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~ Newegg WorldFirst ~

ers, retailers, and manufacturers are adopting a marketplace- are fully committed to the local market. Many marketplaces
centric strategy in order to reach consumers directly. It gives will only pay out to local accounts which can mean that
credence to marketplaces that offer the necessary scalable sellers are often forced to receive funds in their domestic
reach, flexibility, support, and opportunities sellers are look- currency, incurring higher costs. By having funds dispersed
ing for. The ecosystem simplifies the e-commerce business to local account sellers, it gives them the freedom to collect
model that has in the past been viewed as complex and, by and convert funds as they wish, at a significantly lower cost
some, risky. The marketplace approach is in stark contrast and with more options to manage the risk of operating in
to merchants going alone and building their own following, multiple currencies.
where acquisition costs can easily sky-rocket, and expansion
becomes a non-profitable endeavour. The model paves the way Dealing with local currencies
for merchants selling cross-border to stay in the black. With There are risks involved when dealing with local currencies.
marketplaces such as Newegg being connected to numerous Firstly, the cost of converting currencies can be very unclear,
global partners, their network allows partners like WorldFirst with many banks and payment providers doing everything
to build a user-friendly retail platform that connects with they can to conceal the margin that they charge businesses.
local consumers in different markets. This means sellers can Secondly, the costs hidden in such a currency conversion
enhance and build their credibility by associating themselves rate can be significant, ranging from 1% all the way up to
with a premium cross-border retail platform that is secure 4%+. Another risk lies in businesses that expose themselves
and easy to use. through inaction when their costs and prices are fixed. For
many sellers, a swing of 10% in the currency rate between
A seller going global on their own would need to consider purchasing goods from their international suppliers and
how to list products, localise the marketing and merchandis- realising the proceeds from marketplace sales can wipe out a
ing, fulfil the orders, handle taxes, offer customer service, sizable chunk of their profit margin. Sellers always need to
manage payments and much more. The complexity of such be aware that such changes can occur and keep the possible
demands could deter anyone. A marketplace helps cover- impacts on their cross-border business in mind. These fac-
ing these facets by serving as intermediary between seller tors all add up to unnecessary uncertainty for cross-border
and consumer, offering a range of value-added services to online sellers.
sellers, e.g. fulfilment support, local customer service, return
service, pay out service and more. Most of the operational Helping merchants with the payment challenge
and infrastructural considerations that traditionally have WorldFirst created the World Account platform. With it,
made cross-border selling a challenge for the average sellers online sellers and SMEs can instantly open currency ac-
are removed this way. counts based in ten countries, allowing them to receive local
payments from overseas marketplaces and customers seam-
Underestimating payments lessly. For example, cross-border sellers can link their US-
Cross-border payments really is something that is under- based USD account to Newegg’s marketplace and benefit
estimated by cross-border merchants. Out of the top 11 from fast, free transfers to the account and use WorldFirst’s
challenges in doing business, five are related to moving foreign exchange risk-management tools to protect margins.
money. The high cost, slow speed and lack of transparency At the same time, this is beneficial for a marketplace like
in cross-border payments adds another layer of risk for sell- Newegg. As stated, monetary transfer and exchange rates are
ers to realise their international ambitions. Even physical complex matters that directly impacts a business’s bottom
products can arrive halfway around the world before some line. Many of Newegg’s high-volume sellers focus on selling
types of payments are made. When paying suppliers in far- electronics, tech and other hardware products. Each fraction
flung countries, payments can often be delayed or held by of a percentage of margin they save from utilising a third
correspondent or recipient banks without warning, endan- party pay out provider like WorldFirst - providing competi-
gering those all-important buyer-supplier relationships. On tive rates starting as low as 0.15% and add-on payment
top of that, the cost of converting funds into or from foreign services - instead of wire transfer or other pay out methods
countries can be astronomical, especially if you are relying makes a huge difference for their business.
on the marketplace’s default cross-border payment methods
when repatriating those hard-earned proceeds back to home Tackling the cross-border payments challenge is a very im-
bank accounts. portant step to exile unnecessary costs when doing business
abroad. While marketplaces are an easy step when selling
Accepting and offering local payment methods cross-border, you might want to think about how the plat-
According to WorldFirst, it is important to service your cus- form you would like to sell through is dealing with payment
tomers a local experience in global e-commerce. If you are matters. It can save you time, money and a lot of stress when
a UK-seller, asking a US-customer to make a cross-border setting up your cross-border business. ••
payment can prove problematic. The customer experience
can be slow and expensive while it is important to show you

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