International trade is one of the hot
industries of the new millennium. But it's not new. Think Marco Polo. Think the
great caravans of the biblical age with their cargoes of silks and spices.
Think even further back to prehistoric man trading shells and salt with distant
tribes. Trade exists because one group or country has a supply of some
commodity or merchandise that is in demand by another. And as the world becomes
more and more technologically advanced, as we shift in subtle and not so subtle
ways toward one-world modes of thought, international trade becomes more and
more rewarding, both in terms of profit and personal satisfaction.
What's Inside
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Introduction
Importing is not just for those lone footloose
adventurer types who survive by their wits and the skin of their teeth. It's
big business these days--to the tune of an annual $1.2 trillion in goods,
according to the U.S. Department of Commerce. Exporting is just as big. In one
year alone, American companies exported $772 billion in merchandise to more
than 150 foreign countries. Everything from beverages to commodes--and a
staggering list of other products you might never imagine as global
merchandise--are fair game for the savvy trader. And these products are bought,
sold, represented and distributed somewhere in the world on a daily basis.
But the import/export field is not the sole
purview of the conglomerate corporate trader, according to the U.S. Department
of Commerce, the big guys make up only about 4 percent of all exporters. Which
means that the other 96 percent of exporters--the lion's share are small
outfits like yours wil be--when you're new, at least.
Champagne and Caviar
Why are imports such big business in the
United States and around the world? There are lots of reasons, but the three
main ones boil down to:
·
Availability: There are some things you just can't
grow or make in your home country. Bananas in Alaska, for example, mahogany
lumber in Maine, or Ball Park franks in France.
·
Cachet: A lot of things, like caviar and
champagne, pack more cachet, more of an "image," if they're imported
rather than home-grown. Think Scandinavian furniture, German beer, French
perfume, Egyptian cotton. Even when you can make it at home, it all seems
classier when it comes from distant shores.
·
Price: Some products are cheaper when brought
in from out of the country. Korean toys, Taiwanese electronics and Mexican
clothing, to rattle off a few, can often be manufactured or assembled in
foreign factories for far less money than if they were made on the domestic
front.
Aside from cachet items, countries typically
export goods and services that they can produce inexpensively and import those
that are produced more efficiently somewhere else. What makes one product less
expensive for a nation to manufacture than another? Two factors: resources and
technology. A country with extensive oil resources and the technology of a
refinery, for example, will export oil but may need to import clothing.
Types of Import/Export Businesses
First off, let's take a look at the players.
While you've got your importers and your exporters, there are many variations
on the main theme:
·
Export
management company (EMC): An
EMC handles export operations for a domestic company that wants to sell its
product overseas but doesn't know how (and perhaps doesn't want to know how).
The EMC does it all--hiring dealers, distributors and representatives; handling
advertising, marketing and promotions; overseeing marking and packaging;
arranging shipping; and sometimes arranging financing. In some cases, the EMC
even takes title to the goods, in essence becoming its own distributor. EMCs
usually specialize by product, foreign market or both, and--unless they've
taken title--are paid by commission, salary or retainer plus commission.
·
Export
trading company (ETC): While
an EMC has merchandise to sell and is using its energies to seek out buyers, an
ETC attacks the other side of the trading coin. It identifies what foreign
buyers want to spend their money on and then hunts down domestic sources
willing to export. An ETC sometimes takes title to the goods and sometimes
works on a commission basis.
·
Import/export
merchant: This
international entrepreneur is a sort of free agent. He has no specific client
base, and he doesn't specialize in any one industry or line of products.
Instead, he purchases goods directly from a domestic or foreign manufacturer
and then packs, ships and resells the goods on his own. This means, of course,
that unlike the EMC, he assumes all the risks (as well as all the profits).
Swimming the Trade Channel
Now that you're familiar with the players,
you'll need to take a swim in the trade channel, the means by which the merchandise
travels from manufacturer to end user. A manufacturer who uses a middleman who
resells to the consumer is paddling around in a three-level channel of
distribution. The middleman can be a merchant who purchases the goods and then
resells them, or he can be an agent who acts as a broker but doesn't take title
to the stuff.
