Germany has a lot to offer for those looking to start an online business there. Many Germans have a widely recognized habit of buying online, and targeting these eager customers will be an appealing prospect for any store as a frontrunner for e-commerce throughout Europe, Germany is a good potential opportunity for new online businesses. This article will help newly woke entrepreneurs discover all they need to know when looking to start a business in Germany.
Germany ranks high for E-commerce Retail in Europe
Second to the UK, Germany has one of the biggest e-commerce markets in Europe. Factors that define the German market encourage the online commerce sector including WiFi provided to 90% of the country’s population, a solid infrastructure, and a high quality of living. These factors contribute to Germany being a market with a strong digital culture. According to World Bank data from 2016, about 9 out of 10 Germans are constantly on the internet. Moreover, 87% of the population shops online, for most things including electronics, clothing, and home decor.
Get a Physical Location for Offices
While a German domain is not required, having a German address is a significant step in gaining the trust of German customers. Moreover, because it is normal practice to return online purchases, having a physical location in Germany not only helps with returns but also encourages customers to shop online because returning goods will be easier. To rent an office or factory, people can browse through Erfahrungenscout.de and find a reputable rental agency in Germany.
Create a Website with a German Translation Option
Although 56% of Germans understand English, you should prioritise translation and localization into German for your online business. To build a trustworthy reputation among German customers, having a website that works in their native language is far superior to just English. In addition, when marketing a business on social media it’s better to communicate in the country’s native language and use local idioms or colloquial expressions to attract more customers. Therefore, using tools like multilingual international Suchmaschinenoptimierung (SEO) practices, Google Ads sponsorships and advertising across popular digital channels will help any online store enter new local markets.
Provide a wide Range of Payment Options
Although Americans and the rest of the world tend to use credit cards more often, Germans’ most used payment methods are open invoices. Unlike payments through PayPal and other online payment providers, Germans prefer to receive items in person and first determine whether they want to keep them before they pay an invoice. However, with credit cards and other payment options, they are forced to return a product and that’s why they have such high return rates nationally. Therefore, to avoid losing customers, new e-commerce businesses should consider providing options for everyone which will include the use of credit cards, direct debit, secure online payment providers, electronic payments, and open invoice systems so they can try before they buy.
Online Regulations & VAT Registrations
In Germany, the typical VAT rate is 19%, and every e-retailer must be VAT-registered in order to comply with German legislation. However, if companies are considering trading with Germany from another European nation, there is a €100,000 sales barrier below which Value Added Tax does not apply. The procedure of establishing a new business in Germany is fairly difficult, although assistance is always accessible within the country.
Moreover, all e-commerce or general companies in Germany for that matter need to follow the basic principles of the Datenschutz-Grundverordnung (DSGVO), payment security, and cookie law compliance to have an operational online store, and having these will build a solid and trustworthy relationship with German and other European customers.
While the German e-commerce market demands a lot of requirements, it has fantastic potential for e-commerce retailers. These businesses can position themselves for tremendous growth in a country of eager online shoppers by taking the time to create trust with customers while operating businesses in a way that gives consumers a good shopping experience.