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How can I effectively establish international distribution channels in a niche market ? I want to take my business to the next level and would appreciate a mentor's experience!

I have built my brand over the last year and a half and would like to expand. I am great at direct sales but I lack experience to expand my business. I have a clear vision but don't know how to get there. Navigating different customs regulations I have learned by making mistakes, and is more of a challenge now with the Covid-19 regulations and the various EU embargos in effect. I would love any advice!

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2 answers

Key to your success will be the development of links to buyers or sources in other nations. You may have gotten the idea that it is a simple and perhaps easy enterprise to get into and successfully perform. It is not in my experience any such thing. Companies who are successful evolve contacts and product relationships in foreign countries that take careful and businesslike approaches.

You will find yourself exporting from your country by importing other countries. There are laws and processes that apply in both domains governing taxes, duties and the import/export process.

It is recommend that you research thoroughly the answers to the following questions:

(a) What are the distribution channels that currently exist?

(b) Who buys your product in countries you intend to sell to. Do you plan to do market research on the potential demand for your product ? My advice is that you should. I further advise that you research practical marketing, sales and distribution channels

(c) What are the laws and regulations regarding the movement of equipment and supplies? How are they taxed in your country and how are they taxed in foreign countries? Are they regulated by law in foreign countries? Are licenses ?

(d) What service can you perform in (a)-(c) above? What value can you add to the process? Do you have special channels to a customer ? Do you have special knowledge or do you know others with special knowledge which you could involve in creating or designing a niche no one else is filling or offer these items at a price attractive enough to generate volume and profit for your business and beat the competition.

(e) Who is your competition and how are they performing (a)-(d) above? Your business involves offering the service of importing equipment and supplies to fill the need in the US from sources out of the country and the other way around. You must develop an available niche that other companies do not fill, either by having lower prices, more and better sources, or a low overhead cost for handling the business; faster delivery, better product warranty, parts service and replacement, all play in the equation. Your market plan must address the quality of their product and how well they support their product in countries other than their own.

Carefully review Freight Forwarder terms and conditions and assess the liability arrangements in the event of product theft or loss for goods coming in from overseas. A freight forwarder is your paid agent to safeguard your property. He is also registered to handle clearing customs. Certain other FF specialize in dealing with foreign countries. He is normally the individual through whom you ship product to foreign countries.

The expenses associated with the above should be included in your business plan and in your product pricing prior to going to market.

Be wary of networks and exchange sites on the web that offer to make you rich and handle all the arrangements. This is seldom the case.

Finally your business plan will be your best long -term asset in establishing your credibility with the banking community and with prospective investors. My advice is to start small and slow, with minimal personal investment and begin dealing in products only after you have a well developed business plan and market research indicates they will be profitable. As the business establishes itself, a demonstrated cash flow and projected earnings statement can be used as leverage with a good business plan to achieve a small business loan. Small business credit cards are a possibility if you can work the interest rates into your planned expenses and recover them in your product pricing.

Your planned banking arrangements should involve setting up accounts that involve automatic currency conversion features in the countries you plan to do business in.

I recommend being careful not to make your inventory a burden. Carrying excessive financed inventory without associated sales to pay the bills is one of the biggest traps you can fall into. Also remember many products have a shelf life which must be considered in the storage environment.

Report Kenneth's answer

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Thank you for your detailed answer ! I am going over each of your points carefully. I do see where my thinking is flawed. I appreciate your response.

Report Beth's answer

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