Who your fellow swimmers are will depend on
how you configure your trade channel, but they could include any of the
following:
·
Manufacturer's
representative: a salesperson
who specializes in a type of product or line of complementary products; for
example, home electronics: televisions, radios, CD players and sound systems.
He often provides additional product assistance, such as warehousing and
technical service.
·
Distributor
or wholesale distributor: a
company that buys the product you've imported and sells it to a retailer or
other agent for further distribution until it gets to the end user
·
Representative: a savvy salesperson who pitches your
product to wholesale or retail buyers, then passes the sale on to you; differs
from a manufacturer's representative in that he doesn't necessarily specialize
in a particular product or group of products
·
Retailer: the tail end of the trade channel where
the merchandise smacks into the consumer; as yet another variation on a theme,
if the end user is not Joan Q. Public but an original equipment manufacturer
(OEM), then you don't need to worry about the retailer because the OEM becomes
your end of the line. (Think Dell Computer purchasing a software program to
pass along to its personal computer buyer as part of the goodie package.)
The Right Stuff
Not everybody is cut out to be an
international trader. This is not, for example, a career for the sales-phobic.
If you're one of those people who would rather work on a chain gang than sell
Girl Scout cookies, or if you blanch at the thought of making a sales pitch,
then you don't want to be in import/export. This is also not a career for the
organizationally challenged. If you're one of those let-the-devil-handle-the-details
types whose idea of follow-up is waiting to see what happens next, you should
think twice about international trading.
If, on the other hand, you're an enthusiastic
salesperson, a dynamo at tracking things like invoices and shipping receipts,
and your idea of heaven is seeing where new ideas and new products will take
you, and if, to top it off, you love the excitement of dealing with people from
different cultures, then this is the career for you.
It also helps if you already have a background
in import/export. Most of the traders we talked with were well-versed in the
industry before launching their own businesses. Peter P., who founded a Russian
trading company, segued directly from his college major in international
business to an operations position with an international frozen-meat trading
company in Atlanta, which landed him in the right place at the right time.
"I speak both Russian and Ukrainian
fluently," Peter says. "I'm of Ukrainian descent. I took Russian as a
minor in college, initially as an easy grade. Little did I know when I
graduated back in '89 that Russia would open up to the West shortly
thereafter."
The Trade Hit Parade
According to the U.S. Census Bureau, the top
10 countries with which America trades (in order of largest import and export
dollars to smallest) are:
·
Canada
·
Mexico
·
Japan
·
China
·
Germany
·
United Kingdom
·
France
·
Republic of Korea
(South Korea)
·
Taiwan
·
Singapore
You needn't, of course, confine yourself to
trade deals with importers and exporters in these countries--there are scads of
other intriguing possibilities available, including the member countries of the
Caribbean Basin and Andean pacts and the new kids on the Eastern Bloc, the
former Soviet Union countries. But as a newbie on the international scene, you
should familiarize yourself with our biggest trading partners and see what they
have to offer. Then take your best shot, with them or with another country.
Target Market
Every business needs consumers for its
products and services to, as the Vulcans so eloquently put it, live long and
prosper. Now that you know what running an import/export business entails, you
need to plan, or target, your market, and determine who your potential clients
will be, which geographic areas you'll draw from, and what specific products or
services you'll offer to draw them in.
This is a very important phase in the
mega-trader building project. The proper market research can help boost your
trading company into a true profit center, and the more research you do, the
better prepared you are before you officially open your doors, the less
floundering you're likely to do.
Who Are Your Customers?
Any manufacturer, supplier, crafter, artisan,
importer, exporter or retailer is fair game. You can go after companies that
deal in heavy construction equipment or delicate jewelry, gourmet goodies or
pet food, telecommunications or toys. The only essential requirement is that
they want to sell their merchandise or buy someone else's.
