Part 5 - E-Commerce In Latin America: How To Make Sales

 

Hello again!

Welcome to Part 5 of my e-commerce in Latin America series. Parts 1-4 covered how to get your store up and running, how to market your store and whether you should use dropshipping or private label goods.

But none of that means shit unless people are buying your stuff.

The good news is that, if you've followed parts 1-4 of the series, you should know whether you have a viable product for your market.

The bad news is that, when it comes to online shopping, it's much more difficult to bridge the gap between interest and the sale in this part of the world.

Allow me to explain.

 

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The Challenge of Selling Online In latin America

People don't use goddamn credit cards.

That's pretty much the number 1 challenge.

Many people don't even have credit cards. Shit, many people don't even have bank accounts!

Fortunately, this isn't as big a deal as it sounds. If you've applied the information in my previous posts, your product will be aimed toward the upper/middle class anyway. Therefore, one way or another, your customer base will likely have access to a credit card (theirs or their parents').

Your biggest problem will be getting these people to whip out those cards and make a purchase on your website. Latin American countries have notoriously low-trust societies, and credit card fraud is a growing problem, particularly in Mexico and Brazil. This means that, even if someone wants what you're selling, they are much less likely to pull the trigger than a customer in the United States, Canada, Europe or Australia, where online shopping has become the norm.

How can you overcome this barrier?

Well, in short, it comes down to just one thing: you must be able to gain your customer's trust.

 

 

7 Simple ways To Build Customer Trust...Latin American Style

After starting an e-commerce store down here I was giddy with excitement. I gained 4000 Facebook followers in about two weeks, interest and engagement were extremely high for my brand and, according to Shopify, my store was in the top 5% of traffic out of all stores that started at the same time as me.

I've stumbled onto a goldmine, I thought.

I sat back and waited for the sales to roll in.

Problem is, they never did.

Two months in, my conversion rate (percentage of users who visited my page and bought something) was something like 0.4%. If you're not familiar with conversion rates, that's really fucking bad. Seriously. A pigeon could peck a better conversion rate than that.

Even worse, I was spending an incredible amount of time responding to idiotic Facebook inquiries regarding information about prices, shipping, colors etc (idiotic because all of this information was listed clearly on my website), mistakingly thinking that it would result in sales.

In other words, not only was I not making any money, I was also losing about 4 hours a day of my time between answering email responses and trying to tweak the website to figure out where I was going wrong.

It took awhile, but I eventually determined that there were two main reasons that people weren't buying anything:

1. They didn't know how to buy something on the Internet.

2. They were too scared to buy something on the Internet...or at least from a site like mine.

Because I'm from Canada, where everyone and their mother shops online regularly, I didn't account for these factors. But I soon found out it's something you have to take seriously.

After making some adjustments, I was able to increase my conversion rate from 0.4% to 1% in a couple weeks.

Here's how I did it.

 

Step 1: Create A Guide For How To Buy Online

If you're from a developed country, where buying online seems intuitive at this point, this will appear ridiculous. But if you're selling online in Latin America, it's important to teach people how to do this (by far, the most frequent question I get through email and my Facebook page is "how do I buy something?"). On your site, you're going to want to create a guide, in Spanish, for people who don't know how to buy online. Whenever you get this question (you will get this question), simply redirect them to a page you've created outlining the process.

The Chinese clothing company ROMWE has a good template for this. Check out their guide here.

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Basically, translate ROMWE's guide into Spanish. Add some things if you need to, just to be as thorough as possible. Pretend you're trying to explain the process to your grandmother. Making a guide like this saved me a ton of time responding to messages and clarified the process to people who have never made an online purchase.

 

 

2. Prove Your Website Is Secure

People in the west generally know that it is safe to make a purchase if they see this before the url of a website:

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In Latin America, it's not as straightforward; you'll need to do more to show people your site is secure. This is partially due to, as I mentioned before, low trust societies, but it's also because it's much harder to dispute a credit card charge in these countries.

In Canada, for instance, if your credit card information gets lifted, your CC company will call you immediately to inquire about some uncharacteristic purchases. If you confirm that you didn't make these purchases, the company will cancel your card and refund your money. Simple as that.

With banks south of the border, you'll have to do a huge song and dance to dispute a charge, which will likely require multiple phone calls and bank visits. It's a much bigger pain in the ass.

