FREE GUIDE: Finding international agents & distributors, the benefits & pitfalls

Looking for the key to profitable international expansion? This article has the answers

Ever wondered why some strategies, which thrive at home, fail spectacularly overseas? What are the secrets to international success? This real-life example will help us to identify those secrets.

Once upon a time, IKEA, the global retail giant, faced an interesting dilemma. When they first expanded into Russia, they thought their tried-and-tested format – self-assembled, minimalistic, functional furniture – would work just as well as it had in other countries. The only problem was, it didn’t. Sales floundered, and the Scandinavian giant found itself in a conundrum.

Why? Well, it turns out Russian customers were simply not into the whole “DIY” culture that IKEA had so cleverly packaged and sold worldwide. They viewed assembling furniture as a chore, not an adventure. The very USP that had propelled IKEA to success elsewhere was flopping in Russia.

However, IKEA didn’t pack up and leave. Instead, they did something unexpected: they adapted. They hired a swarm of ‘handymen’ available for hire at checkout. These professionals would assemble the flat-packed furniture for the customers at their homes. And voilà! The sales picked up, and IKEA found its feet in Russia.

The lesson here? IKEA learned (perhaps the hard way) that even though they had a winning formula, it was essential to adapt it to meet local tastes and preferences.

Every international market is different. It’s a simple, straightforward fact, but one that’s surprisingly easy to forget. Whether you’re selling furniture, digital products or a service, it’s easy to assume that what works at home will also work abroad. After all, people are people, right? 

Well, yes, but also a resounding no. People come with cultural baggage, unique expectations, and distinct ways of life. They approach the world, and the market, with lenses shaped by their histories, their languages, their societal norms. It’s not just about speaking their language – it’s about understanding their idiosyncrasies and catering to their unique tastes and preferences.

Don’t let the simplicity of this insight deceive you. It’s as profound as it is practical. Recognising and adapting to these differences is the hallmark of international success. Just ask IKEA!

It’s just like stepping into an Ikea store, you find products designed and crafted to fit various needs, but imagine if you had a personal guide who’d help you navigate through the entire store, pointing out which product would be perfect for you. It’d be so much more convenient and less time-consuming, wouldn’t it? 

It’s the same when you’re planning to expand your business to international markets; you’re stepping into a space that’s packed with opportunities, but it can be a little overwhelming trying to figure out where to start and what to do. 

This is where Go Exporting comes in. Our Export Growth Plan Service is designed specifically for those who are ready to venture into international markets but could use a little bit of guidance. 

Here’s what our Export Growth Plan Service offers:

  1. Understand exactly which international markets offer the best opportunity for your business: We do a deep dive to identify where your products or services will make the biggest splash.
  2. Evaluate and compare markets: Not all markets are created equal, and we’ll help you rank the opportunities, so you know where to concentrate your efforts.
  3. Understand Customs and Compliance Rules: We help demystify the often-complex world of international trade regulations, ensuring your business stays on the right side of the law.
  4. Define your best route to market: We lay out a clear, step-by-step path to get your products or services from concept to customer.
  5. Identify key distributors, partners, and customers: We help you identify the key players in your new market who will help your business succeed.

Think of our Export Growth Plan Service as your compass, guiding you towards successful international expansion. 

Time to unlock your business’s global potential!? Click here to discover how the Export Growth Plan Service can pave the way for your international success! Let’s conquer the globe together.

Remember, every international market is a unique treasure trove of opportunities waiting to be explored. As you embark on your export journey, keep in mind that understanding cultural nuances and consumer preferences will be your key to unlocking untapped potential. Just like assembling that first piece of IKEA furniture, take it one step at a time, and soon you’ll see your business flourish in uncharted territories.

And here’s a bonus insight: Building relationships is the currency of global success. Cultivate authentic connections with your partners, customers, and distributors in these new markets. Trust, respect, and open communication will be your most valuable assets in this grand global adventure.

Happy exporting, and may your business venture be an exciting and rewarding odyssey!

