Top tips for expanding overseas, as told by the experts
Figure out your ‘why?’
Many companies are faced with the obstacle of needing to stand out in a saturated market. Taking insight from Sarah Hamilton, co-founder and CEO of Sand & Sky, having a purposeful and consistent brand proposition from the outset is core to your business, but even more so when you go global.
There are three questions that Sarah suggests businesses constantly ask themselves to ensure they have a unified global brand; “What is your brand story? Why do we care about it? And why should others?”
Cynthia Dearin from Dearin & Associates points out small businesses can also be particularly vulnerable to launching in new markets before they are ready. To avoid this, she stresses the importance of getting clarity on your reason for going overseas; Is it to help decrease production costs? Will it give you a base closer to a key market? Do you want to take advantage of favourable market conditions?
The rise of technology has made the logistics of expanding a small business internationally much more accessible. However, this also means that businesses not only have to consider the local context, but digital contexts as well.
Sand & Sky and the umbrella brand Supernova are the epitome of a modern company; an e-commerce business focusing on real-time results, complemented by a flexible model.
“We were all about how we make e-commerce profitable. For Supernova, we ensured we’re profitable from first purchase and if a market is not doing well, we’d just pull it out. But everything was done online, so we had the flexibility to do that”, explains Sarah.
“We monitor results in real-time and have estimates on where our sales are going to end for that day in real-time. At the end of the day if a market is not profitable, we won’t continue to put advertising in it.”
Using a distributor vs. going direct to retail
There is no right or wrong way to enter new markets, and your network and business model will ultimately influence how you choose to distribute your product. One option would be to work through a distributor. Skander recommends connecting with the various international Chambers of Commerce, which helps businesses connect with local trusted people, is a great first step to building a network. Once you’ve sourced a distributor, asking them for a list of their recommended distributors may also help you expand your network further.
Cynthia advises it’s also important to exercise some judgment when you’re doing your research and go in with a wish list of what you want from a distributor. For example, if you’re selling bags there might not be as much requirement for specialist knowledge, compared to someone selling a healthcare product.
On the other hand, scaling through the direct-to-retail approach is another popular means to go global. Despite having 34 retail relationships to manage and five warehouses in key markets globally, Sarah credits the success of her business to owning the relationship. In fact, Sarah claims if you have the opportunity and capacity, there is no better alternative than going direct.
“You get to know the market better, you’re not handing over your product to someone else and you can take the distributor margin out of your profit.”
“We won’t say yes to all retailers. It’s always top of mind that we’re owning that customer relationship. Retail to us is a new marketing channel, so if the retailers just rely on our audience then we’ve done a bad job at our relationship. If they expand us to new audiences, then we have a good partnership.”
About the OFX Go Global Workshop
At OFX we’re passionate about helping businesses grow in a global world, and we recently ran our annual Go Global Workshop to support two small business in their expansion journey. A panel of experienced business experts coached Nutrition Innovation Group, a business hoping to solve a larger health issue with their low GI, unrefined sugar; and Prene Bags; a women’s accessories label grown through the power of social media, to help them get their focus right.
Keep an eye out for the next iteration of the Go Global Workshop.