The world’s largest economy with the third largest population, it’s clear that the US is a market to be considered. Leading the global shift towards digital shopping, with ecommerce growing across all sectors, there’s great potential for businesses looking for opportunities. Even if the US is not a direct part of your growth strategy, it has significant influence over global trade affairs and should be understood as part of the wider economic picture.
After reading this guide you will understand the opportunities presented by the US and how to take make the most of them, as well as have a general understanding of the US’ place in the global balance of powers and why this affects businesses.
2 Expanding business to the US.
After reigning the ecommerce world for more than a decade, the U.S. is currently home to the second largest ecommerce market in the world. Ecommerce sales in the U.S. are projected to reach $461 billion by 2018, accounting for approximately 9% of retail sales within the country. Over 190 million American consumers are expected to shop online and 79.6% of the population are expected to be digital buyers in 2018. Led by ecommerce giants, Amazon and eBay, ecommerce is growing in all sectors. American consumers typically shop overseas for products in the apparel and accessories and health and beauty categories.
The U.S. has the world’s largest, most efficient, world-class logistics infrastructure in place, and it is currently undergoing upgrades to handle ecommerce capacity in the future. From the west coast seaports of Long Beach, to the inland transport hubs of Omaha and Memphis, to the border crossing at Laredo, to Chicago’s O’Hare airport, the U.S. is truly a mega hub to the Americas and beyond.
In addition to its infrastructure, the U.S has the advantage of having a technology-driven logistics landscape. Logistics service providers are becoming more integrated and moving towards automation, offering new technology like warehouse robotics to improve the service.
3 Quick facts and advantages of doing business in the US.
Over 40% of major retailers in the U.S. offer some form of in-store pickup for ecommerce orders, and over 45% of consumers are likely to use an in-store pickup option. Ecommerce multichannels and infrastructures are rapidly developing and improving as more customers are using them
Cyber Monday is the biggest online shopping day of the year and double-digit sales growth on this occasion is projected for the next five years
The highest valued imported products in the U.S. include agricultural products (4.9%), industrial supplies (32.9%, of which crude oil accounts for 8.2%), capital goods including computers, telecommunications equipment, motor vehicle parts, office machines and electric power machinery (30.4% ) and consumer goods including automobiles, clothing, medicines, furniture and toys (31.8%)
There are 149 ports located in the U.S. The ports of South Louisiana, Houston, New York, New Jersey and Long Beach often make the top of the list when ranked by tonnage or twenty foot equivalent units
4 Customer trends
It’s crucial to think about customer behavior when expanding in new markets. How does your target customer usually buy products? What’s their preferred method of delivery? The following factors will help you consider how customer trends will affect the way you go about doing business in the U.S.
Over 80% of Americans make purchases online and over 51% of consumers report making a purchase through a mobile device
Over 30% of Americans make online purchases on a weekly basis and 80% purchase something online at least a few times a month
23% of shoppers are influenced by social media recommendations and reviews
23% of Americans are willing to pay extra for same-day delivery. Offering a variety of delivery options is preferable, as 40% of Americans report canceling a purchase due to limited delivery options
Americans value transparency in the delivery process and typically check an item’s order status at least once a day
Online shoppers expect up-to-date delivery information, including email tracking numbers and text alerts
The average online order amount is in the $80.00 range
Same-day, next-day and fast-track shipping options are critical, and most American customers prefer free shipping. 54% of Americans report abandoning shopping carts due to high shipping costs. This is down 10% from the previous year, demonstrating how ecommerce sites have responded and understand the importance of competitive shipping prices
5 How to start doing business in the US.
When weighing up your move into the American market, think about the pros and cons of incorporating a company and the type of company structure that might suit you. Apply for an U.S. EIN (Employer Identification Number) and determine whether your product will need an import declaration. Finally, find a fulfillment center and carriers that provide coverage in the regions you’re targeting in the U.S.
Market Finder contains a breakdown of the World Bank’s Doing Business Index, where you can get a heads-up about the ease of doing business in U.S. It ranks on a scale of 1 - 190 how easy it is for a business to set up and run a local firm in each of the world economies. 10 topics are assessed to gain the score. These include the ease of getting electricity, the ease of getting credit, and the potential for cross-border trade.
When trading in a new market, it’s good to know the administrative, regulatory, and logistical challenges that may lie ahead. Navigating legal requirements and working out logistics is made a lot easier with Market Finder - find further support and tools including in-depth guides and insights.
Ingram Micro Commerce & Lifecycle Services provides logistics solutions to help businesses connect supply and demand.
The materials provided on the site are for informational purposes only. For financial, tax, or legal advice, consult a specialist.