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Exporting is vital for many businesses, especially if your home market is small or ultra-competitive. But do you know if you are making the most of your international business? Here are five questions that can help you optimize your exports.
1. Are you in the right countries?
Countries all have different levels of development. Depending on their purchasing power, people can afford certain goods and services. Up to $ 5,000 of GDP per capita, the bulk of expenditure is devoted to food and basic necessities. From $ 6,000, the capital goods market opens up and then, from $ 20,000, people start to turn to cultural goods and recreation. And from a certain point, the functionality of the product is not enough, the design and the brand image come into play.
The choice of a country starts with knowing the “drivers” of the market. This can be purchasing power, the aging of the population, the rate of Internet access, urbanization or others. Looking at statistical data with a different eye can reveal unsuspected opportunities, or deter you from giving in to mirages.
2. Do you know the market potential?
Do you know the real potential of each market where you are present? Of course, you can buy and view reports for your product category. But what do they tell you about your market segment? Do you know how your competition is doing?
Analyzing the potential of the market and its evolution is essential to decide to continue your investments in a country or to target a new one. Your Area Sales Manager’s quarterly report should include a local market share indicator. And this indicator cannot exist if you don’t know the size of your potential market.
3. Are your distributors or agents sufficiently active?
Of course, you are happy with the turnover generated by your agents and distributors, but could it be more important? Some markets may be more difficult than others, but sales performance ultimately depends on the efforts of your local partners. How much time and money do they spend promoting your products or services? Are they motivated to develop your activities and increase their market share?
You will only get a clear answer to these questions in an open conversation with someone they trust. If this is not the case with you or your Export Manager, then it may be useful to hire the services of a local distribution expert. He will know how to distinguish the real problems from the false excuses to redefine and implement a new approach to growth with your partner.
4. Do other distribution channels offer higher margins?
You may think that your contracts with your agents or distributors do not allow this. This may be the case today, but check it out. And yet, it is still useful to explore new possibilities. Eventually, you may be able to change channels or find an arrangement with your current distributor.
Online sales can in particular be a great lever for developing tailor-made, personalized products or including options. When these products are ordered, your production unit or logistics base can integrate this process, which adds value to your product. And the points of sale served by your distributor can become collection points, which increases their footfall.
5. Do your Export Managers still travel around the world?
If you export to many countries, your Export Manager (s) travel a lot. Sharing your time between several countries is inevitable since these countries cannot economically support the burden of a dedicated Manager. However, this has two major drawbacks:
- Export Managers spend up to 30% of their time traveling, which, added to travel costs, makes them extremely expensive employees.
- An Export Manager will never master the culture of each of the countries he covers and his presence is always intermittent, which severely limits his commercial efficiency.
The alternative solution is to work with local Country Managers on a time-share basis. With the increasing flexibility of work, this option is more and more widespread. A Country Manager will be as close as possible to the business at all times and will be able to visit the head office once or twice a year to meet your employees, create links and train.
Do you want to optimize your export process?
Alliance experts helps companies to export profitably. We have included this term in our motto because it is a primary objective for us. If there isn’t a business case for your export project, you shouldn’t go for it. And we want to help you look at your exports from a financial perspective. All you need to do is contact one of our experts near you.