Market and sell overseas

Selling your product or service overseas is a demanding undertaking. You need to treat your overseas markets with as much care and attention as you do your home market. And each territory will have its own distinct sales and marketing challenges that you must address.

Choosing the most effective sales channel is a key decision for any business that exports. Whether selling directly, using agents or distributors, setting up a joint venture or striking a licensing deal, you need to think carefully about the advantages and disadvantages. Once the decision is made, you'll need to clarify your strategy with overseas partners, set targets and measure progress. Clear legal agreements are strongly recommended to protect everybody's interests.

At the same time, you will need to understand the local market and work with different customs and cultures. You may need to adapt your product to meet local requirements, and develop new promotional methods and messages. Simply fulfilling orders and providing quality customer service is likely to involve extra complications. But the right approachwill help you develop a whole new customer base, often with exciting growth prospects.

1 Plan your strategy

1.1 Base your decisions on the best possible information.

Investigate customers and their requirements, and what your competition is offering.

Find out what regulations you need to comply with.

1.2 Ensure that you understand the practical implications of trading overseas.

Consider how you will organise transport and other logistics, and whether you will use a freight forwarder to handle this for you.

Assess the impact of different payment methods and terms on your cashflow, and the risk of non-payment.

1.3 Set clear objectives.

Include targets that allow you to benchmark your progress. For example, sales volume or number of new customers.

1.4 Plan how to achieve your objectives.

Decide how you will distribute your product (see section 2).

Plan your promotional and sales activities (see section 4).

1.5 Involve overseas business partners.

If you work with agents, distributors, joint-venture partners or licensees, it's important to get them involved in forming your strategy and objectives. They will have a deeper knowledge of the local market.

Make sure that they understand your strategy and how you want to achieve it.

2 Select your sales channels

2.1 Consider selling direct.

You may be able to sell directly from the UK, for example through your website.

You could establish a local office to deal with sales, marketing, distribution and customer service in your target market. This will require significant up-front investment.

Selling direct gives you control all aspects of your sales and marketing. You will need in-depth market knowledge and local business contacts, and may face language and cultural barriers.

2.2 Consider using a distributor.

A distributor will usually buy from you and then be responsible for selling your product to their customers.

Using a distributor can provide the fastest route into your new market. However, you lose direct control of your sales, marketing and customer service.

Try to find a distributor that has experience of selling your type of product, an established customer base and a good reputation.

2.3 Consider using an agent.

An agent will act as your business' representative in the target market, selling and handling customer service on your behalf.

Using an agent is usually the lowest-cost route into a new market. You generally only pay commission on sales the agent makes.

You will usually have to invest in marketing support for the agent.

2.4 Consider a joint venture or licensing arrangement.

Creating a joint venture or licensing partnership will allow a local business to market and sell your product or service in the target market. An arrangement like this can include allowing your partner to manufacture your product locally.

You share the risk with your partner and have some degree of control over how your interests are served in your target market.

You will have to spend significant amounts of time choosing the right partner and reaching a detailed agreement to protect your interests.

3 Manage relationships with overseas partners

3.1 Make sure you have clear agreements with any business partners.

Agree what you want them to do. For example, you might want them to provide an agreed standard of customer service, as well as simply selling your products.

Agree any restrictions. For example, if they are limited to selling within a particular territory, or must promote your product in a way you specify.

Agree their rights. For example, as part of an exclusive distribution agreement.

Agree how long the agreement will last and how it can be terminated, including any compensation for termination.

3.2 Take legal advice on the key issues.

Key issues can include your potential liability if things go wrong, and ownership of intellectual property (such as brand names).

Terminating a relationship can be problematic. For example, within the EU a self-employed agent is likely to be entitled to significant compensation.

An experienced lawyer will know what needs to be addressed.

Draw up a written contract to protect both your interests.

3.3 Build the relationship.

Keep a regular dialogue with your overseas partners. Even if it is just a monthly call to find out about trading performance, it will help you to keep in touch with market developments.

It's a good idea to regularly ask about current market conditions, competitor activity and any feedback from customers and potential customers.

Check whether your business partner has any questions for you.

Regularly monitor their performance against your benchmarks. Look for the causes of any problems, and for opportunities to further grow sales together.

4 Promote and sell

4.1 Make sure you understand the local market.

Your marketing and promotion must reflect the preferences, buying habits and cultural influences of your customers in each market you sell to.

Local product requirements may be very different.

Bear in mind that business behaviour may be different overseas. For example, business people in France are often more formal than in the UK.

4.2 Decide how you can promote effectively.

Research the most effective options for reaching your target customers. Consider options such as joining a trade mission or attending an overseas exhibition.

Tailor your marketing message to suit the local market. Local customers may see your product quite differently from how it is perceived in the UK.

Think about how you will build your image. Overseas customers might see you as exotic - or untrustworthy.

Make sure you comply with any local laws. For example, prohibiting advertising to minors.

4.3 Overcome any language barrier.

If the local language isn't English, make sure you have someone who can speak the language fluently.

Even where customers can speak English, they appreciate it if you make an effort. Try to learn at least a few key phrases.

Take care to ensure that any promotional literature you produce is professionally translated to avoid any embarrassing mistakes. If you have local agents, distributors or licensees, involve them closely when preparing marketing materials.

4.4 Keep up to date with market trends.

5 Provide good service

5.1 Make sure you have a robust system for order fulfilment.

Make it easy for customers to order. For example, through your local agent or your website.

Set goals for order turnaround based on customer requirements.

Organise effective logistics.

Consider ways to reduce lead times: for example, by warehousing stock locally. Monitor stock levels and anticipate demand.

5.2 Offer good after-sales service.

Make sure that customers can speak with somebody who has authority to make things happen when problems occur. Ideally, this should be in the local market.

Plan in advance how you will deal with delayed or incorrect shipments. Bear in mind that returns and replacement shipments may involve significant costs and delays.

5.3 Build customer loyalty.

If you sell through intermediaries, think about whether you need to have direct contact with the ultimate customers as well.

Regular visits can be a key part of building relationships, as well as helping you assess local market conditions.

6 Use sources of help

6.1 Use UK Trade & Investment's resources.

The government-backed UK Trade & Investment offers businesses a variety of practical support for selling and marketing overseas.

6.2

 

6.3 Check what help other business support organisations can provide.

The British Chambers of Commerce offers a range of support services for exporters.

Your local chamber of commerce may run an export club or offer training events to help you market and sell overseas more effectively.

Your trade association may offer tailored export market reports and organise trade missions.

Some local authorities offer financial support to businesses in their area which want to start exporting.

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