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When Dan Perkins first got an order from a customer in Tokyo, he had some doubts. “I had no idea how much it was going to cost to ship, how to ship or whether the customer would really pay,” recalls the owner of Couch Guitar Straps in Signal Hill, Calif.
That was in 2004. Today, international sales account for 30 to 40 percent of the six-figure annual revenues at Couch, which sells vegan guitar straps—and that percentage is growing. With just four part-time employees, the company Perkins launched in his garage 10 years ago is proof that even the smallest business can take advantage of expanding opportunities in global trade.
The Time Is Right
What makes now such a good time to buy or sell products overseas? First, with the U.S. economy hurting, sales to international customers can soften the blow. “It gives us a hedge on the U.S. economy,” Perkins says. “It’s nice to know we’re not just depending on the United States for our business.” And sourcing products from overseas can lower your operating costs substantially, making your company more competitive.
Second, the Internet has exponentially increased the ease of working with international customers and suppliers. “Technology erases boundaries and makes it convenient to conduct business globally,” says Laurel Delaney, president of GlobeTrade, a management consulting and marketing solutions company in Chicago that helps entrepreneurs go global.
Last, but not least, the U.S. government is making a strong push to boost exporting, particularly by small to midsized businesses, by providing more resources and expertise, and making financing more available.
There’s never been a better time to go global, says Delaney: “You have nothing to lose, and everything to gain.”
Steps to Selling
Want to sell your products internationally? The first step is determining the right market. Delaney suggests these Web sites as good resources:
Look for a country that not only has high demand for your product, but is easy to work with. English-speaking countries, such as the U.K., Ireland, New Zealand and Australia, are easy to do business with in terms of language, shipping and payment, Delaney says.
One way to keep things simple is by selling online. For Couch, global e-commerce happened naturally, as international consumers discovered the site. “If you have something that is truly [unique],” says Perkins, “having a Web site flattens the globe.”
Good search-engine optimization is essential for anyone selling online. “SEO is like the new Yellow Pages,” Perkins says. “If you can get listed high in search results, you’re in the world’s phone book.”
Once your site is optimized for search engines, “market, market, market via every imaginable platform—blogs, Facebook, YouTube, Twitter and LinkedIn,” Delaney says. “Keep a conversation going worldwide on what’s so great about your company.”
That strategy worked for Couch. The company’s Web site, blog and e-mail newsletters emphasize that the products are made in the United States and highlight well-known musicians who have purchased the straps—including Beck, The White Stripes and Keith Urban. Perkins believes authenticity and personal relationships with customers are essential, so Couch sends personalized responses to orders and includes handwritten thank-you notes in every package. As satisfied customers blog about the products (and the customer service), word has spread worldwide.
While Couch lets international e-commerce grow organically, you can also target your strategy. “If you know you want to sell in Brazil, for example, then make that clear on your site: Brazil opportunities, click here—and hopefully have that page translated in Portuguese,” Delaney says. “A small, recognizable icon, such as a country’s flag, helps enormously for visitors in determining where business gets conducted.” You’ve made the sale; now how do you ship? If you’re shipping a big order to a distributor, you may want to hire a broker or freight forwarder to handle shipping and customs issues. If you’re selling direct to customers, like Couch does, FedEx, UPS or the U.S. Postal Service (USPS) are options. Because Couch wants to keep customer costs low, Perkins uses USPS plus Endicia postal software (Endicia.com). “Even if you’re starting small, if you want to do it well, set up that type of program to ship,” Perkins recommends. “You’ll be that much more organized and efficient, and won’t spend time standing in line at the post office.”
Whether selling directly to consumers or to distributors, how do you ensure you’ll get paid? For smaller transactions (under $5,000), Delaney suggests payment methods such as PayPal. For larger transactions, use references, trade associations and your bank’s international trade department to assess a new distributor’s reputation. “Use the resources backed by our tax dollars, such as the U.S. consulate or U.S. embassy in that country,” Delaney advises.
Communication is key, she adds: “You have to find out how much you can trust each other and what you can expect of each party.” Once you’re comfortable with the distributor, you may be able to ask for partial payment before you ship the product, or even get a down payment to finance making the product.
