Challenges for selling internationally?

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Permalink Reply by Shawn Nowak on October 31, 2008 at 8:51am

We sell internationally around 20-30 packages a week now and the biggest hurdle is payment and if they have problems. We have stopped taking visa/mastercard from international customers because we have no way of getting the money if it is a fraudulent card, we now only accept wire transfer or Paypal. The other challenge would be that sometimes customers grip about the duties and customs fees which we have no control over, it would be nice to know what fees they would have to pay so we could let them know upfront.

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Permalink Reply by Doris de Beer on October 31, 2008 at 9:33am

It is hard to sell directly to end-users overseas because of the shipping and duties cost involved. Also, EU dentists are expecting delivery within one day which is not a problem if you have a warehouse in EU. There are companies where you can outsource all these logistics to. Another option would be of course to find the right distributor partners. What I found is that most US dental companies are not be able to deliver the same service to their international cutomers as to their US customers and this will make it difficult to grow internationally.

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Permalink Reply by Christine Klemmer on October 31, 2008 at 2:35pm

We are looking to expand globally and our two biggest challenges are price and intellectual property protection. How do we keep a foreign country from infringing on our patents and selling the product at a lower price point by building it in Asia?

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Permalink Reply by Doris de Beer on October 31, 2008 at 2:58pm

This is something what a lot of companies are afraid of, but unless your company could generate 100+ million in sales in Asia, then I would not think intellectual property is something to be afraid of. We really haven't seen this problem in Asia in the dental industry and the thought that you can protect your product by not going to Asia is in my opinion not true. Especially the chinese manufacturers are very advanced and they basically can make everything through reversed engineering if they wanted to. Also, the Chinese government is getting more reactive to this problem, but again this is more of an issue for products that can create volume on the street (like CD's, clothing etc.)

My company is setting up a business in China as well next year and maybe there is something that we can do to help?

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Permalink Reply by Christine Klemmer on October 31, 2008 at 3:16pm

Thank you for your insight. It certainly makes sense.

The possibility of working with your company is an interesting prospect. We have been approached by a distributor in Singapore, but then the concerns I mentioned above came about during discussions and we have not moved forward with the relationship. Let's stay in touch!

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Permalink Reply by Doris de Beer on October 31, 2008 at 4:39pm

Thank you and one final remark. A dealer in Singapore won't be able you to represent your company for all of Asia. Every country in unique and you will need to be approach them as individually markets and if you are afraid of intellectual property, then I would recommend local oversight.

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Permalink Reply by Eric Attoian on November 2, 2008 at 11:09am

In working international with dental distributors around the world, I found that these are the main issues that were experienced.

1. Payment from international clients (Determining which distributor's in each country is a viable partner is key)
2. Meeting correct price-point for each individual country (each countries income level determines what is affordable)
3. Effective marketing (each country has its culture and different ways of selling)
4. Registration issues (every country has its different set of regulations on products that are imported)

Each country must be given the attention you would give each distributor here domestically (new product info, marketing material, samples, promotions, etc.). It is a must to visit each distributor face to face, this alone doubled sales in almost every country I made visits to.

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Permalink Reply by Doris de Beer on November 2, 2008 at 4:39pm

I fully agree with you Eric and it seems that you experienced this first hand. I helped built the international business for Hu-Friedy Mfg. Co. over 6 years and we had significant international sales that justified us to have a large sales office in Europe and a representative office in Japan and China, but it was still hard to create a strong presence in every country. Showing up is half the sale, but I found that business was back to normal when you on your way back home. This is why I started the company Glocal Concepts that will allow companies to create a needed local presence to significantly grown market share over time. Thank you for the great feedback.

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Permalink Reply by Stefan Luger on November 3, 2008 at 4:39pm

I have also owned a compaany that sold internationally and it can be a problem of getting paid. It is important to have a relationship with the dealer you are dealing with and one safe method of selling large quantities of goods is by having the customer get a letter of credit from his bank. Then when you go to your US Bank to get paid, then all you have to show them is confirmation that you shipped the goods. There are also other prerequisites that either party can add to the the Letter of Credit.

The other thing that I did when I had my own company is to have an International Independent Sales Representative who protected me from certain dealers and sold to foreign dealers I didn't even know existed. It was worth paying a commission for that.

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Permalink Reply by Doris de Beer on November 3, 2008 at 8:30pm

It is important to know who are the good dealers and these are normally paying on-time. Having a letter of credit could be a solution but this can get very expensive, especially for orders under $10,000. The grey marketing problem is a big concern and there are companies who are specialized in this. It continues to amaze me how big the network of companies is who buy a product at one place and sell it for a small added margin to diffirent channel accross borders.

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Permalink Reply by Mary Frances Studzinski on November 4, 2008 at 9:53pm

I have had customers interested in products available here in the US, but they are unable to get training on the product if necessary, as courses may not be available for them in their country.

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Permalink Reply by Eric Attoian on November 5, 2008 at 11:21am

Getting paid seems to be the main issue or worry by manufacturers going international. You just be patient and you will find great distributors that understand your worries of payment and will have no problem with letter of credit or pay by credit card on some occasions. After one year, or once they are selling the product and have demand from their customers, I put them on 30 or 60 day terms. Yes, there is some risk with this, but orders and sales volume increased and I never ran into problems due to the established relationships.

This is so refreshing to hear other knowledgeable thoughts on international business. Doris knows his stuff and working with him would be a great advantage and would minimize risk by huge margins! Having experience on your side with international is a must.

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