By Roderic Michelson, Business Growth Consultant at Aralex Consulting Ltd
Domestic demand, in most industries, is falling. So now is a good time to look outside the UK for growth opportunities.
It’s easier than ever to sell abroad as regulations are being streamlined and borders are opening. Selling outside the UK is not just for big corporates, smaller companies can tap into these lucrative markets too - if you know where to start.
Most companies don’t even try to sell abroad as they have no idea where to start and are afraid that it will take up too much time and money. But this needn’t be the case. Here are five ways to get the ball rolling without additional investment…
1) Your first port of call should be a large, local public library. Most libraries have a good range of materials available on doing business in your chosen markets, including online resources. If you are unsure where to look ask the reference librarian for help as they are usually well trained in information research and will be able to guide you to the most appropriate sources.
2) Your next stop is the nearest embassy of the country where you want to sell your product. If it’s not practical to visit them, call or email the Trade Section or ask for the Trade Representative. These people are usually helpful in recommending possible partners within the target country. Also your in-country approach is usually taken more seriously if you say the company has been recommended by their embassy.
3) Another excellent source is your local Chamber of Commerce. You will receive guidance on exporting procedures and should be able to get a list of potential partners from the Chamber’s library. At the very least they should be able to introduce you to the Chamber of Commerce in your target country’s capital city. After the introduction you can ask the local Chamber for assistance and recommended contacts.
4) There are also some useful online resources. For example you can search for partners on www.kompass.com and www.kellys.com. These are two extensive resources that will enable you to build a list of potential partners abroad. The basic profiles are free. Large local libraries sometimes have a subscription and provide you with access but if not then google the company and visit their website. Using this method you can usually build up a short-list of target companies quite quickly.
5) Don’t email them. It may seem easier and quicker, but with so many unsolicited emails and spam yours is likely to get ignored. It’s far more effective (and professional) to fax or post your letter to them. Tell them that their name has been recommended to you and that you are looking for a partner to help sell your product in their territory. Follow up the fax or letter with a phone call.
If your partner deems the product/features/price suitable for their market, you agree on a sales development plan and sign an agency/distribution agreement to formalise their rights to sell in their territory.
When choosing a partner, look for companies where your product will receive proper attention. Avoid being part of a very wide range of products. Seek out opportunities to piggyback on some other popular non-competing complementary product, or on a company’s established customer base.
Another critical factor in choosing partners/countries is the need for marketing support and product adaptation. The more support needed, the less attractive the partner.
It’s generally best to focus on up to three key markets first in order to iron out any birthing difficulties. After 18-24 months you can gradually add more markets.
Even when you have found the perfect in-country partner, more work is still needed before your product can be sold.
For example your packaging and goods will need to comply with local regulations. You can find out about labelling regulations from your target country’s local customs office or by contacting the trade department of their embassy.
There is no need to change your packaging until you gain traction in the market. In many cases a sticker in the local language will do for a start.
Robust logistics are essential if you want to be successful abroad. Start with the large logistics companies like DHL, Kuhne & Nagel, FedEx, etc. Be ready with dimensions, weight, any special packaging requirements and ask them for a quote.
Shop around. This is not a standardised business and you will get variations in quotes for the same shipment to the same destination. Some smaller or regional carriers might quote you better rates if they have a regular line to a nearby city.
Import regulations differ from country to country and finding the ones related to your product is part of your homework. Depending on the type of product you sell, your item might need to be tested and certified by a local laboratory before it is allowed into the country. Again, shop around. The laboratory will usually be able to advise you on the safety regulations you need to comply with, but always check the information independently.
Finally, exporting is an excellent avenue for growth but it needs patience and persistence to get established in foreign markets. Realistically it will take about two years before you’ll reap significant benefits.
About Roderic Michelson
Roderic Michelson is a growth expert for Aralex Consulting Ltd. Roderic’s expertise is in being able to assess quickly a company’s growth potential, as well as areas for improvement. Working closely with his clients, he helps them prepare and implement a project plan to position them for sustained growth.