Assignmente:
I thought I would share my personal experience with our efforts to grow our business overseas. On the bottom you will find some questions .. please answer them with any comments for this week's discussion thread.
As you may have read I am the Partner / Sales and Marketing Director of my wife's company Entryways (see www.entrywaysusa.com). This company designs, imports and distributes high quality doormats to many retailers - both online and bricks and mortar - in the US and Canada.
I was just in the UK in February attending a trade show called ‘Spring Fair' in Birmingham, so I thought I would give you a little background and explanation on what we are doing to grow our international sales.
About a couple of years ago our company had grown to a size where we thought that we should consider some exporting. By ‘.. grown to a size ...' I mean that our company could now afford to spend the time and resources to invest in overseas business. I feel that for a firm there is a size where you can afford to start thinking about overseas business, as it does cost (usually) more to do so than domestic sales. This size depends on the type of business and other factors - it's not really a set sales level, it's just each owner's / CEO's comfort level. For some CEOs who have a lot of international experience and feel comfortable doing business in different countries, this level is quite low and indeed they may start having customers overseas from day one. In our case, even though as you can imagine I do feel comfortable doing business elsewhere, we were growing so fast in the USA that I felt we should first pick the ‘low hanging fruit' in the US first.
So one fine day I decided to start the process of selling overseas when we had reached this comfort level (sales of $1.5m with high gross and net margins). Since we are a small company with limited resources, I could not afford a major research project. Therefore, I used an abbreviated process by asking the following questions:
1. What countries?
2. What segments?
3. What products?
4. How to approach them?
I decided to first approach #2. Since I did not have resources to do a full bore study, or even a smaller one, I decided to first solicit business from flash sales companies (i.e. ones which have 3 day discounted sales to consumers, e.g. Zulily.com or Rue La La in the USA). We are very familiar with these types of companies; and more importantly, they are an effective way to gauge consumer response immediately. In addition, there is no inventory risk - a flash sales site can list our products, sell them and then we can immediately ship only the mats that sold. Finally it's not that hard to find these companies.
We then decided that Europe would be the best place to start, as consumers there are quite familiar with the internet, and also in terms of shipping we felt we would be able to air freight products and still be somewhat competitive. I also am more comfortable with Europe as opposed to say South America.
After doing some research, I approached via letter and samples about a dozen of the companies, and within a month had landed several, mainly in the UK. Sometimes getting names was not easy, so I would send this information direct to the CEO who usually pass these things along. I also reached out to our USA customers and asked them if they had foreign operations, and indeed two did.
I was therefore able to quickly get some sales and more importantly get some experience. After about a year of this, I decided that we should start stocking product in Europe. I picked the UK for this for several reasons. First, the UK has a very liberal and easy way of doing business - you can set up a company for $200, and filing taxes is easy. Second, two of our new customers were in the UK anyway, and by having product locally I would be able to give them better pricing and hopefully boost my sales. Third, in the UK they do speak English which makes our lives easier in many ways. Fourth, we had found through another company a warehouse and distributor which was eager to start carrying our products. They were very familiar with a couple of the markets we were looking to get into, and indeed they even are helping us find sales reps and so on.
To grow our business after we started stocking product there, I will be overseeing a variety of efforts - trade shows, mailings, hiring sales reps, internet marketing, and so on. The main focus will be 'laser marketing' -- i.e. getting names and approaching high-potential sale customers. It will be a slow build because without a decent budget it's hard to have fast growth, even if you try low budget marketing efforts such as social media, PR, etc. But we are Ok with that.
That's a little synopsis .. so here are the questions:
1. Can you think of anything else we could have done to enter the UK market?
2. What do you think our next steps should be?