What's Inside
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Target
Market
This doesn't mean, however, that your best
technique is standing at manufacturers' gates, tripping them as they walk to
their cars after work each evening. Targeting by definition means homing in on
a specific group.
If you have previous experience in a particular
field, for example, you should seriously consider targeting that market first.
You'll feel comfortable with the jargon and procedures so your sales pitch--and
your initial sales--will go smoother and easier. As an added bonus, you may
already have contacts in the field who can either become your first clients or
steer you to colleagues in that area.
Dan S. targeted the field of
technology--specifically, software solutions for commercial use and computer
cables--simply because he's worked in that area for more than 10 years. He
knows the field and feels comfortable in it.
Wahib W., too, began in a field he knew well,
runway and navigational lights, then went on to other international
construction projects, importing railroad and telephone pole materials and
construction services, as well as other heavy-equipment materials.
What's My Niche?
OK. You've narrowed the list of products
you'll target. Now you'll want to find your niche, the unique angle that will
set your business apart from--and above--the competition. This is where you can
really let your creativity shine through.
You may decide to start as an export
management company (EMC, remember?), seeking out buyers for domestic
manufacturing firms, or as an export trading company (ETC), finding domestic
sources willing to export. Or you might want to stick with the original Trader
Sam formula, importing and exporting on your own as an import/export merchant.
In Florida, Lloyd D. has positioned his
company as both an EMC and ETC, depending on his clients' needs. "[As an
EMC, we] work directly for a manufacturer, or his exclusive distributor/manager
for international sales, as a marketing and screening provider," Lloyd
explains, "and will search for and locate overseas buyers-for-resale and/or
qualified distributors/sales representatives. [Our] objective is to function as
an extension of [our] principal's in-house export sales efforts."
Under its ETC hat, Lloyd says, "[my
company] performs in a fashion similar to that previously described, except for
a diminished principal relationship, and business is typically conducted on a
case-by-case or ad-hoc basis. It is more a sourcing function for the buyer and
the seller."
In Germany, Michael R. describes his company's
role this way: "[We are] a worldwide consultancy to SMEs (small and
medium-sized enterprises) that wish to increase their sales and profits by
using the available world markets more successfully."
Market Research
Here's a rapid-fire overview of your market
research tasks. You'll want to do some in-depth investigation into each of
these areas:
·
The product or service
you'll sell
·
The end user you'll
aim for (mass-market consumer, heavy industry, light industry, medical or
hospital use, government, business or professional)
·
The country or
countries you'll export to or import from
·
The trade channel
you'll use (direct sales, representative, distributor or commission
representative)
Startup Costs
One of the catch-22s of being in business for
yourself is that you need money to make money--in other words, you need startup
funds. These costs range from less than $5,000 to more than $25,000 for the
import/export business. You can start out homebased, which means you won't need
to worry about leasing office space. You don't need to purchase a lot of
inventory, and you probably won't need employees.
Your basic necessities will be a computer,
printer, fax machine and modem. If you already have these items, then you're
off and running. Several of the traders we talked with started from ground
zero. "We started from nothing," says Wahib W., but once they got a
large project, that was all it took."
What's Inside
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Startup
Costs
Peter P.'s company started from a similar
financial position. "We had very little money in the bank," he says.
What they did have was a carefully built relationship with suppliers, and this
valuable asset the company was able to get up and running.
One of the many nifty things about an
import/export business is that its startup costs are comparatively low. You
have the advantage of homebased-ability, which cuts office lease expenses down
to nothing. Unless you're starting as a distributor, you can get away with
purchasing no inventory, which means no outlay of funds for pretty doodads to
grace display spaces (you have no display spaces!). Your major financial outlay
will go toward office equipment and market research expenses--and if you're
like many moderns, you already have the most expensive piece of office
equipment: a computer system.