This means that many people would rather not take the risk buying from a website unless they are absolutely sure their information is going to be safe.

Fortunately, there are a couple things that you can add to your online store to give people peace of mind.

First, you should add some trust seals:

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If people see this when they go to order a product, they will have a bit more faith.

In your "How to order" page, you can add a section about security entitled "Your information is safe with us" or something in that vein. In it, you'll want to describe what the "Secure" SSL certificate in your URL means (complete with a screenshot), along with what your trust seals denote.

Also, you should make your return and refund policy clear to your customers. Let them know that you offer refunds and/or exchanges if they are not satisfied with their purchase. This will reduce the perceived risk of purchasing from your store.

I suggest putting all of this information under the "How To Order" section (you can have a separate page for "Shipping and Returns" if you like, but repeat the information again in the "How To Order" section). This is because "How do I order" will be the most frequent question you receive, so if you simply send them a link to this page they'll learn how to order, and also read about how safe your website is to order from, thereby alleviating what will likely be the two biggest impediments to buying your stuff.

Chances are only one in every ten people will read it, but it's better than nothing!

 

 

3. Have Your Prices In The Local Currency

As I've mentioned throughout this series, I suggest that you focus on one country when starting your online store. You should be present in that country, and have a bank account in that country in order to be able to receive payments in the local currency. But, if you're hellbent on selling into other countries in Latin America, or if you're testing different markets to determine the best country to set up shop, you'll need to make sure that the prices on your website appear to your customers in their local currency.

I learned this the hard way when I was testing a dropshipping store. I figured that if I just had my prices in USD, everyone would more or less know what that meant in regards to how much things would cost in their local currency.

I was wrong.

Instead I was met with an onslaught of comments asking me how much my products cost in Peruvian Soles, Chilean Pesos, Colombian Pesos, Nicaraguan Cordobas etc., etc., if I accepted _____ currency, how to change the currency on the website...

People get uncomfortable with making a purchase if the product they want is not listed in their local currency.

You're definitely going to want to invest in a currency converter for your site. This one from Shopify goes for $10/month and will automatically switch the currency of your site based on your customer's location. It is well worth the money.

 

 

4. Make It Personal

Another good idea is to add a nice, sexy "About Us" section to your website. Talk about your journey/passion for your product.

Whatever, really. Just make it engaging.

Personal photos of attractive people doing interesting things will work well here. You don't necessarily have to include photos of yourself (could put you at risk in some countries), but if you know some good looking people, take some high quality photos of them using your product or in your studio/workshop if you have one, etc.

The bar is pretty low for "About Us" pages in Latin America, so just do something mildly cool and you'll be ahead of the pack.

Here are some random examples.

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5. Have A Physical Presence

One of the best ways to establish trust among consumers is by having a physical location where they can come see your products. Earlier in this series, I discussed the option of turning your apartment into a "showroom" of sorts, from which you can sell your goods. Or, alternatively, renting office space and doing the occasional sale out of there. Customers will feel more comfortable and see you as more legitimate if there is somewhere they can go in person to see your goods and do an exchange in person.

The obvious problem with this is that it is sketchy as fuck. By having a physical presence you open yourself up to theft and/or trouble with the local authorities. Unless you're legally allowed to open a business in the country you're residing in or you're located in a remarkably safe city, I wouldn't recommend doing this - it is not for the faint hearted. 

Besides, the whole point of running an online store in Latin America is to avoid the many risks and costs associated with having a brick and mortar in one of the most dangerous regions of the world.

Luckily, there's an alternative.

Another way to establish a physical presence would be to have your product available in stores around the city. Reach out to local independent shops and see if they would be interested in having your product in their store. Once you get a few places to sign on, let your customers know where they can go to check out your products, i.e "Our products are also available to view and purchase in the following retail locations"  ____ ____ ____.

This will give you a benefits of a 'physical presence', while sheltering you from the risks of having your own shop.

 

 

6. Create A Sense Of Urgency

OK, so this won't exactly build trust, but it will help you make sales, so I've thrown it on the list.

This is a tried and true marketing tactic. Although it's definitely overused and undeniably obnoxious, there's no doubt it works.

And I'd venture to say it works even better in LATAM than in more developed consumer markets, where it's been done to death.

Having a 20% off sale with an end date will work well to motivate people to make a purchase from your site soon rather than later. You don't have to be overly pushy, but things like this will drive your conversion rate up.