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The surprising journey to global success

If you’ve ever wondered what it takes to go from a local sensation to a global powerhouse, then I’ve got a story that will captivate your imagination and transform your perspective. Brace yourself for an extraordinary tale of triumph against all odds.

Once upon a time, in the glamorous world of fashion, there was a renowned brand called ABC Fashion. Known for their chic designs and trendsetting styles, they set their sights on conquering international markets. But little did they know that their journey would be filled with unexpected twists and valuable lessons.

ABC Fashion believed that partnering with a distributor would be the key to instant market access. However, their path to success turned out to be far more complex than they had anticipated. The vibrant patterns and bold colours that made ABC Fashion famous fell flat among the more subdued and classic preferences of foreign consumers.

But ABC Fashion was not one to back down. They quickly realized that conquering new markets required more than just relying on a distributor. They immersed themselves in the local culture, studying fashion trends, consumer behaviour, and the preferences of the target audience.

With their newfound insights, ABC Fashion made a daring decision. They adapted their designs to cater to the local market, striking a delicate balance between their brand identity and the cultural nuances of the foreign market. And to their surprise, the tweaked designs began to resonate with fashion enthusiasts.

But their challenges didn’t end there. ABC Fashion realised that relying solely on a distributor was not enough to establish a strong market presence. They took matters into their own hands, setting up a dedicated team to oversee the distribution process and working closely with retailers to create a unique shopping experience that showcased their brand.

Through their perseverance and willingness to adapt, ABC Fashion emerged as a global success story. They shattered the myth of instant market access and proved that strategic planning, cultural understanding, and taking ownership of the distribution process were the true keys to success.

I wanted to share this incredible journey with you because it holds valuable insights that can transform your approach to market expansion. In our fast-paced world, it’s essential to embrace a comprehensive strategy that goes beyond traditional notions of success.

Now, take a moment to reflect on ABC Fashion’s story. It’s a testament to the power of perseverance, adaptation, and thinking outside the box. In the following sections of this article, we’ll delve deeper into the counterintuitive insights and practical strategies that emerged from their journey.

There’s an important lesson that emerges—a lesson that challenges conventional wisdom and provides valuable guidance for aspiring entrepreneurs. It’s a lesson that reminds us that success in the global market goes beyond relying on a distributor alone. So, let’s dive deeper and uncover the counterintuitive insight that can transform the way we approach market expansion.

A distributor does not guarantee instant market access

While partnering with a distributor can provide certain advantages, such as local expertise and distribution networks, it’s essential to remember that true market success requires more than a simple alliance. The story of ABC Fashion taught us that understanding the local culture, adapting our strategies to match consumer preferences, and taking ownership of the distribution process are vital steps on the path to success.

By embracing a comprehensive approach, we gain the power to navigate the intricate landscape of global markets with confidence. It’s about forging genuine connections, engaging in market research, and creating experiences that resonate with our target audience. This insight shatters the myth of overnight success and invites us to embrace a strategic, long-term mindset that paves the way for sustainable growth.

So, harness the lessons learned from ABC Fashion’s journey and apply them to your own ventures. Use them to navigate the intricacies of international markets and build a solid foundation for success.

Now that we’ve explored the importance of strategic planning and understanding the dynamics of international markets, it’s time to equip ourselves with the right tools to navigate this intricate landscape. That’s where the PartnerTrack Service from Go Exporting comes in—an invaluable resource designed to help businesses like yours find the perfect route to market. So, let’s take a moment to discover how this service can revolutionise our approach to global expansion.

Introducing the PartnerTrack Service – finding the right route to market. With this service, we work closely with you to define your ideal partner or distributor, identifying the specific attributes they need to possess to effectively navigate your market sector. Our expert team conducts a thorough search, meticulously vetting potential candidates to present you with the best options, allowing you to make the final decision confidently.

