For cross-border e-commerce merchants, the struggle to scale internationally while keeping Customer Acquisition Costs (CAC) low is all too real.

Brands often get stuck internationally representing <10% or even <5% of overall revenues. Those who break through to 20-30%+ have something different figured out: scaling international revenues is not just about cutting shipping costs—it’s about optimizing the entire customer experience, i.e. CAC / marketing costs.

To put this into perspective, let’s consider a sample brand with a $100 Average Order Value (AOV) and a $60 CAC. A 30% reduction in your cost of acquisition (CAC) will always beat out saving $2-3 on shipping.

Unfortunately, most brands pass “international” to an operations or supply chain lead who ends up optimizing 10% of the overall cost equation (logistics + marketing cost = total cost).

Given the success we’ve had building our e-commerce business to 9-figure scale, and helping other brands across categories unlock incremental scale, we thought we’d share 5 simple tactics that can help marketers unlock their next level of scale.

Cracking CAC: 5 CRO Tactics to Lower CAC

1. VAT Inclusive Pricing

Impact: Increase conversion rate ~7-12%

VAT (value-added tax) is a tax that some countries impose on the final purchase of goods and services. In the EU and UK, even when customers pay this tax, businesses usually collect it at the time of sale and include the tax as a part of the product price. Customers are not constantly reminded they are paying ~20% of every time they make a purchase.

Now, VAT inclusive pricing means you’re showing customers the all-in price, including taxes before checkout. For brands selling in markets like the UK, this isn’t just a nice-to-have; it's actually now a requirement.

If you’re a shopper in the UK and you see a product at a price you like, get curious and click on the listing, only to see the price is 20% higher it feels like a bait-and-switch. So yes, if you run an A/B test with variation A charging the customer 100 GBP + free shipping and variation B charging the customer 80 GBP + 20 GBP VAT + free shipping, customers will convert higher in variation A about 7-15% more depending on the brand. And yes, these are stat sig results.

PS, here is an example of OpenBorder’s backend portal where customers can easily configure these pricing rules by region.

2. Localized Google Shopping Feeds: 10% More Traffic

Impact: 10%+ increase in organic traffic

In order to show up in Google Shopping feeds outside the US, you need to localize your Google Shopping feeds into a local currency. Unfortunately, Shopify doesn’t do this by default. Localizing your feeds tells Google you are ready to sell in that country.

For the brand above, implementing localized shopping feeds increased organic international traffic by 10%.

3. Delivery Promise: Boost Conversions with Confidence

Impact: 7-15% increase in conversion rates

For customers who know that they are shopping in a foreign store, there is always a suspicion that deliveries from a brand’s store might not be reliable. In international markets, marketplaces (like Amazon or local equivalents) are still the predominantly popular way to transact online because of the trusted delivery speeds and customer service.

One way to increase trust for international shoppers is to provide a delivery promise. We recommend showing this promise earlier in the funnel, pre-checkout if possible!

Note: Even if you can’t tell a customer in every country a convincing time of when they can expect their package, you definitely can for core markets and cities.

As with most CX interventions, we recommend running this as an A/B test so you can measure and learn the impact of this intervention on your store and for your customers.

Note: OpenBorder customers, you can run this test directly from your store builder and we automatically only configure the guarantee for markets where a strong delivery claim can be made.

4. Product Price A/B Testing: Find Your Optimal Price

Potential impact: 15% boost in LTV (lifetime value)-CAC ratio + 30% lift in AOV

Be careful when assuming that the best price to charge in an international market is the price you charge in your domestic market.

Nailing the right price in international markets can significantly boost profitability.

Here’s what you should keep in mind while A/B testing your pricing:

• What is your competitive set in a local market?
  • Look at the average local prices mark-up and average prices in local currency to recommend the new prices to test

• How unique is your product in a market?
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• If you have many skus, consider testing on a specific sku or sku x variant to learn, before making a sitewide A/B test.
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• When assessing results, look at conversion rate, CAC, sales, and profit metrics to determine the winner
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• The UK’s ARPU (Average Revenue Per Unit) will reach $2673.71 by 2029, translating to higher consumer spending on average. For comparison, the US’s ARPU is roughly $3000 in 2024.

Note: OpenBorder customers, you can run price tests down to the SKU x variant level from within your portal.

5. Checkout Tax Transparency: Minimize Cart Abandonment

Impact: Increase conversion rate ~15% checkout completion

While many international buyers don’t understand the tax and duty intricacies of buying from a US store, many frequent shoppers are very familiar with the process and often are looking to make sure the store they are buying from knows what they are doing.

One test that our team didn’t expect to yield results, but has driven a surprising increase in checkout completions is a checkout tax transparency module.

Guaranteeing that customers will not have any unforeseen customs charges upon delivery, thus improves conversion rate.

See below for exact copy that increased CVR by 19%, with stat sig results for a X figure brand.

6. Shipping Options + Markup Testing

Impact: 6-10% boost in LTV (lifetime value)-CAC ratio

HelloFresh drove >8B of revenues last year. One of the biggest levers their team has talked about in unlocking incremental scale is iterative and rigorous testing across discounts and shipping subsidies by market.

When focusing on the international market, we see meaningful margin left on the table when brands are not testing across shipping types and options.

Remember, some customers care about price, some care about speed. The latter tend to be price insensitive (make more margin on shipping), while the former will quickly convert at a lower rate when price increases (you will lose out on CAC)

Here are some sample variations we recommend trying:

1. Standard Shipping only
2. Standard Shipping at cost + Express shipping with markup
3. Standard shipping with markup/subsidy + Express shipping with markup
4. Free Standard Shipping + Express shipping markup

OpenBorder customers: you can run these tests within your CRO portal. Feel free to reach out to your AM on Slack if you need help!

Take Action—Optimize Your International Efforts

To maximize your international business strategy, focus on making informed, precise decisions that directly impact your business.

If your international growth has hit a plateau, these 6 strategies can help tip the scale in your favor.

The cumulative impact of these optimizations could be the key to unlocking substantial international growth:

The best part is you can get started with ALL of these simultaneously by choosing OpenBorder - our experts can help you implement all these tactics from the get go.

Get in touch 

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