Tips Before Selling Abroad

Happy Wednesday!

Expanding your e-commerce business to new countries can be both: super exciting and also a bit daunting.

The beauty of selling in multiple countries is that some countries will have a $9 CPA and 5.29 ROAS.

While others may have a $37 CPA and 1.32 ROAS.

This week I want to discuss things you must consider before expanding to new countries and why having a clear game plan is key.

What you will learn today:

• Understand the logistics that affect your profitability per country

• Decide whether to create new creatives for each market or use existing ones

• Why understanding cultural differences is key for your creative strategy

• How to find new potential customers in new markets

• Learn the pros and cons of having one ad account with separate campaigns versus separate ad sets within one campaign

• Understand the right time to consider expanding abroad

And much more…

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We want to show you our creative process and why our clients love it.

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“Do I Need To Expand Abroad?”

Think hard about whether your business is ready to expand.

If you're in the USA and not even doing $50K a month, you probably don’t need to expand to another country.

If you can’t get past $4,000 a day in revenue and feel stuck, you might need to focus on scaling in your base country first.

Unless you’re starting in a very small market with only a few million people. Then you can consider expanding earlier.

Go hard on creative diversification and breaking past your barriers.

Consider expanding abroad once you’ve met your goals in your current country, not because you’re desperate.

If you’re profitable and capped out in one country, then it’s time to give it a go!

Determine Your Profitability Per Country

Ask yourself:

• Where is your business based?

• Where are your shipments coming from?

• What are the tax rates for each country?

• What are CPMs for my industry in the country I want to expand to?

• Will you need employees in the country you want to expand to?

• What is the cost of labor (employees) and average salaries?

• Are people’s habits different in the country where you want to expand to from your main market? Will people buy your product?

For example, if your business is based in the US, your break-even point might be a 1.5 ROAS.

But if you decide to expand to Australia, you might need a 2.5 ROAS to break even because of higher shipping costs and taxes.

Shipping Rates

Shipping internationally, especially if you offer free shipping, can get expensive. It’s important to look at your shipping costs from a logistical standpoint.

We recommend you test a market by shipping from your current warehouse and when you’re able to acquire customers at a reasonable cost and become soon profitable in the new market, you could expand further by finding a 3PL partner in the country.

Taxes

Taxes are different in each country and can impact your bottom line.

For example, many brands don’t realize that their ROAS can vary depending on a country’s VAT.

In Germany, 2 ROAS means more profit with its 19% VAT, while the same ROAS yields less profit in Hungary where VAT is at 27%.

That's why it’s crucial to conduct thorough research on the tax rates of each country before entering a new market. For context, here’s a map of VAT rates per country in Europe: 👇🏻

Understanding your shipping costs and taxes will help you make better decisions about where to expand by analyzing your profits.

Build Your Creative Strategy

When it comes to your creative strategy, you need to decide if you’ll make new creatives for each market or use the ones you already have. This might change depending on the country.

Evaluate Cultural Differences

For example, if you’re in the US and testing in Canada, you might start with your current creatives because the audiences are fairly similar.

But a creative that works in the US might not work as well in Europe.

Different cultures, values, and styles mean you need to tailor your approach to the local audience.

If you want to test your successful US creatives in other countries, don’t expect the same results.

Different cultures and backgrounds mean that what works in one place might not work in another. You might need new creatives that focus on local customers.

Test Lookalike Audiences

Something worth testing when entering new markets is finding lookalike audiences.

These are new people likely to be interested in your business because they share similar characteristics with your existing customers.

However, keep in mind that with the constant changes at Meta, results may vary per brand.

Branching Out Creatives

Do you want to test a new market for the lowest cost and effort? Start with your English website and winning ads.

Once the new market shows potential, you can invest more money and energy into localizing your website and ads to further improve your ad performance.

I believe the best path for most brands is:

1. Start with your English website and ads

2. Localize your website and ads with AI voiceover

3. Hire local creators to film content and compare the ad performance with the AI voiceovers

4. Scale what performs best for you

How to Set Up Your Ad Account

Setting up your ad account depends on your situation.

Here’s a simple approach:

If you’re targeting both the US and Canada, you can have one ad account with two separate campaigns for each country. That’s the easiest way to manage it.

Or, you can have one campaign with separate ad sets for each country, each with its own ads. However, this can mix results at the campaign level, making it harder to analyze performance.

Typically, sales from Canada won’t always be the same as sales from the US. If you started in Canada, your Canadian sales are probably stronger than your US sales.

The CPA, ROAS, and even CPMs might be different. Combining them into one campaign can skew your data, so you need to check each ad set's performance.

It’s better to have a new campaign for a specific market, demographic or product.

This lets you compare the data equally at the campaign, ad set, and ad levels. Meta’s algorithm can then better understand who to target without skewing the data.

Get Our Free Guide: Build A Solid Creative Strategy For Your Brand

We've put together this training to teach you how to create a high-performing creative strategy for your brand.

This is the same process we use to build creative strategies for hundreds of brands, which has resulted in top-performing UGC ads for our clients across various industries.

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1. If you’re looking for a creative partner who will handle your entire creative production, deliver winning ads every month, and help you scale, apply to work with us here. We have worked with brands like HexClad, BestSelf, Product Hunt, Morning Brew, and others.

2. Want us to train your internal team and implement all of our creative production systems and strategies in your business? Apply here and we will help you build an in-house team that can create hundreds of winning ads every month.

3. If you’re looking to take your ad performance to the next level and have a consistent stream of winning creative, but don’t want to hire anyone, we have created a program that teaches you our entire creative production process and everything we have learned over 3 years of creating tens of thousands of ads.