5 Tips for Overcoming the US Market
ONE: Pay attention to your business capabilities
The first important step is an honest assessment of your business. Developing an export market takes time: it’s not uncommon for producers to spend three years focusing, energy and costs before getting their first order. So when you focus on your export business, you need to make sure your local operations operate smoothly.
Obtaining export success can create volatile demand forecasts that lead to overstocking or understocking and production variations that limit the capacity to complete orders on time.
Exporters need to be aware that ‘niche’ and ‘small’ in the US is very different to Australia.
For example, if you win a contract with a ’boutique’ supermarket with 10 stores it might sound very manageable, but it’s not unusual for boutique” supermarkets to pull in over $300 000 a week in revenues.
Scaling up production quickly to meet increased demand ultimately requires increased investment for additional equipment, inventory, logistics, staff and marketing. Also, exporting adds an extra complexity to normal business cash flow management, particularly when costs outstrip export sales returns.
TWO: Research, research
Export homework should be rigorous. Discovering too late that a successful local brand cannot be used in the US can prove disastrous. You need to understand the business culture in which you will operate.
Socio-demographics for your product in Australia may be very different in the US where for millions of people, English is a second language. In addition to different customers and operating practices, you will face a variety of regulations, taxes, and documentation. You will also have different prices, terms of trade policy, and payment schedules.
Weather patterns in the US are extreme. Do not allow extreme heat or cold to damage the delivery schedule. You also need to take into account long distances in the supply chain, as well as shipping and handling and shipping issues, and uncertain market conditions.
Service issues need to be taken into account. If your identified US market wants 24/7 service, it might be difficult to send it from central NSW. You should consider providing a simple return policy, shipping guarantee, type support number 1800 and web access to ensure you meet minimum US client service expectations.
THREE: Identify your competitive advantage
The US market is very competitive. Buyers are interested in dealing with businesses and suppliers who understand their needs and can fulfill their promises. US buyers are very willing to try competitive goods and services provided they can see tangible benefits in switching suppliers. Find out what potential customers really want, and what their current suppliers don’t provide. Create your own profit.
Increasing household success makes sense. Maybe what works well with local customers can also work well with their colleagues in the US. Ask for some local references. Offer potential US customers the opportunity to test your offer. Make some US references. Importantly, you need a plan to introduce new product or service releases into your offer on a regular basis. US consumers and buyers hope to see new items / options or content so they stay involved with you.
FOUR: Choose an effective sales channel
Hiring people or sales teams in the US carries high costs. Using channel partners on the other hand, provides less risk and lower entry costs. Their market experience might extend beyond higher margins and less control over customer relations.
There may be cases for using a combination of direct sales models and using channel partners: different models for different sectors. Channel partners are experienced in recruiting and managing retailers and taking new offers to the market quickly. They can also help with training, installation, and support. Ultimately, your decision making must be based on how well you can serve your customers the best.
FIVE: Review the future
An effective plan is very important for developing business in the US. The plan must be a living document. This must include realistic goals as well as details of how and when they will be achieved.
The plan must cover all traditional components of the business plan: from market reviews and valuations, customer and product evaluations, distribution, promotion, and cash flow finance.
Critical paths detailing milestones should be included as well as contingency plans for unexpected impacts and suggestions on how you will deal with them. This should include details on how you will measure your success so you can better balance the needs of customers and management at home with your export efforts.