Exporters Product Selection For Each Market
Think about which of your products you should sell overseas. Do not automatically think you should be offering all of your products, or that the best home market seller is necessarily the one that will work in every international market. Match the product to the marketplace, as some products will work better in some markets than others. Questions you need to seek answers to include;
What is the competition?
Do you have a USP?
Can you be competitive?
Which will products and markets will be easiest to provide aftersales support to?
If you need help operating within the market you have identified, is that help available? Good distributors may already offering a similar product.
Use Of Different Selling Platforms
Polkadoodles, an award winning UK exporter, despite being a micro business, uses a breadth of platforms to offer and sell their products through. This gives them greater exposure for their growing range of products, but it also makes them less reliant upon one particular route to market. Their platforms include:
B2C website – 45% are exports of which 45% are to the USA
B2B website – 90% exports of which 80% are within the EU
European Distributors selling B2B and B2C
US Licensed Partner with a joint manufacturing facility:
US B2C shopping network
US B2C website
US B2B website
Planning For International Trade
The benefits of planning for international trade cannot be underestimated.
Strengthens and reinforces existing knowledge.
Highlights things you know, don’t know and what you want to do.
Highlights the strengths and weaknesses of your operation.
Just thinking about what needs to be done can be overwhelming, so planning helps break this down into bite-sized chuks. You might even surprise yourself just how much you already understand!
Makes you consider the financial aspects, particularly cashflow when dealing with B2B, something you may not be used to if selling B2C online.
As an SME it’s easy to avoid things do don’t like doing, whereas a plan disciplines you to address these things. See what you have taken action on and what you have not., making you more accountable to yourself.
An initial plan is a start, but it is important to keep it updated keep it live and relevant to both current and future activity.
It’s not about the size of your current business, so don’t be intimidated, it’s about your attitude and where you see your business going.
When planning first of all look at your current business – what is it that we do and core elements of what we do.
Where do your products sit in the market. What is your USP for your product offering. This also helps you to understand what partners you need to work with. Are you premium niche or volume? If you are premium niche you have to have to understand your story in order to command a premium value.
The UK has a cachet for quality, particularly in certain sectors such as spirits. Do the potential partners understand this?If they don’t they are the wrong partners.
Always think about your partners bottom line too.
Start exporting as local as you can, then try and select the next logical markets. Dealing in English makes for a gentler next step, before even more distanced markets with very different languages and cultural considerations. This helps with market visits and sorting the inevitable issues until you have a structure that is designed to cope with such ongoing demands.
You are always going to have people doing what you are doing – look around at the market and see what and how they are doing it. While it’s good to be the first entrant, the second can often make more money. Perhaps you can learn from a different category that targets the same segment of the markets audience.
Don’t let day to day running of a business take away from looking and planning to export into international markets.
When there are changes in the market, such as BREXIT, think about how you can help your trade partners and customers.
Grant Funding
Try and source grant funding, no matter how modest. This can help you attend events, invest in greater stock levels to fulfil orders more quickly, or larger orders without delays, or invest in the development of new products or skills of current and new staff. Many grant funding sources are available, but it needs some dedicated time to look and apply for them. Getting to key events can be a challenge, taking time out from the day to day challenges, but it can give you additional qudos in the marketplace.
Increasing International Sales Platforms
There are real benefits in increasing the number of platforms you sell through internationally. Not only does it increase sales volume opportunity but it also provides a more consistant level of sales with less dependence upon one platform that could, for whatever reason, close off at any time. Higher sales means the ability to achieve minimum order quantities (MOQ)with larger suppliers, with the likely efect of lowering costs and either increasing margins or making your product more competitive. Higher MOQ’s can also help you to source products faster, particularly useful to fulfil those unexpected larger orders.
A Few Tips For From some SME’s Who Have Ventured Into International Markets With Some Success
Be bold. Just because you are an SME, no doors are closed. Be forward and asked the questions as there is lots of help available.
Where there are perceived challenges have the confidence in your business. Think hard about the impact and how you can adapt. While your business is naturally valuable to you, if you currently work with partners it will be valuable to them too.
For SME’s involved in design, protect your Intellectual Property/Copyiright given that SME’s can’t afford the time or the investment in legal battles, especially no against major players with deeper pockets who can play the long game.
Do not underestimate the skillset of good distributors and importers. There are distributors in place who are going to know how to manage your product in each market. The challenge is finding them.
Best source for locating and international distributor.
Know your sector. Look at competitor, see who they are working with if you can. Often available from competitor websites, or from trade journals and associations from desk research.
Try not to get blinded by bells and whistes. Take it back, is there a personality fit. Stuff goes wrong, so you need to be able to work with people, therefore ideally need to find like minds.
Attending trade shows is key, so even if you know the sector very well, even if not exhibiting, you learn more about who is operating within different markets.
Can be hard work if you have the wrong distributor.
It can takes many years to form a relationship with a distributor you feel is going to be a best fit. It may be that the timing is wrong, don’t be knocked back because they say no now, just make sure you keep reminding them of your interest. Be willing to commit resources over and above what you would normally do if the entry is tough and the opportunity is great with a distributor – travel over, support with small stock without charge, so no risk and effort by distributor so that you can prove the business case. Great learning opportunity for you.
Human element to export. Always go up and say hello. Always be respectful. Be consistent and play for the long term.
Points Of Note.
Barriers To Entry
Barriers to entry into countries include both tariffs, which are legal barriers, as well as technical, which are none-legal barriers. The USA is a market where there can be a number of technical barriers which can make entry more challenging.
Creating An Export Mindset
There are over 180,000 UK businesses who trade in the EU, most of whom are SME’s. Each and every one is going to have to start trading with the EU as an export market as opposed to a home market. This is a change of procedure involving a greater level of skills and awareness. It does however create a mindset that allows UK exporters to export anywhere in the world without the barrier of a mindset that it is too difficult to do so.
Please note the information above is not legally binding and is only an opinion.