Program Highlights:

1. Understand exactly the ideal profile for your partner or distributor.

2. Search the target market for companies that match your ideal profile.

3. Contact potential partners on your behalf to assess their interest and suitability.

4. Evaluate their fit to your profile and the required attributes for success.

5. Arrange meetings, facilitating your ability to make the final choice of your ideal partner or distributor.

By leveraging the PartnerTrack Service, you gain a competitive edge in the market, ensuring that you find a partner who aligns with your vision and has the necessary expertise to support your growth. With our comprehensive approach and meticulous evaluation process, we eliminate the guesswork, saving you time, effort, and potential pitfalls along the way.

Take the next step towards achieving global market success. Click here to learn more about the PartnerTrack Service and discover how it can transform your journey to finding the ideal partner or distributor for your business.

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All change again: UK Gov updates plan for goods checks

The UK government has published its updated plan for checks on goods crossing the UK Border. 

This new Target Operating Model will now introduce import checks at the UK Border on ALL goods, as well as begin the introduction of a Single Trade Window together with the planned end of CHIEF in November 2023.

The new Border Operating Model will be digitally driven through the proposed ‘Single Trade Window’- a one-stop electronic portal, which aims to ease and speed up the customs process, and will give greater granularity for the monitoring and detection and enforcement of non-compliant activities.

So what is going to happen?

  1. All imports will be checked at the Border by Border Force/HMRC for compliance
  2. New ‘Sanitary & Phytosanitary (SPS)’ controls will be enforced especially on food products
  3. Additional Safety & Security controls on imports
  4. Controls are expected to start in October 2023
  5. New risk-based border processes will come into effect
  6. Changeover from CHIEF to CDS for exports will take place

What does this mean for you?

There is little detail is available on what the new processes are going to be, but it will cause some supply chain disruption- especially in agrifoods and food products

Based on experience you can expect delays in receiving or sending goods due to:

  • Border congestion
  • Pre-notification requirements of certain goods
  • Full physical inspections
  • Incorrect documentation 
  • HMRC computer system outages
  • Lock in any prices now before the cost effects of the import controls impact bite

What should you do?

  • Make sure you have enough stock to ride out a month of disruption
  • Plan any shipments for either before October or after October
  • Ensure shipping documents are complete with the right commodity code, certificates, and licences 
  • Keep your import and export records up to date

Expected timeline

31 October 2023 

– Export health certificates and phytosanitary certificates are to be introduced for medium risk animal products, plant, and plant products imported to GB from the EU.

End of 2023

Permanent waivers introduced from the requirement to submit Safety and Security declarations on certain categories of low-risk movements – fish which have been caught in UK territorial seas and landed outside of the UK, outbound transit and certain outbound freeport goods.

31 January 2024

-Documentary checks and physical and identity checks at the border are introduced for medium-risk animal products, plant and plant products imported to GB from the EU. 

The global model of controls is introduced for rest of the world imports, Health certificates will no longer be required for low-risk goods and pre-notification will no longer be required for low risk plant and plant products.

31 October 2024 

– Safety and Security declarations are required for EU imports. Alongside this, use of the UK Single Trade Window will remove duplication across pre-arrival datasets where possible.

Confused? Then reach out for help

Go Exporting provides customs and compliance advice to clients in the UK and around the world. We answer your urgent questions or provide a complete analysis culminating in a step-by-step procedure for you to follow which ensures your products move from country to country with the minimum of fuss and duties.

Learn more about how we can support your business here.

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How to effectively expand your distributor network

Spring is in the air in the Northern Hemisphere and many companies’ thoughts are turning towards expanding into new international markets. One of the key decisions you need to consider is your route-to-market strategy. How are you going to reach the market? How will you carve out a market share? 

Often the easiest way to enter a market appears to be through a local distributor or agent. This is a low-risk strategy on the face of it, certainly from a fixed-cost perspective. But how do you find the right distributor or agent in your target market? 

This is a question we are often asked by clients, so have produced a new free guide, available to download from our website.