But let's take it from the top. The following
is a breakdown of everything--from heavy investment pieces to flyweight
items--you'll need to get up and running:
·
Computer system with
modem and printer
·
Fax machine
·
Internet/e-mail
service
·
Software
·
Market research and/or
trade leads
·
Phone
·
Voice mail or
answering machine
·
Stationery and office
supplies
·
Postage
·
Travel expenses for
conducting market research on foreign turf
You can add all kinds of goodies of varying
degrees of necessity to this list. For example, a copier is a plus. It's also
nice to have bona fide office furniture: a tweedy upholstered chair with lumbar
support that swivels and rolls, gleaming file cabinets that really lock, real
oak bookshelves.
But let's consider that you're starting from
scratch. You can always set up your computer on your kitchen table or on a card
table in a corner of the bedroom. You can stash files in cardboard boxes. It's
not glamorous, but it'll suffice until you get your business steaming ahead.
Income & Billing
What can you expect to make as an
international trader? The amount's entirely up to you, depending only on how
serious you are and how willing you are to expand. Annual gross revenues for
the industry range from $30,000 to $200,000 and beyond, with an average of
about $75,000. Some traders work from home, supplementing 9-to-5 incomes with
their trading expertise. Others have launched thriving full-time businesses
that demand constant care and feeding. Wahib W.'s export company has a staff of
five that oversees multimillion-dollar contracts.
"There are tons and tons of opportunities
for [export] trade," says Wahib W. "U.S. manufacturers are at least
10 years behind the clock in exporting." So the potential for growth is
entirely up to you--as long as you're willing to put in the time.
Pricing Yourself
What's Inside
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Income
and Billing
As an international trader, you're an
intermediary in the buying and selling, or importing and exporting,
transaction. Therefore, you have to determine not just the price of the
product, but the price of your services as well. These two figures are separate
yet interactive. Because you're a swimmer in the trade channel, the price of
your services has to be added on to the product price, and that can affect its
competitiveness in the marketplace.
Since the fee for your services will impact
the success of the product, you may ultimately decide to change your pricing
structure. You don't want to undercharge your client so that you can't cover
your expenses and make a profit, but you don't want to overcharge and reduce
the competitiveness of your company and the merchandise you represent.
Import/export management companies use two
basic methods to price their services: commission and retainer. Normally, you
choose one method or the other based on how salable you feel the product is. If
you think it's an easy sell, you'll want to work on the commission method. If
you feel it's going to be an upstream swim, difficult to sell and require a lot
of market research, you'll ask for a retainer.
A third method is to purchase the product
outright and sell it abroad. This is a common scenario when you're dealing with
manufacturers who would rather use you as a distributor than as a
representative. You'll still market the product under the manufacturer's name,
but your income will come from the profit generated by sales rather than by
commission.
The Commish
Import/export management companies usually
operate on a commission basis of about 10 percent. These fees are based on the
product cost from the manufacturer.
Let's say you're working with English lawn
chairs, which cost you $110 each. Here's what you do: First, take the price the
manufacturer is charging for the product: $110. Now multiply $110 by 10
percent, which gives you a commission of $11 per chair.
So your product price at this point is $121
per chair ($110 + $11). To come up with the final price, you'll need to add
other costs to this figure: any special marking or packaging, shipping,
insurance and any representative or distributor commissions that you'll pay to
others in the trade channel, which we'll go over a little later. Once you've
arrived at a final price, you'll check it against your competitors' prices (you
did do your market research, right?). If your product's price is comparatively
low, you can bump up your commission percentage.
For now, however, you can see that for every
chair you or your trade channelers sell, you'll get $11. If you sell a thousand
chairs, that's $11,000 for you!
Biting the Retainer
If the manufacturer can't discount her price
sufficiently or if you feel that the product will be a tough sell, you'll want
to ask for a flat retainer (the monetary kind, not the dental appliance kind).
You'll pass all the costs of market research along to the manufacturer. By
taking a retainer, you guarantee yourself a set income rather than one tied by
commission to a "problem" product.