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7. Project success (even if you're not successful yet)

Otherwise known as "Fake it 'till you make it."

Say you're hungry and walking the streets of a new city. You see two restaurants. One has a good number of people in it, and the other is entirely empty.

Which one are you more likely to eat at?

Online shopping works the same way. People won't buy from a store that no one else shops at.  They're less likely to trust it. They'll feel like they're making the wrong decision.

On the contrary, they will buy from a store if they see that it is doing business. Basically, they just don't want to be the first to test out your products - they'd rather someone else take that risk.

The obvious problem is, if no one will buy your product until other people have bought your products, how will you ever start doing business?

Here's a little trick I used to help people gain confidence in my store.

First, I had a stamp made and stamped 50 boxes with my logo. Think something like this (mine looked much less professional...but you get the idea).

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Then, I got 50 business cards made with the brand's logo. Think something like this:

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Then, I took a bunch of cool pictures with various products in the boxes w/ the business card in different locations. Mostly different rooms in my apartment and different rooms in my friends' apartments to give the appearance of different places. Over the next couple weeks, every few days I had a different friend post a picture of the box on their Instagram saying something generic like "Thanks (brand name) I love your (product name). Then I'd repost that shit on Facebook and Instagram saying "Send in a picture of your package when it arrives and we'll DM you a code for 25% off your next purchase!"

Once I ran out of people to do that for me on Instagram, I'd simply post the different pictures I'd taken on the brand's Facebook page, saying the same thing. I'd promote these posts with a few bucks so they'd reach more people.

The business cards and stamped boxes in the pictures lent a professional and "cool" factor to the brand (somewhat of a novelty in this part of the world), and also let people know that people were buying things and that they were arriving safely.

Of course, I'd faked it all, but you gotta start somewhere. As far as the customers knew, it was legit.

This got the ball rolling and undoubtedly helped people feel more secure in buying from the site.

Interestingly, although sales went up, only one person participated in sending in their photo to receive 25% off. But that's OK, that wasn't the point of campaign.

***I suggest you spend the cash for a stamp and business cards for your brand, or similar branding material. This stuff is cheap to get made (especially in Latin America), and will really help set you apart from your competition down here.

 

 

Conclusion

And there you have it!

If you find yourself struggling to make sales on your online store in Latin America, try out these steps and see if they help you.

The cool thing about doing e-commerce in LATAM is that the challenges you'll face will be quite distinct from what you'll face in e-commerce in the United States, challenges that your skillset might be more suited to.

For instance, I'm not great with aesthetics. I'm average at best at making things look nice. Same goes for marketing. In the United States, the bar for design and marketing is high. If I were to start a store in the US, I'd be crushed by the competition due to these things. This would probably prevent me from ever being noticed. I wouldn't even get past the gate.

I'm not great at innovation, either. It's a pretty safe bet that I'll never create a revolutionary new product. For innovative motherfuckers, the US is the best place to be.

Instead, my talents lie more in perception. For instance, after a short time in a new city, after observing things and talking to people, I can usually draw pretty accurate inferences. I can get a good idea about popular fashion trends, openness of the locals, safety etc, and I can synthesize this information to others efficiently (I like to think my city guides are an example of this).

In terms of an online store, this means I can identify products that are in demand and are difficult or expensive to buy. In other words, I'm no good at predicting trends (skills that would be handy for the US) but I am good at identifying them once they've hit (skills that are good for copycat markets like in Latin America).

It also helps that most businesses have shitty marketing and are outrageously unorganized down here, so simply being raised in a first world country will give you an automatic leg up in those arenas. 

And, as for all the nonsense you have to go through with an online biz down here, like explaining to people how to buy online, how to set up a bank account and finding the best way to process payments, I'm a patient person and I enjoy searching for alternative solutions to problems, so I don't have a issue with that.

 

And that's about it!

I'll probably do one or two posts more about this topic and then call it quits, get back to writing about the old stuff.

In the meantime, check out the other 4 parts of the series:

 

Part 1 - How To Start An E-Commerce Business In Latin America

Part 2 - How To Market Your E-Commerce Business In Latin America

Part 3 - E-Commerce In Latin America: How To Test Market Demand

Part 4 - Dropshipping or Private Label? Which E-Commerce Strategy Is Best For Latin America?

 

Until next time, 

Vance

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