Download now: How to find a distributor

There are a number of ways to start your search. Choosing the right distributor or agent is critical. Get this wrong and it can severely disrupt your progress in the market. 

The first step is to define your ideal partner profile. What type of partner or distributor are you looking for? What is the ideal size of company? Which market sectors do they operate in? Which complementary products will they be selling? What resources do they need to have to be able to best promote your products or service? Any specific experience or technical knowledge they require? And so on. List all the factors that are important to you in your new partner or distributor. 

Only when you know what you are looking for, will you know when you have found the right one!

Once you have defined your ideal distributor, the next step is to research the businesses which fit your profile. There are a number of ways to do this which we explore in the guide. It is important to take your time. Draw up a list of possible companies, then review them more deeply for suitability to refine your list to the most likely candidates. 

You are now in a position to start contacting your dream list of potential distributors, to evaluate their interest in working with you too.  Be persistent. They may not respond to your first contact but keep going until they do. Whether that response is positive or negative, it helps to narrow down your search. 

Approach them with details of your product or service and shorten the list to those who show the most interest, combined with required market presence and potential.

Do not rush in, take your time to assess potential candidates, talk to more than one. Visit them, get a feel for the company, who their customers are. Do they really specialise in your market sector? 

It is very important to choose carefully. This distributor will be the face of your company in the market. You may well be judged by who you are associated with. Make sure they have a good solid reputation and a long-standing interest in your market.

Also look at their existing portfolio of products or services. Who do they already represent? Are they complimentary or competing? Are they operating in the right market sector? Do they appear to have a lot of products already for the resources at their disposal? Is this a concern?

A well-connected representative can be worth their weight in gold in helping you make entry into the market. With the right connections they can FastTrack you in front of the right customers but beware those who promise amazing things when in reality they are either already fully committed, not in the right market space or have conflicts of interest. It is not unheard of for a supplier to be tied up for years with a distributor who either cannot, or deliberately does not, market it aggressively. Be wary of those who profess to be well-connected or related to the Prince or Government Minister.

Once you have narrowed it down to one or two potential companies, suggest a loose working relationship to start with until you are both sure you are a good fit. See if they produce the goods, open the right doors and hopefully secure some orders before rushing in to an exclusive or long-term contract. 

Set clear expectations from the beginning and agree key performance indicators. Assess their actual performance over at least 3-6 months before formalising the relationship. Take the time to build mutual trust, you are looking for a long-term partner, not a quick buck. 

When you do enter into a formal or exclusive contract, make sure the basics are right so there are no conflicts later on. In the guide we explore the essential elements of a distributor contract. 

Download now: How to find a distributor

Make sure any exclusive contract is mutually exclusive! You don’t want your distributor or agent representing a competitor also. 

Remember making the right choice is critical to the success of your market entry strategy. Finding the right distributor can be a complicated and time-consuming process requiring experience and expertise to complete effectively.  

For this reason we developed our PartnerTrack service where we help you define your ideal partner, carry out the search, evaluate and approach potential partners to help you select the right one(s) for your business. 

PartnerTrack is a cost-effective way of starting your export journey to profits in your new target market.  For further information and a no-obligation discussion, please contact us today.

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Could the Windsor Framework be about to implode?!

Anyone trading with or from Northern Ireland since Brexit will be aware of the increased difficulties and effective border down the Irish Sea. It’s an issue which has been a constant bone of contention, especially with Northern Ireland politicians, leading to the collapse of the Stormont Assembly after the DUP withdrew. 

Rishi Sunak, the UK Prime Minister and Ursula von der Leyen, President of the European Commission announced the so-called Windsor Framework on 27th February, hailed as the solution to the issues and a victory for common sense. But what does it mean for international trade? Will it actually improve the situation for UK-NI traders without closing the border between NI and the EU?

One of the key wins is the Green Lane/Red Lane idea where goods from the rest of the UK destined for Northern Ireland will follow a Green Lane, with a separate Red Lane for goods destined for or at risk of ending up in the EU. It has been publicised as if the Green Lane will have virtually no paperwork and movement of goods to NI will be like before Brexit. 