To determine what your retainer should be,
you'll need to consider three variables associated with the performance of your
services:
·
Labor
and materials or supplies: This
usually includes your salary or estimated salary on an hourly basis plus the
wages and benefits you pay any employees involved in the performance of the
job. To determine labor costs, estimate the amount of time it will take to
finish a job and multiply it by the hourly rate of your salary and that of any
employees you might use. You can compute materials as a percentage of labor,
but until you have past records to use as a guide, you should use 2 to 6
percent.
·
Overhead: This variable comprises all the
nonlabor, indirect expenses required to operate your business. To determine
your overhead rate, add up all your expenses for one year, except for labor and
materials. Divide this figure by your total cost of labor and materials to
determine your overhead rate. Or use a rate of 35 percent to 42 percent of your
labor and materials.
·
Profit: And the end result is: After all labor,
materials and overhead expenses are deducted, profit can be determined by
applying a percentage profit factor to the combined costs of labor and
materials and overhead.
Operations
What you will be doing during
your peak hours and beyond will depend upon how you've structured your
services. Some traders act only as sales representatives, finding buyers and
taking commissions, but steer clear of the shipping, documentation and
financing aspects of the deal. Others are happier offering a full line of
services, buying directly from the manufacturer and taking on all the
responsibilities of transactions from shipping to marketing. These traders
often specialize in either import or export and stick to the merchandise
industry they know best.
What's Inside
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Operations
No matter how exotic you want to get, your
most basic tasks will be obtaining merchandise, selling it, transporting it and
getting paid for it.
The Export Path
OK, exporter--you've found a buyer for your
merchandise. You're a player. You're ready to roll. So now what do you do?
Follow the export path:
1.
Generate the pro forma
invoice--give the importer a quote on your merchandise; negotiate if necessary.
2.
Receive the letter of
credit from your bank.
3.
Fulfill terms of the
letter of credit: Have the merchandise manufactured if necessary; make shipping
and insurance arrangements; pack the merchandise; and have the merchandise
transported.
4.
Collect shipping
documents.
5.
Present shipping
documents to your bank.
The Import Path
OK, importer. You've found the merchandise you
want to buy and then resell. You're a player. You're ready to roll. So now what
do you do? Follow the import path:
1.
Receive the pro forma
invoice, the exporter's quote on the merchandise; negotiate if necessary.
2.
Open a letter of
credit at your bank.
3.
Verify that the
merchandise has been shipped.
4.
Receive documents from
the exporter.
5.
See merchandise
through customs.
6.
Collect your
merchandise.
A Day in the Life
What does a trader's day really look like?
What does he do in between preparing pro forma invoices, requests for letters
of credit and shipping documents? Here's a behind-the-scenes peek, courtesy of
Michael R., the international trade consultant in Germany:
1.
First hour: Read
statistics printed overnight by the computer to see if each
representative/agent has fulfilled his plans, and initiate changes if
necessary.
2.
Work on the internet
for one to two hours to see what inquiries have come in, then answer them personally
or forward them to past or present clients who may be interested.
3.
Have short meeting
with colleagues to see if assistance is needed, then support them or
trouble-shoot.
4.
Look at the day's
newspapers to see whether there's any movement within my industry where I
should act fast.
5.
Take a coffee break.
6.
Look at the mail and
handle or forward items.
7.
After lunch, take time
to reflect on what has and what should have happened.
8.
Discuss problems
and/or chances for the future with prospects and/or business partners.
9.
Look again at e-mail
and the Web for news and new opportunities.
10.
At the end of the day,
there should be about an hour to discuss again with colleagues how the day went
and/or problems that came up.
11.
One or two evenings a
week, attend business events or meetings with partners for discussion.
On the Road
A trader isn't always at home behind his desk.
What does he do when he's out on the road? Here's another behind-the-scenes
peek, courtesy of Jan H., a Belgian tire trader:
Note that Jan's day, in typical European
fashion, evolves through a 24-hour clock, or what we think of as military time.
Day in Belgium:
07.00 - 09.00 Office work, e-mail, fax offers, mail, etc.
