International Expansion · International Law

How do I support international sales in my global buy/sell marketplace? like Etsy or Poshmark

Lisa Falcone Rock Star Marketer available for company poised for growth

Last updated on February 26th, 2019

I'm researching an opportunity to build a global niche marketplace (think of Etsy or Poshmark, as an example.)


I'm coming across a few key logistical challenges in areas where I am not experienced:


-What are the rules and regulations around having marketplace vendors sell and ship their items internationally?

-How do currency conversions work? Are there recommended payment processing tools that support international transactions? (site will be based in Wordpress)


My target market is based all around the world (with a large majority in the U.S.,Canada, Europe and China) so it's important that the site supports transactions globally.


Thanks in advance for your guidance!


Lisa





Paul Garcia marketing exec & business coach

March 4th, 2019

I support @Shams highlights of regulatory compliance requirements for various business regions like the EU. Currency conversion is a convenience and really has very little to do with your ability to accept payments, unless you need to offer payment in local currency instead of a standard currency. Most payment processors are perfectly capable of accepting either, but your fees will vary widely based on risk and actual transaction history once you're started.


If you're planning to be as big as Etsy or Poshmark, then Wordpress is a bad start. It's poorly designed for high-volume. You should consider Wordpress as a design tool, not as an e-commerce platform. And while it does have sturdy plug-ins for transacting (like the mentioned WooCommerce), it has clear weaknesses when you get into high site usage. That may not be an initial concern, but if you do succeed, you will end up completely scrapping your original system in favor of something else. Both Etsy and Poshmark are built on entirely customized technology, not packaged e-commerce.


As far as international shipping, the most problematic thing is collecting the tax or duties due at Customs. Each country has different regulations on how certain items are taxed for commercial shipments. You can't skirt them by declaring shipments from your store as gifts. And there are many fulfillment centers that will not deal with international shipments because they don't have agreements with the Customs office in whatever country. Even friendly Canada has issues.


Your commerce function will need to collect additional duties on top of shipping based on the value and type of goods you are shipping unless you are building those costs into the price of items sold. Calculating duties is often too complex for most out-of-the-box solutions unless your inventory is limited and standard and you can use a flat fee. And it's a royal pain for you to manually process international shipments as each will need export documentation. Being a commercial international shipper will draw the eye of the tax man, so your documentation must be in pristine order.


If you're allowing others to post in your marketplace, you have additional risks of chargebacks for misrepresented products (with your payment processor), redistribution of funds across international borders (paying your merchant members), and other legal risks for which you will need to consult an attorney.


Good luck.

Shams LARBI Manager

February 26th, 2019

Hi Lisa,

As you'll be using Wordpress, I guess you're also going to use woocommerce plugin. One of the sub-plugins that you might use is the Multi-currency Converter (https://woocommerce.com/products/multi-currency/) which allows currency switching "on-the-fly" without the need to update the currency rates manually.

Regarding reguations, I know that your ecommerce website should be GDPR compliant (https://en.wikipedia.org/wiki/General_Data_Protection_Regulation) if you are targetting the European union's countries. Also your payment and shipment gateways should be PCI compliant (https://www.alliedwallet.com/pci-compliance/).

I hope that helps. If you need anyfurther technical advices please let me know.