Deciding how to get your products into the hands of customers and end users or provide customers with the service you offer is one of the most difficult decisions facing an exporter.
The route you choose depends not just on the size of your firm, available cash flow, number of employees and international experience, but what direction you want to take your business in. Selling through distributors or agents can remove a lot of the legwork of breaking into a new market, and selling online can provide a much cheaper alternative to reaching customers through brick and mortar shops.
However, these methods lack the personal touch of setting up physical shops, offices and factories in your target market. If you want your reputation in the market to transcend the quality of your products, then you need to establish locally based operations that are beneficial not just to your bottom line but local communities as well; operations which create jobs for locals and give back to communities financially, culturally, and environmentally. Setting up local operations and establishing a good corporate social responsibility program go hand-in-hand, and such an undertaking requires a lot of time, and copious financial and human resources. But the results can do wonders for your brand.
With all this being said, not every firm possesses the resources to set up shop on the ground, or they simply would rather allocate resources elsewhere. In these cases, selling goods through intermediaries or selling online are more efficient and inexpensive methods to achieve the same sales without the manpower and capital investment. After all, building in a new market is incredibly rewarding, but it’s also risky. For a lot of businesses, minimizing not only inefficiencies and expenses but insulting their operations from risk, is the chief priority. With this in mind, you need to decide which direction is the best way to go, not just based on the resources you have at hand but based on where you want to take your business.
More information on third party channels like distributors, agents and trading houses can be found in section 4.1.
The benefits of e-commerce are fleshed out in section 4.4.
Find out about business-to-business sales in section 4.2.
For information on partnering with local firms, check out sections 5.1.1 and 5.1.2.
Details on after-sales support can be found in section 5.4, and the basics of shipping your goods to market are in sections 5.1.3 and 5.1.4.
Building or Buying International Operations
Setting up manufacturing or sales operations in a foreign country can eliminate the need for costly and time-consuming shipping routes, making your supply chain simpler and more efficient. It can also help you forge fruitful connections with all of the important government and business players in your market. But most importantly, it can help you understand and connect with your customers better.
Setting up operations in a foreign country is not without its challenges. There are often language and cultural barriers, finding local business partners can be tough, and often financing can be difficult to secure.
Once you get the ball rolling, dealing with local bureaucracies, managing a local workforce and keeping your partners happy are also challenging.
For some helpful tips on how to establish brick and mortar operations in a new market and how to build those operations into worthwhile investments, check out this EDC Whitepaper. EDC also has advice on what you need to consider before setting your expansion plans in motion.