Coming to America: United States market entry tips

Most global retailers have contemplated entering the United States market – possibly just because of the sheer scale of the market. American retailers rang up almost $5.5 trillion (£4.1 trillion) in sales in 2019. Plus, for luxury sellers, the US market makes up a huge portion of overall global sales. Additionally, the impact that American consumers have on worldwide traditional and social media is tremendous, which amplifies the value of their purchases of your products.

by David Kaufman and Staci Jennifer Riordan, Nixon Peabody LLP

The country, however, has some challenges when it comes to market entry. Most notably, there is already stiff competition in most retail sectors and key geographies. From a regulatory standpoint, the US is very open to in-bound expansion. However, we have noticed a few areas where retailers have been tripped up in entering the market.

Employment

Hiring and firing workers is relatively easy to do in the US as employees are typically “employees-at-will” and, therefore, don’t require written contracts. However, many retailers will often attempt to pay some of their staff (especially early on) as consultants or “independent contractors”.  That has put some global companies in hot water as these workers are later classified by regulators or the courts as employees. 

Privacy and the Web

International companies often assume if they are GDPR compliant, they are OK in the US, too. Unfortunately, many successful online retailers are tripped up because their policies run afoul of privacy laws, the overwhelming majority of which vary state-by-state (notably California) and other laws/regulations that impact websites and virtual activities.

United “States”?

Global retailers sometimes get intimidated when pondering doing business in several or all of the states of America. However, while there are differences across geographies, the bulk of what companies entering the US market need to worry about is similar in each state. Companies often tweak things to comply in each state or endeavour to comply with the most restrictive jurisdictions.