How I started trading overseas
Overview
Trading overseas can be a way to reduce dependency on your home
market, and can spread R&D or manufacturing overheads across a
wider customer base. But it can also be a nightmare that consumes
immense time and money for little reward.
The challenge
How to decide whether to venture overseas and how to go about
it? Different businesses have radically different overseas sales
potential. Some will have little attraction, but others can
surprise on the upside. What should we do?
The solution
We decided which countries to target. The first question to ask
was why would anyone want to buy your product or service in another
country? Then we looked at language, legal and cultural barriers,
the competition, what channels to market might exist that could
carry our offering and how easy access was - face to face meetings
in Australia are a problem from the UK!
We did lots of research. You can't assume that what works in the
UK will work abroad. For instance, we found that the UK had a large
range of PC and internet-based magazines, and we got lots of press
coverage. In the US, PC Magazine had a circulation of over one
million and dominated the landscape. It was horrendously difficult
to get PC Magazine's attention. Foreign markets have been the
graveyard for too many UK businesses that jump without
looking.
I'd say that if a market already exists for your type of product,
and you are better or cheaper than the incumbents, then consider a
distributor. Alternatively, with ecommerce and international
shipping companies, you could try supplying direct from the UK. I'd
also recommend that, if you start your own operation, commit few
resources and set targets which must be reached before more funds
are released. Then once you have some customers, survey and profile
them so that you can rapidly understand who they are and why they
are buying, and adjust your product and marketing accordingly.
Key lesson
Entering foreign markets can be expensive, time consuming, and
will present legal and cultural barriers, not to mention language.
Carry out extensive research before you commit significant
resources.
Top tip
If you're starting up overseas, send a trusted member of your
own staff to the country. They will see what you need to change and
make the case to you. An outsider will find this much harder, and
you will always wonder if requests for change are just an excuse
for failure.
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