As ever the devil is in the detail. There will in fact still be paperwork requirements for traders, albeit at a significantly reduced level. There will still be around 25 datapoints required. This is not being called a Customs Declaration, but some would argue in effect that is what it will be. Goods in the Green Lane will not be subject to systematic checks, though the facility for spot checks is there. 

Parcels will not be subject to full customs declarations but from 2024 the parcel operators will be required to share data with the EU to manage smuggling risks. 

Current bans on certain products like chilled sausages entering Northern Ireland as a result of EU law will be lifted, meaning anything available in UK supermarkets will once again be available in Northern Ireland. New labelling arrangements will come into force for some goods. UK VAT and Excise Duties will once again apply in Northern Ireland for alcoholic drinks for immediate consumption.

Northern Ireland retailers will have to qualify as trusted traders to benefit from the reduced paperwork, however. Rishi Sunak explains:

“It means food retailers like supermarkets, restaurants and wholesalers will no longer need hundreds of certificates for every lorry,” Sunak said. “If food is available on supermarket shelves in Great Britain, then it will be available on supermarket shelves in Northern Ireland.”

Personal, online shopping and business-to-business parcels sent from Britain into Northern Ireland “will have to complete no customs paperwork”, he said.

Download now: Checklist for exporting from the EU to the UK post-Brexit

Bans on seed potatoes and 11 types of native UK trees will also be lifted. Medicines approved in the UK will automatically be available in Northern Ireland. This is a major boost for pharmaceutical companies in the UK and the NHS.

Goods moving from NI to the rest of the UK will not require paperwork. 

On the face of it, this is a good agreement for Northern Ireland, keeping its foot in both the UK and EU with it seems the minimum of bureaucracy. Yet could all be about to implode? 

A key element of the framework is the so-called Stormont Break, designed to give the Northern Ireland Assembly a say on how EU laws are applied in Northern Ireland. It can effectively put a brake on new laws being implemented. 

Read more: New Northern Ireland framework could unlock US trade deal

The DUP has indicated that it will oppose this element of the framework in a House of Commons vote on 22nd March 2023. If they do, then the future of the overall agreement could be in doubt. The bill will still pass on Wednesday as it has Labour support, but ultimately the DUP must be convinced in order to restart the power-sharing executive in Northern Ireland which has failed to sit for over a year.

Watch this space!

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The Expert Exporter: Taking time to work on your business, not IN your business

I was at a conference this week all about marketing and how to expand your business. There were some truly inspirational and interesting speakers, from TV Dragons, major company CEOs, through to a performance psychologist and marketing experts. 

One theme that came out time and again was the importance of planning and taking the time to work on your business, not in your business. Creating the breathing space to really focus on where you want to go and what you need to do to get there. Yet at the same time remaining agile enough to react to ever-changing market conditions. Who would have predicted a global pandemic or war in Ukraine with all their human and economic consequences?

It struck me that this is exactly the support we offer our clients on their export journey. We help them to focus on taking the right decisions; not to rush in before they are export ready, before understanding customs and compliance requirements, before evaluating their target markets and the true potential they offer, before thoroughly researching the right routes to market and local channel partners. 

When confronted with the day-to-day challenges of running your business, the pressure to meet growth targets, or replace declining markets, it can be difficult to focus on making informed decisions. There is a tendency to rush in. 

This is where Go Exporting can help you. We take the strain by doing the important groundwork, providing accurate information to allow you to make the right decisions on your international strategy.

With over 30 years’ experience in helping businesses just like yours to profitably expand into international markets, we have developed a range of cost-effective services which support you in the right areas along that journey.

These are just some examples of how we can help. Every customer is different, however, so we are flexible and work with you to achieve your objectives.

Take time out to work on your business, not in your business.