09.00 - 12.00 Drive to airport, meet customer from Finland; back to
warehouse, customer chooses products
12.00 - 13.00 Lunch with customer, general discussions
13.00 - 18.00 Visit with a customer from Nigeria; long discussion,
haggling over prices, payment terms, etc.; supervise loading of containers
bound for the United States; phone calls, fax, e-mail; arrival of a customer
from France, discussions
18.00 Quick trip home to change and shower
19.00 - ?? Pick up French customer at hotel, have cocktails and
dinner, more negotiations
Day on the road in Germany:
05.00 Leave home for 400 km drive
08.00 Arrive at first supplier; discussions and purchase of goods
10.00 Leave for next supplier
11.00 Next supplier; discussions without any result
12.00 Visit customer; make a sale
13.30 Visit another supplier; more discussions
15.00 Leave for another 300-odd km drive
18.00 Arrive at hotel; check e-mail on laptop, phone calls
19.30 Sauna and swim at hotel pool
20.30 Dinner with supplier, then to bed!
Marketing
As an international trader, your mission is
sales--in two different but overlapping arenas: a) selling
yourself and your company to clients as an import/export manager for their
products, and b) selling the products themselves to
representatives and distributors. Success in one of these arenas will
contribute to your success in another. Once you've established a favorable
sales record with one client's goods, you'll have a track record with which to
entice other clients. And, of course, each success will contribute to your own
self-confidence, which will, in turn, lend that air of confidence to your negotiations
with new prospects.
Hunting for Exports
A surprisingly small percentage of domestic
producers export their wares. So your marketing goal is to convince the huge
remainder that they can increase profits by exporting--with your guidance--to
specific target countries. You can accomplish this with direct mail and cold
calls. If you're starting with imports, don't ignore this section--you'll work
in basically the same manner.
What's Inside
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Marketing
Before you initiate contact with any
manufacturer, you'll need to do some basic market research:
·
What products are hot
sellers in the domestic marketplace? Focus your attention on products that you
know well or use yourself, or that are bestsellers in their market niches.
·
Are these products hot
sellers in your target countries?
·
If not, are there
situations or markets that would put these products in great demand if the
products were available?
·
Who manufactures these
products?
·
What is the selling
price of each product--and of competing products or brands--domestically and in
your target countries?
Direct-Mail Dazzle
Now you're ready to begin your direct-mail
campaign. Choose one manufacturer of one of the products you've researched.
Then call the company and ask for the name of the person to whom you'll want to
write. If the company is small, you'll probably want the president or owner. If
it's a larger concern, you might want to direct your letter to the vice
president in charge of sales, the sales manager or the president or owner.
Armed with a name and title, write your
letter, taking care to address the following points.
·
Introduce yourself and
your company.
·
Briefly outline the
potential of the overseas market.
·
Outline the product's
potential within that market.
·
If possible, explain
why and how your company, out of all others, will be able to position the
product best. For example, if you have experience with like products, be sure
to say so.
·
If you already have
contacts with foreign distributors, explain that you have foreign
representatives for overseas sales.
·
Ask for a personal
meeting to further discuss the possibilities.
Once your first letter is in the mail, sit
down and write another to a potential client in another product line. And then
another, until you've exhausted your first set of preliminary market research
products.
Now wait a week or 10 days. If you haven't
heard from your first target manufacturer, give him a call. Ask to set up a
meeting in his office to discuss your plan. Then call the next manufacturer and
the next. If you're not familiar with sales, you may find this portion of the
program a white-knuckler. Don't be nervous! You're offering these people a
terrific opportunity. Not everyone is going to bite (not everyone can recognize
a great deal when it jumps up and grabs them), but not everyone is going to
turn you down, either. A no thank you now and then is part of the game.
(Cold)-Calling All Clients
Cold-calling, so-called because you call a
potential client "cold" without any warming up by prior contact, is
an alternative to the direct-mail approach. The good news is that, if you're
calling locally, it's usually cheaper than direct mail. The bad news is that it
requires much more perseverance to be effective. The other good news, however,
is that, done properly, a cold call can be much more effective than direct
mail.
