STEP 4.2

Building your export network

Business to Business

Who are you planning to sell to in your market of interest? Other businesses or purchasing costumers?

As is the case here in Canada, selling to businesses that wish to use or sell your products to customers requires a much different strategy than selling directly to consumers.

For business-to-business export sales, going through indirect channels certainly has its benefits. Distributors, who sell your products to businesses, and agents, who forge contracts with retailers and wholesalers, can be valuable allies. Conduits of this nature can be particularly helpful in markets where English is not widely spoken,* or where cultural difference can make selling directly to other businesses a challenging and risky proposition.

With that being said, it is crucially important to do your research before you commit to an agent or distributor, as there are varying degrees of quality service and reliability in every market.

Peter Biro is the CEO of Newcon Optik, a firm that sells military-grade laser technology to the world’s militaries. Newcon’s revenues are purely from exporting, and Biro, as a seasoned international salesperson, knows the value of high quality representation.

“The most important thing you can do in any territory is to cultivate high quality representation in those markets,” Biro said. “That’s the lens through which you’re going to view those markets and gather intelligence and it’s the key to building your market and promoting yourself with the powers that be in that market.”

Biro says trade shows are great places to meet potential sales representatives, but a quick Google search can also be fruitful.

Talented individuals who can represent your product in a market they know well can remove a lot of the headache and legwork that comes with trying to drum up sales. Employing outside sales help will cut into your bottom line, but if these individuals reward you with access to accounts and customers you would have never been able to land on your own, then it’s worth it.

With that being said, be careful. It is crucially important to do your research before you commit to an agent or distributor, as there are varying degrees of quality service and reliability in every market.

“It’s really easy to get a rep. It’s really really hard to get a good rep, and build a relationship of trust with that rep, flowing in both direction. The really good ones are few and far between in each country. It’s not too hard to find people who will represent you. But you’ve got to vet these people, mobilize your trade commissioner, the Canadian mission, there’s a lot of different ways you do your homework. You want reps to be able to get the attention of decision makers,” said Biro.

So sales reps are a good investment, but not just any will do. As with everything else when planning your market entry strategy, research, research, research.

If you do decide to cultivate sales yourself, you will need to establish connections:

  • Existing Canadian customers, clients or partners may have connections or direct affiliates in the country you are trying to do business in.
  • The TCS and EDC run a matchmaking service together for exporters. Take advantage of it.
    • The TCS can also help you make connections in less structured ways.
  • Attend trade shows. Setting up a booth to promote your product is a time-consuming and expensive undertaking, but even attending the show as a spectator, you can meet potential clients.
  • Get in contact with the local chamber of commerce or trade organization in the market you want to break into. They can introduce you to the major players.
  • Take out an ad in a local industry paper in the market. It will cultivate interest in your products and might result in some phone calls or emails.

*If you are going it alone in a market where English is limited, hire a translator. Potential business clients will bring translators to negotiations, but these individuals won’t have your best interests at heart.

Business to Customer

There are two basic ways to sell directly to customers in a new market, brick and mortor stores or e-commerce. Figuring out which method works for your business and export plan is a matter of what is feasible, affordable, and the optimum way to make money within the parameters of your business and your strategy.

More information on e-commerce can be found in section 4.4.

International Retail

With respect to brick and mortar retail, setting up shop in a new market is a tough proposition. Retail spaces in most markets are dominated by local players, or international players with long, entrenched roots in the market. These retailers have earned the loyalty of local customers through years of patronage, and to disrupt those relationships and supplant your brand in a new market is no small task. However, it is possible.

Building a customer base for your brick and mortar retail venture usually requires a unique value proposition. Offering original products, a unique shopping or service experience, or under-cutting your rivals on price are great ways to carve out a niche for yourself in a new market. Another way to garner loyalty is to advertise the use of local suppliers (if applicable), as this can provide customers with a sense of familiarity.

Rebranding under a new name unique to the market can also build trust with potential customers, who could come to see you as a local retailer instead of a foreign one. The same effect can also be achieved by partnering with or acquiring a local brand to gain a foothold in the market. A retail partnership or acquisition can also provide your firm with operational resources, capital or local connections it may have otherwise not had access to.

This piece from the Harvard Business Review touches on some of the aforementioned concepts. While it was written in 2012 and many of the case studies cited are dated, the principals laid out are still valid.


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