Markets Vs Expansion
We have helped many companies through their international expansion plans with Shopify. However, with the advent of Shopify Markets, now, for each one, this process will involve making a choice. Do you expand your business with the multi-region functionality offered by Shopify Markets? Or create expansion stores to cater to each country you want to sell in?
There are pros and cons to each of these models, planning is paramount, so it’s not a choice to be rushed. So in this article, we want to explore what each model looks like, and share some of the thoughts that we usually discuss with clients who are facing this decision.
If you’re trying to decide what the optimal international expansion looks like for your Shopify business, why not talk it through with us? Every brand’s story is different, and we would be glad to hear about yours and help to advise. Otherwise, read on – to find out what we think are the biggest advantages and disadvantages, to either expanding through Shopify Markets, or else opening a whole new Shopify expansion store.
The Options: Shopify Markets and Expansion Stores
First of all, let’s just define exactly what these two options entail.
A Shopify expansion store is essentially a completely new Shopify store for your brand, which can operate autonomously in a different region. It will have its own default currency, and it might even be run by different staff – and connect to a whole different supply chain network. Our client Gym+Coffee's award winning site is set up behind the scenes in this way. Featuring entirely separate stores, enabling them to manage their business in the UK, Europe and the US, respectively.
Shopify Markets, on the other hand, is a feature offered by Shopify which allows brands to target different countries and markets from within the same Shopify store. You can customise your chosen markets with their own languages, currencies, domains and even specific price lists. For Cheerful Buddha, a client that's a little earlier in their growth journey this was the perfect solution. Expanding internationally, using the powerful tools included in Shopify Markets, makes more sense – rather than spinning up entire new stores for each different region.
So which one of these options will be best for your business? Read on, as we explore the relative pros and cons of both Shopify Markets, and operating a Shopify expansion store.
Selling Worldwide with Shopify
Let’s consider some of the key features that a retailer might need from their international stores – and for each one we’ll compare the provisions of Shopify Markets, against the option of opening new expansion stores.
Currencies
Perhaps the first question to ask will relate to the ease of selling in different local currencies. The answer is, there are solutions for this both ways.
- If you establish expansion stores in different national markets, then naturally, those stores will be able to operate in the local currency.
- Alternatively, if you’re using Shopify Markets, it is also possible to set up different local currencies for transactions using Shopify Payments.
However, there is an important caveat to note with the latter: Shopify Payments is not available in all locations and currencies. The list of countries where the service is available is often updated, so for the latest information it’s best to check with official sources. But at present, you will only be able to operate Shopify Payments in the local currency for regions including the UK, EU, Canada, US, Australia and New Zealand, Hong Kong, Singapore and Japan. For anywhere outside of this list, you may find it’s better to simply open a localised expansion store.
Discounting & Promotions
There isn’t native support for assigning a discount code to a specific market - although there are workarounds which can sometimes be applied depending on exactly what you're trying to achieve - but they aren't always bullet proof. This means discounts setup in one market can sometimes unintentionally bleed into another market.
In addition to this there are still limiations around setting up discount codes when targeting multiple markets. Monetary discounts can only be set in the store's base currency. If your base currency currency is in GBP you can create a £10.00 off discount code. But if you also sell in Euro's to your European market, then you won't be able to create a €10.00 off discount code.
There are similar limitations with gift cards where the value of the gift card can only be set in the stores base currency.
Of course Shopify is always evolving and in 6-12 months time these limitations might be removed.
Exchange rates and fees
Related to the above, you will also likely be wondering about the cost of doing business in these localised markets and currencies. Put simply, if you work in different currencies through Shopify Markets, your transactions will be subject to exchange rate fees at point of purchase – whereas an expansion store connected to a bank account in that currency will not (well at least until you decide to exchange that value across boarders)
Previously, Shopify always paid out to retailers in their primary store currency, and therefore. However, you can now add up to 8 bank accounts in different currencies depending on your plan and location.
Ease of use
Aside from the business of actually sending and receiving money, what is the experience of working with Shopify Markets like – compared to opening an expansion store? Well, as you might imagine, it’s an awful lot easier!
With a regional store crafted in Shopify Markets, you can effectively be up and running with just a few clicks. Launch is fast and easy, and many of the features you’ll want come as standard, right out of the box. Expect full SEO integration for example, and streamlined operations controlled across all regions from inside one easy-to-navigate Shopify control panel.
While you can't select custom regional themes for each of your Markets using Shopify Markets. Shopify does provide the ability to target each market individually both with style and content. However, if you’re just looking for some intuitive and immediate portals to get your business localised into other regions and currencies, Markets offers a quick and cost effective option.
Similarly, your IT department will likely thank you for choosing to go with Shopify Markets. Using this model, whole businesses can be streamlined effortlessly across different regions, using customisable domains, nested URL slugs, and sorted subfolders. All of this is good for business organisation, as well as SEO value – and provide lean teams with less management overhead than trying to run multiple parallel websites for expansion stores.
Supply chain efficiency
When it comes to logistics however, there’s a lot to be said for splitting your operation into fully segmented expansion stores. This way, your regional teams can work autonomously – they can control their own market stock, and respond accordingly to the demands and idiosyncrasies of different regional markets. You might also have different warehouses in different countries, and in this case, it might make sense for them to control their own separate expansion stores.
Some brands also choose to integrate apps into their supply chain model – say for example, solutions like Huboo or ShipTheory, which are designed to automate large parts of the supply chain process. While Shopify Markets supports warehouse locations you may run into some limitations over the separate expansion store model.
The Verdict: Shopify Markets vs. Expansion Stores
As perhaps you can see, there’s no simple answer here – both Shopify Markets, and the approach of building whole new Shopify expansion stores for different regions, will have their relative strengths and weaknesses. There is no definitive one-size-fits-all answer, because it will depend massively on your brand, your volume of sales, your supply chain model, the location of your customers… and many other factors besides.
As a general rule though, what we tend to see is that larger businesses with warehouses or fulfilment centres in multiple different countries, or those who do large volumes of sales in a number of different currencies, will typically benefit more from the use of expansion stores. Whereas, those brands with leaner teams simply trying to reach a few more customers or test international demand with their existing stores may be better served using the built-in features of Shopify Markets.
Longer term, especially as Shopify Markets matures, we fully expect to see more adoption even by larger organisations. Especially as businesses chase operational efficiency. Something both Shopify & Shopify Markets is innovating for international operations.
We hope the advice here has been helpful. If you’re left with any questions about whether an expansion store, or Shopify Markets, would be a better fit for your business, why not get in touch and talk it through with our experts?
One thing that’s always true in business is that every brand’s story is different! And here at Inspira, we would love to learn about yours.
