Here’s a question: What percentage of America’s 30 million companies export?
- 25 percent
- 10 percent
- 1 percent
With global ecommerce topping $1.3 trillion last year, we would understand if you picked the top choice. The answer, however, is 1 percent – considerably lower than all other developed countries – according to the Department of Commerce. And of U.S. companies that do export, 58 percent export to only one country, usually Canada or Mexico.
Global ecommerce has exploded recently, jumping 24 percent last year and expected to leap another 20 percent this year. So why do so few U.S. companies take the plunge?
Experts say many companies have tended to think the U.S. domestic market is both large and diverse enough to accommodate steady growth. But with 70 percent of world’s buying power located outside the United States and with emerging middle classes in highly populated countries like China and Brazil, such a parochial view leads to a flawed strategy.
Of course, challenges abound for companies attempting to expand globally. This is especially true for small and medium-sized businesses (SMEs), which often don’t have the time or money to figure out how to export. Among the pain points for SMEs:
- customs forms and procedures are confusing, as is knowing import/export restrictions and the harmonized tariff code;
- payment and currency in other countries;
- lack of technological capabilities;
- logistics challenges; and
- how to best market in other countries.
The market is responding with solutions, including marketplace platforms like Amazon, eBay, and Alibaba, as well as providers, such as Borderfree, which takes an online retailer’s website and makes it international by localizing content and accepting international payments while displaying total costs and shipping information. Still, more options would be helpful, especially for SMEs that need simple, one-stop solutions.
Enter the U.S. Postal Service. Some observers see a big opportunity for the Postal Service, especially if it could offer services – either on its own or with a partner – that remove major hurdles like customs clearance, fully landed costs and address verification.
What services would you like to see the Postal Service offer in global ecommerce? How best might the Postal Service partner with existing providers to give SMEs a complete service offering?