Sales to distributors are not high-priority for Couch, whose business model is to eliminate the middleman. But when distributors in Tokyo, Austria and Germany found the company, Perkins built relationships gradually: “Just like in the United States, we start someone out with a small order and see how it goes.”
Today, Couch guitar straps are sold direct to consumers worldwide and in approximately 70 stores in the United States and overseas; the company is also launching a line of vegan camera straps, belts and wallets.
Steps to Sourcing
Looking to source products overseas? The Federation of International Trade Associations (FITA.org) is a good place to begin your search. You can also get help from your state’s Commerce Department, the U.S. Commercial Service Products and Services (Trade.gov) and Export.gov’s Gold Key Matching Service (export.gov/salesandmarketing/eg_main_018195.asp).
Attending an international trade show is a smart way to get started. At trade shows, you’ll find products, manufacturers and brokers to help you with the complexities of international sourcing.
Adam Rizza took the trade-show route when he began seeking overseas sunglasses suppliers. He and his brother, Wally, began retailing sunglasses at kiosks in 1995; by 1999, their Irvine, Calif., company had 25 locations. But the product available in the United States “wasn’t cool enough,” he recalls. Rizza attended a trade show in Hong Kong, found brokers, and the brothers began importing.
Sourcing overseas revolutionized the Rizzas’ business model. Today, their business is primarily wholesale. Sunscape Eyewear Inc. (of which Adam is president and CEO), imports and distributes sunglasses, readers and opticals to 1,500 boutiques and 32 major retailers worldwide. Their retail business, Rizza & Associates (of which Wally is president and CEO), has four southern California kiosks they use as testing grounds to see what products sell.
“There are all these myths about [overseas] factories,” Adam says. “That’s why we went with brokers at first—you pay a little bit more, but they manage it for you and guarantee you’ll get the product.” By 2000, however, the Rizzas were ready to start dealing direct. “Through the brokers, we found factories and slowly began communicating with them,” Adam says.
While some preliminary communication can be done via e-mail and phone, when sourcing overseas, Adam cautions, “That face-to-face meeting is priceless. Anybody can tell you they have a million-square-foot factory and send you someone else’s pictures—and, unfortunately, a lot of people do that.”
Meeting in person is essential to assessing a company’s trustworthiness. “You don’t go to China and spend a day at the factory; you spend a couple weeks,” Adam says. “You’re living with them, seeing their day-to-day operations and understanding what they’re about. When you meet the right people, you’ll feel that comfort zone.” Of course, you should also do your due diligence, just as you would with an overseas distributor.
As you get quotes from potential suppliers, assess the bottom line. “Bringing something from overseas is very expensive transportation-wise,” Delaney says. “What are you trying to accomplish [by importing]? Is the net result going to be a cost savings?” For importing to be worthwhile, you typically need to be doing a large volume of business or getting a product you can’t get anywhere else. Adam Rizza, for example, uses Chinese factories to produce his own eyewear designs more cheaply than he could in the United States.
Also analyze the demand for the product locally and know how you plan to sell it. “Have an axis of distribution before you buy anything,” Adam Rizza warns. “You don’t want to get stuck with products—that’s how companies go belly-up.”
To manage the logistics of importing, including shipping, payment and customs, most businesses hire a freight forwarder. “Look for one that is well-versed in the region where you’re doing business,” Delaney says. Depending on the scale of your importing, she says, UPS and FedEx can serve as excellent freight forwarders.
Entering international markets can seem overwhelming at first, but if you do your homework, take advantage of the many resources available and start small, it can spur your business to heights you never imagined.
“It’s like getting the first olive out of the jar, and then the rest just tumble out,” Delaney says. “Once you get that first [international] market or first customer, you’ll want to do more of the same.”
Rieva Lesonsky is president and founder of GrowBiz Media, a content and consulting
company that helps entrepreneurs start and grow their businesses. She’s the author of several books, including her latest,
Marketing 101: Quick Tips for Marketing Your Business.