Spreading your sales efforts too thin is dangerous for a new enterprise so, as a startup, conquering your own backyard seems a wise first step. Nonetheless, nine-out-of-10 global buyers is located outside of the United States. If your company can immediately benefit from international sales, it’s a topic worth the time and consideration but fully understanding the risks and rewards of international markets is critical.
First, a reality check. Entrepreneurs are challenged to blend long-term strategy with short-term sales targets. Often, it is difficult to reconcile the two but, if done correctly, your product should physically land in international markets 12 to 18 months after you have engaged with your first international buyer.
There are many steps that need to happen prior to buyer engagement, though, so jockeying between your daily domestic sales efforts while simultaneously laying the groundwork for international distribution is smart business. International sales won’t turn on at the flip of a switch. There simply isn’t a substitute for good, solid planning.
I’m from the government and I’m here to help. The government can be great help with exporting. US Export Assistance Centers (USEACs), located around the country, offer free primers and excellent seminars on how to take first steps into international exportation. USEACs also highlight some of the hurdles and challenges young companies face, such as trademark or patent infringements.
Adam Wilczewski, former chief of staff at the International Trade Administration and current partner at international consulting firm Busch Global Ventures, explains, “USEACs will outline what to expect – and more importantly, what to watch out for – when searching for an importer, buyer or agent. The value of the information provided is quite incredible and readily available at little to no cost to the entrepreneur.”
Language as a relationship builder, not a barrier to entry. Language might be an initial concern if your company doesn’t employ any multilingual experts. There are extraordinary resources in this realm, most of which can be used as a great point of leverage in international development.
Elias Garcia, CEO at leading global translation company Foreign Translations, remarks, “As emerging economies expand, consumers will continue to demand everything on their own terms, and that includes a preference for communicating in their own language. We understand effective exporters not only rely on precise translations but on well-tuned, well-timed language localizations to differentiate themselves in the world markets.”
Hiring translation services is much less expensive than most would think. Good translation creates a great first impression with an international buyer, making a tangible impact and paving the way for a mutually respectful relationship.
Green light. Now what? To dip a toe into international waters, select a few countries that are the best fit for your product(s). At Aunt Fannie’s, we selected countries in the southern hemisphere that have strong free trade agreements. Buyers in those countries will make our seasonal lead product a year-round seller.
The Honorable Nicole Lamb-Hale, former US Assistant Secretary of Commerce, International Trade Administration and current senior vice president at Albright Stonebridge Group reinforces this sentiment.
“Be smart about the process,'' she said. "With 95 percent of the world’s consumers outside of the US, focusing in particular countries with whom the US has free trade agreements, can make your international expansion more efficient. Moreover, international business helps diversify your company’s revenues, which has been most recently confirmed by statistics from the Great Recession. Exporters were able to weather the storm better than those who only focused on domestic sales.”
This commitment isn’t for the faint of travel-heart, however. Visiting the countries you intend to target is necessary. Attending trade shows internationally is a great way to embark on early development efforts. Entrepreneurs can get a feel for the market they are looking to sell into, talk with vendors, explore introductions and find potential buyers, all without needing to put together a formal marketing presentation or prospect list ahead of time.
Its official, international buyers want our products. Assuming in-country visits have been fruitful, the time has arrived to lay the groundwork for distribution. Find an attorney or agent in country who can file your necessary registrations, trademark applications and investigate your product’s harmonized tariff code. These items are all critical for brand protection, logistics, product pricing and government approvals (if applicable). These are normally the final steps before product touchdown, but many times, the most important. Details during this phase are key.
International trade is a process with many layers and steps. Knowing where to begin and being prepared is half the battle. Build the foundation through prudent planning, actively utilize the resources available and build relationships with people you trust in-country.
Capturing 90-plus percent of the world’s non-US buyers is a reward worth pursuing, so installing the international building blocks early on could put the global buying community well within reach for your early stage company.