Planning your route to market
You will learn
- Ideas for selling internationally online
- Pros and cons for using distributors
- Thoughts for opening an international shop
When you start exporting, you’ll need to take some time to consider what your route to market will be. You’ll have invested lots of time and effort to make that sale, so you’ll need to ensure that you can get your product from A to B safely and by your agreed deadline. Not picking the best route to market can have serious effects on your credibility as a business and your profit margins.
One way to reach overseas customers is through an eCommerce website. You’ll set yourself up as an online business and allow your international customers to buy from you through your website or eCommerce platform.
If you’re interested in selling online, take a look at our free eCommerce guide to help you get started.
- Since internet connections have improved and there are secure online options, customers now see this as a legitimate platform
- Selling online is getting much more popular because it is convenient and easy for your customers to access
- Can be quick and easy for customers to handle and it allows your business to be open 24/7
- Your customer won’t have to travel to access your product, it’ll just get delivered to their door
- There are a lot of online shops available, so the problem will be ensuring people are aware of your brand. It may take some focused marketing to get yourself on people’s radars
- Some customers may be deterred from buying goods that they can’t feel or try before purchase
- Some people are afraid to buy online for fear of fraud. So, you might have to consider who your target audience is and if this platform is relevant for them. For example, some older generations may be reluctant to rely on technology
- You have the potential to get customers from anywhere around the world, so you’ll need to make sure your product will be able to clear customs at the UK border and theirs
Selling to Retailers
You might consider working with pre-established businesses in the area and ask them to sell your products in their stores. You’ll get the benefit of moving into a trusted brand and getting your product known to the customers in the area, and they’ll benefit as you’ll be adding value to what they can offer their customers.
- Selling your product to retailers such as a high street supermarkets will give your product high visibility and access to a wide audience
- Retailers will already have an established client base, so you’ll be able to target these, rather than focusing your energy on creating product awareness
- Less pressure compared to owning your own shop
- Retailers are in a powerful position and may not offer you a good price for your product
- With this option, you’ll be likely to operate on a small profit margin
- You will have to sell your product to retailers at a lower price compared to selling direct to customers via your website, as retailers will mark up the product price
Selling to wholesalers or distributors
Much like an existing retailer, distributors or wholesalers act as the middleman between you and your customer. However, they’re much bigger than retailers, so you’ll be able to sell more products in one go.
- An easy way to sell large volumes, as you’re providing products to one business, rather than transporting it to various locations across the country
- Distributors may already have an established customer base, which you’ll be able to sell into
- They should also have sales and marketing expertise, so they can take your products and promote them in the most effective ways
- You won’t need to find access to storage space, as your distributor should already have premises they use
- Selling price will be considerably lower than selling direct to a customer, or even to a retailer
- You’ll have no opportunity to build a personal relationship directly with your customers
- You may lose control of the way your product is marketed and priced, potentially damaging or erasing your individual business brand
Sales agents are useful if you have a niche product and you would like help selling it. Agents typically have a field of expertise and they have a portfolio of different products that they try and sell. They’ll have a good understanding of the target market in that country, and will be motivated to sell your product as you’ll be giving them commission each time they make a sale.
- Sales agents work on a commission basis, so they’ll be highly driven to sell your product
- They may already have an established client base, which you will be able to sell into
- This is a cheaper option, as you won’t have to spend time and resources on recruiting your own sales force
- Unlike selling via a website, the customer will be able to try the product
- You may have little control over how your product is described to your customers, which could lead to mis-branding by the sales agents
- You will still be responsible for shipping your product for them to sell
- You won’t have a direct relationship with your customers
Opening an international premises
If you’ve been selling online for a while and have been successful in one country, you might consider opening a shop there. Or, you can dive right in and open a shop in a new country based off your research of their market. Your customers will get that personal touch and will be able to experience your product before they commit to purchase. If this option appeals to you, you might also want to think about manufacturing there too, cutting out the need for export entirely.
- Personal interaction with customers can get you regular customers, but you will have to rely on your staff overseas to establish this connection
- Useful for products that your customers might want to see and touch before they buy, e.g. food
- Your shopping environment can be used to establish your brand values and encourage customers to browse, which could lead to further sales
- Could be costly, as you’ll have all the costs associated with running a premises
- This could be stressful to maintain if your market is overseas, as the distance may make it difficult to keep up to date with any issues
- Customer reach could be limited by geographical location and opening hours, which an online shop doesn’t face
By considering what you route to market will be when you start to export, you’ll be able to make sure you are reaching your target audience, securing profitable new customers, spending less but selling more, and building strong connections in a new market.