For the month of October, we are offering a limited number of FREE 30-minute consultations with our CEO Mike Wilson to discuss any aspects of your international journey you would like to raise. He will provide advice and answer your direct questions. There’s absolutely no obligation and no hard sell…. in fact, no sell at all! This is a special benefit offered to our customers and newsletter subscribers.

BOOK YOUR FREE CONSULTATION TODAY
Limited slots available!

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The Expert Exporter: Ready to re-focus on international expansion?

Welcome back to the September edition of our newsletter. It’s been a very hot summer in the UK with temperatures reaching over 40 degrees for the first time in history! Global warming is here and needs to be tackled sooner rather than later. Despite the heat, hopefully everyone in the Northern Hemisphere is back from their summer breaks suitably refreshed and ready to expand their international business.

The first question to ask is Where? Where are the best opportunities for my business? Throughout the articles in our Expert Exporter resource hub one theme is consistent – the need to focus. It is impossible to export everywhere at once. A scattergun approach simply will not work in the long term. You may have some short-term success by hitting the right customer at the right time, but to profitably expand your exports you need a well thought out and suitably resourced plan. It is counterproductive to try to enter 10 countries all at once if you only have the manpower and resources for one. Better to do one well and then move on to the next when the time is right. 

How do you narrow down and identify your target market? Gut instinct? NO!

You need to take a much more measured and scientific approach than that, really get to know the possibilities for your product or service, decide which will be your target market(s).

Look in-house. 

Research your own data. Where do your enquiries come from? Where do you sell at the moment? Do you understand why? What are the drivers for those customers to buy from you? Is it a one off or is there a real market demand? Ask them for feedback.

Where your competitors sell. 

Where do they have their own sales team, a distributor or agent? Where do they sell directly from head office? Where do they attend conferences and exhibitions? Where do they advertise? Are they a member of any overseas trade bodies? Have they invested in specific country approvals? 

Get to know them better than ever before. They may well save you a lot of time, money and effort by pointing you in the right direction. Don’t worry that they are there first, it just shows there is a market and you already know what your value proposition is in order to sell against them.

Market Size Data 

Competitors and in-house data are helpful, but what if they are misleading? Is there any official data on the size of market in your target country or countries? If not, is there any private research available or could you commission some? Consultants, like Go Exporting, often offer this as a cost-effective service to clients in order to build a longer-term relationship.

Customer Analysis

We’ve already looked at where your and your competition’s existing customers are, but we also need to analyse whether the buyer for your products or service is the same in each market. 

Is there a different supply chain set up? Are there specifiers involved? Does the government or ultimate client purchase directly, or do subcontractors procure as part of an overall package or service? The distinctions may seem slight, but it can make a big difference to the ease of market entry and therefore the market potential.

Barriers to Entry

So, we’ve identified what appears to be a lucrative country for our products. There is a good market size and we have identified who the potential customers are. All seems good, but we are not yet ready to commit. First, we must identify the barriers to entry. 

Are there approvals required before we can sell? Is there any national certification or government registration process? Is there trade body we need to be a member of? Is membership open or closed? 

How strong is the local competition? Are there any well-established foreign competitors? We should not be frightened of competition, after all it is a sign that there is a market, but we should be aware of their strengths and weaknesses, their market position. Market share can be bought, but is it worth it in the long run? 

What are the transport links like? Will freight costs make our product uncompetitive?

Is language going to be a barrier? Is English commonly spoken in business?

Look at all the angles to see where obstacles may lie which could derail or seriously delay market entry.

Currency

How are you going to sell in the target market? Will you demand your home currency? If so how will this affect sales? Is the currency readily available?

If you accept the local currency what are the likely fluctuations in exchange rate? Will you bank accept the currency or will you need a local bank account? Is that feasible without a local entity? Are you prepared to do that?

Currency can make or break market entry, so be clear what you are taking on from the beginning and your acceptable level of risk. If yours is a high margin product or service fluctuations are not such an issue, but for lower margins beware and ensure price fluctuation is built in to contracts of sale.

