How to sell B2B SaaS in the European Union
Are you considering taking your SaaS business to a global market? There are a few rules and regulations you’ll need to be mindful of before moving forward, especially if you’re selling B2B. Unfortunately, you can’t just set up shop and start providing access to your SaaS products to other countries. You’ll need to think about taxes and the unique requirements of every country you decide to sell in.
Don’t worry, you don’t need to do it alone. We’re here to walk you through the nitty-gritty details of the process to help you develop a strategic approach to take on the global market.
Here's everything you need to know:
Overview of the EU B2B Sales Environment
Typically, B2B selling is all about the relationships you build with customers. However, when you’re selling overseas, you don’t have that same face-to-face connection needed to help you solidify partnerships and continue to move things in the right direction. Unlike other business opportunities, you may need to rely on email communication, Zoom calls, and marketing materials as your go-to mode of communication to sell your product in the EU. If your assets aren’t translated into their native language or aren’t as high quality as your competitors, you risk losing business.
There's also taxes to consider. The beauty of SaaS is being able to go global but as soon as you accept cross-border payments, you're liable to calculate, collect, and remit those tax liablities. With a solution like us, Lemon Squeezy, we remove all of that burden and headache.
Outside of that, there are several cultural differences to take into consideration. The different languages, social cues, and traditional selling approaches may impact your selling techniques.
Let's not forget to mention the SaaS product market is competitive. SaaS products are in demand and continue to grow in popularity. It seems like there’s a SaaS product for almost everything in the world. So, if you're ready for global growth, you'll need to come prepared and ready to take on your competition.
What makes selling in the EU unique?
It may surprise you to hear that the EU isn’t as united as you may think. In fact, many of the countries in the EU don’t meet eye to eye on how heavily SaaS products should be taxed in the country.
Of course, take this with a grain of salt. Tax on SaaS products is a relatively new idea. However, as the world continues to move towards a more digital lifestyle, we're sure to see a rise in taxes and changes in and outside the EU.
Here’s a breakdown of some of the differences:
- More additional information is needed about the customer to complete a sale than in the United States
- Charges and additional fees need to be explicitly agreed on before moving forward with the sale
- Every product requires a 14-day minimum return and refund policy
- Taxes on SaaS products vary by country within the EU.
That's only to skim the surface. To learn more about the differences and the rules and regulations, you'll want to connect with your Merchant of Record or consider setting up a home base in the countries you choose to work in.
If you had an office and international staff in that country to help you make connections, you'd see better results that positively impact your bottom line. Of course, not every business has access to a budget to help them expand their workforce internationally, but it's a great option to keep in the back of your mind if you're serious about going global.
Payments Infrastructure is still limited
We'll be honest with you: You won't be able to successfully sell in the EU alone. The Value Added Tax (VAT) can get complicated when you start selling in different EU countries, especially since all 27 countries have different tax percentages and rules.
You’ll need a general understanding of how VAT works in the countries you need to sell to ensure you don’t cut any corners. With that in mind, many businesses are unwilling to accommodate payments, taxes, and fees associated with the EU.
We always recommend working with a Merchant of Record. A Merchant of Record is there to keep track of the VAT for you and handle all of the B2B sales you have in the different countries. With this partnership, you don't need to worry about anything. All of the liability with the purchase will land on your Merchant of Record. This will give you the peace of mind you need to grow your business.
Over 40 different countries have sales tax on digital goods and SaaS products. The sales taxes and sales tax laws vary by country. This means it can be challenging to keep track of the different rules.
Unfortunately, there’s also not a ton of payment infrastructure and solutions that can help you with the global expansion of your business. Before booking appointments and building your clients in these different countries in the EU, you’ll need to have a trusted payment infrastructure that can handle all of the logistics of the payments.
EU businesses are becoming more digital
The world around us is going digital, and more businesses are looking for technology to help them level up their business. The more digital they become, the more the demand for high-quality SaaS products will continue to grow.
That also means many connections you’ll make with potential prospects will be online. This may remove the human element needed to close deals and grow your business.
Start to think about all of the digital marketing assets you can use to stay competitive. Look at your advertising strategy, website, SMS marketing, sales, and outbound communication tactics. These tools will help you with your distant selling journey in the EU. The world spends countless hours behind a computer screen or on a phone: Take advantage of it!
The B2B SaaS market is growing at a rapid pace in the EU
As we've said before, SaaS products are in demand. These products help improve work efficiency and productivity. That means you won't be the only SaaS product business trying to win their business. Every email you send and voicemail you leave for your prospects: Your competitors will do the same.
Don’t let this discourage you. Instead, consider how you can use this as leverage to give you the upper hand. What makes your product and business different? What does your software do that other businesses don’t? Why are you the better option than your competitors? Are you planning on localizing your product for that country? Do you have a payment infrastructure that accommodates VAT?
You’ll need to figure out how to gain a competitive edge over your competitors in the European market. If you tackle every sale call you have with the same strategy as you do in the United States, your sales pitch will fall flat. So, what do you do? Stay two steps ahead of your competition by learning the ins and the outs of the EU market and growing your business with a partner that can provide you with the necessary payment infrastructure.
Organizational change is necessary to sell to the EU
The cultural differences in the different countries may require organizational changes. We'll break it down. Let’s say you want to see a business in the UK. These working professionals are task-oriented, organized planners. They are used to a 9-5 workday and take a formal approach to business conversations. If you want to seal the deal and make a sale, you’ll need to take the same sales approach. Every email and call you make should be personalized, formal, and put together. Send them an email following up after the conversation. Be stern but not off-putting.
Your sales team must take the time to research and understand selling in the EU to ensure they leave the best possible impression on the UK business.
That’s just one breakdown for one country in the EU. 27 other countries have different cultural differences your business will need to adapt to if they want to make B2B EU sales.
Outside of the cultural differences, you may also need to be GDPR compliant. GDPR stands for General Data Protection Regulation. It’s a series of rules that protect consumer data online. Most businesses need to be GDPR compliant before selling in the EU. This is an extra layer of protection to keep customers safe when using your SaaS product and provide personal information.
Start selling to businesses in the EU with Lemon Squeezy
The team at Lemon Squeezy knows everything you need to know about selling in the EU. We're well-rehearsed in VAT, know how to juggle the different countries, and have a payment infrastructure that can support your move to the global market.
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