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A client we work with has two online stores - a US version and a UK version, under separate domains. These stores have the same content and provide the same products, they're intended to be alternate versions of each other - but because of various international shipping and warehousing restrictions, they need to be maintained as two different sites.

The concern we have is that two sites with nearly identical english content are certainly going to rack up SEO penalties for duplicated content. Based on this google article, setting a link element with hreflang between the two sites is a good idea and can help with that <link rel="alternate" hreflang="en-gb" href="http://www.website.co.uk/" />. But is defining an hreflang enough to avoid duplicate content penalties between US and UK versions of the same site? If not, what other techniques do we need to consider?

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This is a difficult question because even with hreflang markup, Google doesn't always excuse duplicate content.

So the trick is to make the content sufficiently different. For online stores, this is actually easy. Include pricing info in the relevant currency (GBP/USD) and use schema.org markup for product, pricing, availability, shipping attributes. The reasons your client wants separate websites ("various international shipping and warehousing restrictions") could actually be the areas where you can get differentiated content for the two sites.

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