Country Risk

How politically and economically stable is the target country? Is the regime likely to change? What is the likelihood that international sanctions or tariffs are applied? Is the economy growing or shrinking? Do the banks have any liquidity issues or concerns?

How comfortable do you feel about the risk?

Consolidate & Rate

We have developed a bespoke system for comparing countries, allocating a score and developing a league table of potential targets. We utilise this when we carry out this process on behalf of clients to consolidate all of the above information, weigh up the pros and cons, the potential versus the risk. 

This is used to give a rating for each country, from prime target, to do not touch. It’s a process which can take time and effort, but ultimately can save thousands in helping you make the best-informed decision possible. 

Download our new book

Download our new book The 7 Steps to Export Success on Amazon for full details and examples of our bespoke process.

Or for a no-obligation discussion on how Go Exporting can FastTrack your export growth please call +44 800 689 1423 or email info@goexporting.com.

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The Expert Exporter: 10-point international marketing checklist

In this month’s newsletter, we focus on an area of exporting which is often overlooked, or given less importance than in your home market, marketing.

Going global means your marketing also has to go global. You need to create awareness of your product, your brand and generate those all-important leads. What works in your home country, however, may well not be the right approach in another. International marketing needs to be considered carefully.

Even your product name or slogan needs to be considered. A direct translation may be disastrous. Even the big brands get it wrong:

Coca Cola’s brand name in China meant, ‘Bite the Wax Tadpole’

Chevrolet’s Nova, when translated in Spanish, meant ‘Won’t Go’

It is important to really understand your target market, its language and culture and so much more. We have developed a ten-point checklist for international marketing as a guide to the important steps to take to make sure you get it right. 

This is a topic which could take up a whole book on its own, so we have written a detailed Whitepaper on International Marketing which you can download for FREE here. It will help you complete the 10-point checklist to developing your international strategy summarised below:

Consider your international marketing strategy carefully. It does not need to cost a fortune, but it does require careful planning and a targeted approach. Follow our checklist and you won’t go far wrong. 

For help and support with your international marketing give us a call.

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The Expert Exporter: How do you find the right international distributor?

Now is the time to re-evaluate your global footprint and look to new countries for your international expansion. Look to where trade agreements are in place and economies are booming for the opportunities. 

Often the easiest way to enter a market appears to be through a local distributor This is a low-risk strategy on the face of it, certainly from a fixed cost perspective. 

A Distributor is a local company that will buy your product, market and sell it themselves. You rely on them to generate the leads and secure new business. They are your customer in the target market. In fact, if you enter into an exclusive agreement, they will be your only customer! You invoice them, they invoice the end user and take the corresponding credit risk. 

A distributor may well have a strong name in the market, which will quickly help you to gain market awareness and confidence in your product/service. Market entry can be quicker and penetration deeper due to the distributors’ connections. 

On the other hand, your identity and brand can become lost, with the distributor the stronger presence. The customer is used to dealing with them, you may not have a direct relationship at all. What happens if you decide to change distributor, or they opt to drop your product? You could be back virtually to square one.

A distributor may also overcome the currency issue too, as you can sell to them in your home currency, and they can sell to the customer in the local currency. On the other hand, you have all your credit eggs in one basket with a distributor and may well have a greater overall exposure. 

If you decide to use a distributor, it is critical to make the right choice. Get this wrong and it can severely disrupt your progress in the market. 

Do not rush in, take your time to assess potential candidates, talk to more than one. Visit them, get a feel for the company, who their customers are. Do they really specialise in your market sector? 

Here are some top tips to finding the right distributor:

  • Research into the market to see if any names keep coming up. Is there a stand-out candidate company you would really like to get on board?
  • Ask around. Let the market know you are looking and ask for recommendations.
  • Check with potential customers if they would recommend anyone. 
  • Look at the exhibitors or delegates at recent or future conferences. 
  • Check the advertisers in relevant magazines or journals. 
  • Look at the members of any relevant trade association. 
  • Do a web search. 
  • Ask for support from the Commercial section of your embassy in the country.
  • Check who your competitors use. Could they be tempted away?