Before you make your first call, be sure you
know what you want to say and how you want to say it. Some experts recommend
writing out a sort of "script" that you can follow during the course
of your call. This is a good starting-off exercise to help plan your spiel, but
be aware of the fact that following a script has its drawbacks. The main one is
that the person you're calling doesn't know he's supposed to be following the
script, too, and when he gets off track, so do you.
Desperately Seeking Imports
How do you go about finding goods to bring
stateside? You have several options:
·
Travel abroad on an
import search mission.
·
Wait for foreign
manufacturers to contact you.
·
Attend trade shows.
·
Contact foreign
embassies' trade development offices.
·
Contact the U.S.
Department of Commerce's International Trade Association.
·
Track down leads on
the Internet and in trade publications.
Selling Yourself
You've located foreign manufacturers or
suppliers whose products have U.S. sales potential. Now you have to sell them
on the idea of entering the U.S. marketplace and convince them that you're the
person to usher them in. How do you do this? Basically, the same way you'll
pitch domestic manufacturers, with a direct-mail campaign. Only in this case,
you'll do better to think of it as a direct fax letter. Although many traders
rely on international mail, unless you're sending to regions or countries with
highly developed infrastructures, such as Canada or Western Europe, you'll be
much more assured of your missive reaching its destination if you send it by
fax.
In your letter, outline the various
opportunities available in the United States for the product and highlight that
you'll handle all import logistics with little cost to the manufacturer. It's
very similar to the export letter, with two exceptions:
·
You should address the
letter recipient. For example, use Monsieur (abbreviated M.) instead of
"Mr." if the recipient is French. Even though your letter is in
English, this little touch shows that you do know something about the French
language and that you've taken the care and courtesy to address the recipient
in his own tongue.
·
Check to make sure
you've eliminated any slang that may be confusing to non-natives.
International Call
Follow up in a few days with another fax.
Think of the follow-up as a firm but gentle nudge, an opportunity to strengthen
your position and demonstrate real interest in importing the merchandise.
Remember that part of your task is to convince the potential client that your
company is the best one for the job, so you have to supply a reason for this.
If you can't claim that you're experienced in interior design (or mulch or
whatever) sales in the United States and Europe (or wherever), then come up
with something else. Maybe you're only experienced in the United States so far.
That's fine! That's where you'll be selling. Maybe you're not experienced yet,
but you've done a great deal of research. Fill that in instead. Use your
creativity!
Marketing Plan
Whether you're planning on exporting or
importing, be prepared to present your prospective client with a marketing
plan. If the manufacturer is close to home, you'll naturally present it in
person. If she's overseas, you may still have to (make that get to) arrange a
personal visit to close the deal. If you feel strongly enough about the
product's U.S. potential, the trip will be worth the time and expense.
To prepare your marketing plan, you'll need
the information you've already asked for: pricing, product brochures or
literature, and samples. If your prospect balks at supplying these materials,
tell her that you'll need them to further explore the market potential and
develop a presentation for her, outlining the market strategy you plan to
pursue.
Once you have the materials in your office,
sit down and figure out every possible expense you'll have so you can arrive at
your sales price. Then, if you've already been in contact with distributors or
representatives, find out if this price will sell in their market. If you don't
have any representatives yet, you'll need to locate one and determine if he can
work with that price. Assuming the answer is yes, you've got a viable product.
Now write out your marketing plan, which
should include the following elements:
·
Target: Which country or countries will you or
your representatives sell in? Why are these markets viable? Include positive
market research information and be sure to assemble it in a clear, concise,
easy-to-digest format. This is where your desktop publishing programs will
shine--you can make charts, graphs and tables interspersed with facts, figures
and text.
·
Sales: Explain at what price you'll sell the
product, give your annual sales forecast, your fee structure and the profits
the manufacturer can expect.
·
Marketing: Briefly touch on any special marketing
or promotions for the product; for example, foreign or domestic trade shows or
any local advertising your reps will do.
