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Expanding eCommerce business into the U.S market: What to consider

Now, when it comes to whether the USA is a profitable place to expand your eCommerce business, retailers in the country would answer with a resounding “yes”. In fact, 77% of US eCommerce retailers predicted significant growth in 2022. when asked in a survey.

With the increase in not only app-based and social commerce sales, businesses believe that there is much room to thrive and revolutionise the eCommerce and retail space in the US. The US market reached $357 billion in 2022, accounting for 34.6 percent of all online sales.

When hearing this, it’s no wonder eCommerce leaders around the world and particularly in the UK are considering expanding their business to “the land of opportunity”; but in order for the expansion to be successful, there are necessary steps to take and things to consider.

Which structure is best? Foreign or US Entity?

Perhaps one of if not the most important first steps to take when completing the expansion is whether you want to expand using a U.S or foreign entity. Forming a U.S entity could be a suitable option if you want to sell across multiple marketplaces. Whereas some businesses may expand using a foreign entity if they wish to keep their costs down.

There are both advantages and disadvantages to using both options such as tax differences and returns. If expanding with a U.S entity, there are benefits such as it makes it easier to sell business assets and you can protect your foreign accounts and income stream. If operating as a foreign seller, beware that any liability from your U.S. business will impact all your business revenue that is operating out of one entity.

Which State is Best?

Once you have identified how to run your eCommerce business in the United States, to secure the best business, you now have to identify which state is the best or most effective to operate in. This can be tricky as all states have advantages and disadvantages.

According to research, Utah is one of the best states to launch any business in. The state is favourable to businesses in terms of taxes, with a relatively low corporate tax rate.

Washington and Florida also rank highly. However, Wyoming and Delaware have advantages in privacy and low filings fees; but they must be in perspective to your overall business.

Before making any investments, it is recommended you get a thorough understanding of the U.S legal system to avoid any penalties or lawsuits.

Which services will help you expand into the United States?

Whether you decide to expand using U.S. or foreign entity, there are services (connected to a U.S. or foreign entity) which you will need to sell across multiple marketplaces. These services include:

· Obtaining an EIN

· U.S. Virtual Address Service

· U.S. Taxes

· Tax Support to File the Appropriate Federal and State Returns

Once your legal requirements have been sorted and your business is up and running, there are some other measures you can look into to ensure your eCommerce business performs well. Understanding your market and what is required to provide support to your consumers will see your business perform well in the long run.

Collaborate With Local Influencers

Influencer presence on social media has been and will continue to be a key factor in customer buying decisions. 60% of UK millennial consumers have bought something recommended by an influencer they follow. Currently, 38% of brands allocate 10%–20% of their marketing budgets to influencers. Influencers who are well-known to your target market in the US could help a great deal in bringing attention to your business.

Offer Quick And Reliable Customer Support (Chatbot investment?)

One of the major hurdles that eCommerce businesses and businesses, in general, find when they expand from the UK is working around the time difference, and offering around-the-clock support if working from another country. With the increase in AI automation, chatbots have become a popular way of interacting with customers, providing solutions to queries in the process. This also becomes useful when providing support 24/7, even if human contact is not available.

Efficient Shipping Options

An efficient shipping policy is an essential component of a successful eCommerce business; especially when expanding your business internationally. One of the things that tend to put off customers is high shipping charges; and in order to work around that, is to understand the shipping process and choose your shipping partners carefully.

Optimise for mobile

The number of customers using their mobiles for shopping activity is increasing. 60.1% of consumers use their smartphones for online shopping. The mobile payment market is projected to surpass $4.57 billion by 2023.

With the rise of mobile use, retailers must ensure they adopt a mobile-first approach for their eCommerce websites to make sure they’re providing a great mobile experience for users. Along with usability, investing in mobile wallets and payment methods as well as SMS Marketing and Push Notifications will be a great way to reach and retain customers.

Time to launch!

Whilst the idea of expanding your eCommerce business to the US will give you global recognition and more sales, in order for it to be a long-term success, there are many things to consider, as we have highlighted. The first step of getting yourself set up is the most difficult, but with the growth of eCommerce across the globe, thanks to many shopping options, there’s a great chance you’ll succeed.


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