This article was sponsored by World First.
Cross-border ecommerce is huge and it’s getting bigger. It is predicted to grow at an average annual rate of 25 percent, meaning that by 2020 it will have risen to $900 billion. That is twice the predicted average annual growth rate for domestic ecommerce.
There are several challenges which cross-border sellers have to manage. Translating listings and providing customer service in the local language are two of them, while working out the logistics of cross-border delivery can also prove difficult.
Receiving the proceeds from your cross-border sales may seem to be the easy part, as the marketplaces will do the conversion into your home currency for you. But, this ease-of-use can prove costly, as sellers don’t receive competitive exchange rates from the marketplaces.
World First receiving accounts are easy-to-use and provide sellers with a better exchange rate, so sellers can increase their profits from international sales by doing little more than opening an account.
How did World First get started?
World First opened its doors in 2004, with the aim of providing small businesses with foreign exchange services that the banks weren’t offering.
World First’s focus on ecommerce began 11 years ago when Amazon were launching in Germany. Amazon wanted their established North American sellers to be able to sell to the European market, but encountered a fundamental problem – there was no way for these sellers to get their funds back to the US.
So, World First started opening localized accounts for online merchants which allowed them to collect their funds in a “receiving account” and then send the money back home.
How do receiving accounts benefit sellers?
The primary benefit of using a World First receiving account is that it can add up to 2% onto your profit margin. This is due to the beneficial exchange rates that World First offer in comparison to Amazon, eBay and PayPal.
It also gives you full control, as you can choose exactly when to convert your sales proceeds back into your home currency.
One option is to automate withdrawals, so that funds are sent automatically into your home bank account. In the case of transfers from Amazon, this process will actually see funds arrive in your home account one day earlier than direct withdrawals.
There is also the option to keep the funds in the receiving account and wait for a more advantageous exchange rate.
Alternatively, sellers can use a “forward contract”, which allows them to fix an exchange rate for up to three years.
How do receiving accounts work?
The process is simple. World First provide receiving account details for each currency you need. You then enter the account details into the settings on the marketplaces you use. When the marketplace makes a payment (or you choose to withdraw) the funds are sent to your World First receiving account. The proceeds remain in the currency of sale, until you decide to transfer them into your home currency.
World First accounts are compatible with Amazon, eBay and many other marketplaces including Trade Me, Walmart, Amazon China and Amazon Japan.
Some international marketplaces require foreign sellers to have a local bank account, and World First receiving accounts also help sellers meet this requirement.
How can sellers get started with a receiving account?
It’s simple. You can register online or over the phone and just need to provide a few details such as your name, date of birth and the country your company is registered in.
The information is then checked and, when the process is complete, you receive an introductory call from your dedicated relationship manager. They will talk you through the process of putting your World First account details into the marketplaces and then you’re good to go.
What does it cost?
Registering for a receiving account is free and there is no obligation to use it. You can sign up with World First with no more than a few minutes of your time, and decide later whether to make use of it.
A common misconception with World First is that they charge withdrawal fees, but this is no longer the case. There is now no set minimum amount you have to withdraw to avoid a fee; you could transfer $5 or $5,000 – it’s up to you.
So how do World First make a profit? Well, they have their own margin on the exchange rate they offer to sellers. This figure can vary depending on factors such as the volume of money going through the account, the marketplaces a seller uses, and the countries that they sell in. The World First rate is tailored to always be competitive for the seller.
Is my money safe?
When a seller opens a receiving account with World First, that account is unique to them. This gives customers peace of mind, and also complies with marketplace regulations that require each merchant to use an account in their own name.
The receiving account is segregated from World First themselves, so they can’t access funds in your account, unless instructed to do so by you.
What is unique about World First?
World First tailor their customer service to meet different customer needs.
For sellers that just want to go online, make a withdrawal and then log off, World First aims to make the process seamless. That means ensuring the money travels quickly, eliminating intermediary charges where possible, and ultimately by offering good rates.
For customers who want to speak about their transactions, World First ensures that there is a team on hand, 24 hours a day. There are no automated voicemail systems, so customers can speak to a personal account manager whenever they need.
Cross-border ecommerce can be incredibly complex. World First’s service keeps things simple, while offering a significant saving on each and every international sale.
This post was sponsored by World First.