Selling into export markets

Occasionally you come a cross a business that reminds you of what it takes to be successful. Here was a export business that was selling process control instrumentation into a well defined global niche market.

Selling was done by a UK-based sales engineer who had intimate knowledge of his market place, and with a market-leading technology, the company had been able to price its products to make a handsome profit.

Support costs were low and the products were made entirely in the UK. What more could a government want – a tax-paying export-led business that created employment in the UK!

Many different ways of selling into export markets

However, for most businesses, growing an export business is not going to be quite that straightforward.

A product that someone wants; selling it to them; shipping it; getting paid; low aftercare costs; and making a profit –  in principle doing business overseas is the same as doing business at home, but it is certainly more complex, and it is the complexity that adds cost and increases business risk.

How you deal with overseas clients is key

But fundamentally it is how you access and deal with the overseas clients themselves that will determine the success or failure of your export venture, and that will depend on the territory, your product, its addressable market, your target sales volume, and the level of expertise required by sales personnel etc.

Export sales channels

Thus you will be faced with a number of options for each territory you decide to exploit. Here is a brief list of some of the alternatives:

  • e-commerce: mostly for low-value commodity sales supported by web-based marketing;
  • Telephone/fax/email: for sales of low-to-medium value commodities, services and configured products;
  • UK-based Sales executives: for items such as high-value engineering products, specialist niche products and software development contracts, sold through sales visits to clients’ premises;
  • Agents: commission-based lead generators and often sales representatives, usually for low-to medium volume, high-value goods into territories where the sales are significant;
  • Distributors / re-sellers: buy and re-sell your products, usually as part of a portfolio of related products into a specific market; and
  • Overseas offices: replacing distributors, agents or UK based sales executives, where setting up a local office either reduces the cost of selling into a territory and/or enables you to manage better important key accounts along with providing a base for installation and service personnel.

And as you grow your export business, you’ll probably end up with a mix of channels in different territories depending on local factors, whilst ensuring that each one is contributing to profit.

Posted by Peter Johnson, Business Advisor with SGBA. If you would to talk to someone about your business, or your export strategy, call Peter on 07714 093406 or email him at peter.johnson@sgba.co.uk.