In short, look at all possible avenues to create a target list of names to contact and explore. Approach them with details of your product or service. Evaluate them to shorten the list to those who show the most interest, combined with the required market presence and potential.

It is very important to choose carefully. This distributor will be the face of your company in the market. You may well be judged by who you are associated with. Make sure they have a good solid reputation and a long-standing interest in your market.

Also, look at their existing portfolio of products or services. Who do they already represent? Are they complementary or competing? Are they operating in the right market sector? Do they appear to have a lot of products already for the resources at their disposal? Is this a concern?

A well-connected representative can be worth their weight in gold in helping you make entry into the market. With the right connections they can fastrack you in front of the right customers, but beware those who promise amazing things when in reality they are either already fully committed, not in the right market space or have conflicts of interest.

It is not unheard of for a supplier to be tied up for years with a distributor who either cannot, or deliberately does not, market it aggressively. Be wary of those who profess to be well connected or related to the Prince or Government Minister.

Once you have narrowed it down to one or two potential companies, suggest a loose working relationship to start with until you are both sure you are a good fit. See if they produce the goods, open the right doors and hopefully secure some orders before rushing into an exclusive or long-term contract. Remember making the right choice is critical to the success of your market entry strategy. It can be a complicated and time-consuming process. For this reason, we developed our PartnerTrack service to lead the search and help select the right partners for their business.

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New Year, new rules for UK importers

Welcome to our first Expert Exporter Newsletter of 2022. Just a month into the year, and what a busy month it has been. Full of new rules for importers into the UK. 

1st January saw a number of new challenges for any UK or International company looking to import goods into the country. To help clarify the changes we have produced a FREE 7 KEY CHALLENGES TO TRADE POST-BREXIT download, which covers in detail the areas you need to be aware of and to plan for.

We are also presenting a series of Webinars for The Cabinet Office and Enterprise Nation explaining the changes which you may find useful.

HS Code

Everything starts with the HS Code which defines your product for customs and determines duty rates, licences, approvals, procedures etc. Following a review by the World Customs Organisation some HS codes have been changed, so check yours now to make sure it is still correct.

Customs Declarations

In 2021 importers to the UK could delay full customs declarations by up to 175 days. This easement no longer applies in 2022. Importers must therefore ensure they have the required information at hand to make a full customs declaration at the time of import. No declaration, no import!

Rules of Origin 

To claim preferential rates of duty under the UK-EU Trade & Cooperation Agreement it is now necessary to hold supporting evidence of the true origin of your products. This means documents such as a Suppliers Declaration. Without evidence, duty may well be applied and could even be backdated.

Pre-Notification of Imports 

Animal or plant products now need to be pre-registered on the new IPAFFS (Import of Products, Animal, Food, Feed System) IT system before entry into the UK. All required certificates & licences are needed. There are increased controls at ports and from 1st July special Border Control Posts will be used.

Goods Vehicle Movement Service (GVMS) 

Hauliers and businesses transporting their own goods through major ports need to register with GVMS and pre-register movements in/out of the UK to receive a Goods Movement Reference (GMR). No GMR, no crossing the border!!

VAT

The way VAT is accounted for on imports and exports is an important change post-Brexit and requires careful consideration. There are different rules for B2C and B2B which can affect supply chains and distribution methods. Ask for advice to find the best solution for your business. 

Incoterms 

Incoterms define who is responsible for what in an import/export transaction such as customs declarations, VAT, duties & freight costs. Agree terms carefully and understand the implications. Mistakes can be expensive and lead to unnecessary administrative burdens.

There is a lot more detail on each of the 7 challenges in our FREE download. We also offer a range of cost-effective support, from answering a single question through to a complete review to help implement the most efficient operating model for your business. 

With the right planning and support the challenges are surmountable and once conquered will open up a whole world of new opportunities for your business.

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