.-based audience? As you begin selling your products abroad, take note of your American customers’ feedback and support requests to better understand how to serve this market.
- Set up an international ecommerce shop
Rather than diving straight into retail, opening an ecommerce shop is an easy way to test the waters and make sure there’s demand for your product. And if you’re using an ecommerce platform like Shopify UK, it’s simple to set up your store for international sales: The platform provides a streamlined option to set up a series of regional storefronts, with customized currencies, pre-paid taxes, and customs pre-clearance. Pay attention to regional differences when updating your product pages and descriptions: when it comes to clothing sizes, for example, you’ll need to convert UK sizes to US for your American customers.
You can also list your products on pre-existing online marketplaces that cater to American customers, such as Amazon or Ebay. These platforms will guide you through what’s required on your end to set up a presence for U.S.-based customers.
- Research international couriers and shipping fees
Higher logistics costs are par for the course with international shipments, so it’s important to do your research and determine the most efficient couriers and routes for your needs to ensure you’re not overspending. If customers aren’t in a rush, you can trade cost savings for speed by prioritizing ocean freight when possible.
- Partner with an international 3PL
If you want your brand to be competitive on delivery time, it’s important to warehouse your products on U.S. soil so that they can be shipped to customers more quickly. Partnering with a 3PL that has U.S.-based warehouses is a great tactic for getting your products to American customers faster without the upfront cost of opening your own warehouse there.
- Consider a U.S.-based subsidiary
Once your brand has enough traction with American customers, it might be worth considering launching a U.S.-based subsidiary, so that you can limit your liability and gain more local government protection for your business. If your business operates retail stores, you might also consider opening U.S. retail locations under your subsidiary. Customers will be able to purchase your products domestically, saving them potential duty fees they might otherwise face.
- Streamline the returns process
Finally, don’t forget about the post-purchase journey: Product returns are a common occurrence, and it’s important to ensure that your customers have a streamlined process for sending back items that they don’t want to keep. By using a returns management software solution like Loop, you can set conditions for your returns to ensure efficiency, rather than burdening your business with high reverse logistics costs for products that you may not resell. For example, you may route many of your returns to a donation center or recycling plant, while only products with high resale value will make the journey back to your U.S.-based warehouse or 3PL for resale.
Building a business beyond borders
Whether America is your first or fiftieth international expansion, opening a U.S.-based sales channel is an ideal way to gain access to a huge new customer base — but it takes skill to differentiate from what’s already on the market to ensure high sales volume. Focus on optimizing your brand image and your operations, so that you can create a streamlined sales channel that brings in new U.S.-based customers to effortlessly scale your business.
Want to see how Loop can help you optimize international returns?
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