OK, Europe’s economy may not be in the healthiest of states right now. But make no mistake, the ‘Old Continent’ is still a hotbed of economic activity. Imports by EU member countries continue to rise in spite the recession, totalling over $2.2 trillion (€1.7 trillion) by recent calculations.
Powerhouses like Germany are leading the charge, while the UK has returned to growth, and Eastern Europe is buoyant. Even in the struggling Southern economies like Spain and Italy, consumer uptake of high-tech products and services is higher than in many other parts of the world.
And of course, Scandinavia’s prosperous economies show very little sign of flagging.
So for small businesses, large companies and retailers looking to get a piece of the Continental pie, here are 5 essential guidelines to follow…
1. Money Matters – Watch your currency processing
How many currencies are there in Europe? Not one, not two, but 12.
Wherever you sell in Europe, your customers will want to pay in local currency. Handling multiple currencies can be complicated, and potentially expensive.
How currency costs can drain your profits:
Upgrading your systems to handle multiple currencies.
Exchange rates moving against you between taking the order and making delivery.
Time spent by your staff processing currency transactions.
Tip: Exchange rates can move up to 10% in just a few days.
2. Successful selling demands mastering your market
There’s no substitute for thorough market research. Demographic, cultural and economic factors vary from region to region, so local knowledge is vital.
There are 733 million consumers in Europe.
You need to find out:
Who your products appeal to.
What marketing messages will reach them.
How you’ll handle customer service in a different culture.
Good news: there may also be grants and help available. For example, UK companies with under 250 employees could get help from the government’s Export Marketing Research Scheme. Companies coming from outside the EU may also be eligible for assistance or advice, so it’s worth contacting both EU and local government departments dealing with commerce.
3. Local buy-in means buying locally
To get customers on your side, you need to understand their culture.
Hiring locals, or even buying into local businesses, speeds up the transition from outsider to insider.
Prior to its German launch, UK-based global retailer Marks & Spencer hired 17 German managers. From them they learned that high quality customer service would offer M&S competitive advantage in a market where they were unknown.
Use local knowledge to avoid getting stung by too many local taxes. In Italy, the tax man could take as much as 68.6% of your profits.
Or you could use Amazon/eBay integration to get a foothold overseas without encountering problems in translation. Here’s a guide that tells you how to do that.
4. Tidy profits come through neat paperwork
Successful selling in Europe means getting all your documentation ducks in a row. Some countries, for example Italy and France, have notoriously bureaucratic or complex processes. Having someone local who understands the system (and knows one or two people!) may help to speed up the process sometimes.
Different local rules will apply to:
Tax (income, business, VAT)
Registering and running a business
Import and export
Hiring and firing of staff
Tip: Each European Union (EU) country has its own VAT (value-added tax) rate, and standard rates in the EU range between 15 and 25 percent.
5. Don’t get lost in translation
The quality of your communication can make or break your European ambitions. They don’t all speak English, and even if they do, research shows customers are far more willing to engage with messages in their own language.
Take care to communicate clearly and avoid translation gaffes like these by using a good translation firm and running the completed work past native speakers.
If someone complains about your advertising:
In the UK, you may get a warning from the ASA (Adverstising Standards Authority).
In Belgium, you may have to pay to publish a correction.
In Germany, you may be hit with a large fine.
Successfully translating your business is a challenge, but done right, it can deliver huge rewards.
Warning! Achtung! Attenzione!
Think about currency and exchange rates – don’t let currency costs drain your profits.
Master your market – what appeals at home might not have the same effect in a different culture
Get Local – no one knows the place better than the people who live there, so use them to your advantage.
Get your paperwork in order – make sure you’re aware of local tax rules
Communicate clearly – get the right message across in your advertising. And don’t just rely on Google Translate…
Extra tip: One way for non-European businesses to gain a foothold in the lucrative market is by integrating with already-established online buying platforms.
Here’s a How-To guide about how businesses can integrate with Ebay and Amazon for international sales.