Challenges for selling internationally?

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Permalink Reply by itzik benbaji on November 6, 2008 at 8:40am

I am working for a non American company (sorry for my non USA English), as an international marketing manger since 1994 and can offer some assistance in east Europe, near east, Russia and former USSR states.

The issue of payments is crucial but I am working with some Credit Insurers that allow open credit lines in my territories, one of them is http://www.eulerhermes.com/en/products-solutions/products-solutions...
It’s a France company, but I am sure that they will find a way to work with US exporters.

An issue that I would like to rise and would like to have the members assistance is my problem to predict the market potential; I found out that in my territories statistics such as no. of DS per 1000 and other are useless.
Lately I checked the level of expenditure per chair or dental unit for dental consumables – it gave me some insight And I need some figures from to US in order to put this number into some context – can some advise this US figures…

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Permalink Reply by Jim Kitch on November 6, 2008 at 9:43am

Take a look at www.export.gov and www.exim.gov. This is the US Commercial Service and the Export Import Bank of the US. Many services are free or very low cost and will save you many, many headaches as your prepare to head across the pond. Please feel free to contact me offline with questions. We have had great experiences implementing these services.

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Permalink Reply by Carol Clark on November 6, 2008 at 10:29am

How do other companies handle currency fluctuation when selling to dealers outside the U.S.? Do they sell in USD worldwide or, if they sell in the dealers' currency, how often do they adjust the pricing?

I've seen the value of the USD decline 12% against the Euro in the last 10 weeks, and decline 22% against the Australian Dollar in the same period of time. Granted, the global economic crisis is probably fueling some of this so perhaps the fluctuations aren't usually as great as they are now.

Carol Clark
DigiDentist

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Permalink Reply by Doris de Beer on November 8, 2008 at 4:05pm

If you are a bigger company, then your best option is to have operations and cost in the currency area that you do business in to offset currency fluctutations. You then set your product transfer cost between the US and international operations to minimize your tax responsibilities. Corporate tax can be as low as 12.5% in Europe and it now can not only help you to offset currency fluctations, but also to reduce your taxes.

If such an investment can not be justified, I would recommend to sell in local currencies in the bigger markets like EU and sell in US$ in the smaller countries. You can always give rebates incentives in the countries where you sell in US$ should this be necessary (and they are easier to take away).

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Permalink Reply by Carol Clark on November 8, 2008 at 4:17pm

Thanks, Doris. Food for thought.

Carol

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Permalink Reply by Stefan A. Gefter on November 19, 2008 at 5:11pm

Hi Doris:

I've been in the international sales and marketing niche for about 16 years, focusing on dealer network expansion, as well as global strategic relationships. I wish you every success with your company!

The current global economic crisis notwithstanding, the two biggest challenges, I as I see them are:

1. The lack of a globally harmonized regulatory system, which means that each country has its own registration criteria (and cost) that must be met to get a foot in the door.;

2. Recent upsurge in the US Dollar worldwide;

Stay in touch!

Regards,
Stefan

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Permalink Reply by Doris de Beer on November 19, 2008 at 7:09pm

Hi Stefan. Thank you for the constructive feedback. Regulatory continues to be a stumbling block and I am afraid it will never harmonize to the point where we don't have to go through all the hoops anymore. We still can not agree on inches or centimeters! My company is considering to providing regulatory services in China because there is a huge need for this, especially for CLASS II products.

The recent dollar upsurge is interesting and I have not seen a huge difference in buying pattern from the dealer network when there is a fluxtations in the dollar exchange rate. There is definitely a grey market out there that benefits from these fluxtations, but at the end the dealer wants to deliver whatever the end-user asks for and will try to do this while trying to maximize his profits.

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Permalink Reply by Stefan A. Gefter on November 20, 2008 at 11:07am

Hi Doris:

I just had an order reduction in Korea due to the increased value of the USD. Still, in today's climate, a reduction is better than a cancellation! In my experience, if you offer a great product at a mutually fair price, most dealers will be relatively loyal. Still, it is a competitive world out there, which keeps me on my toes!

The regulatory issue, plus unfair barriers to imports (Brazil, India, etc.) make our work that much more challenging. However, despite the hurdles, I still believe that International offers manufacturers much greater growth potential than the domestic market.

Regards,
Stefan

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Permalink Reply by Dan - UK on July 22, 2009 at 4:19am

Hi Doris

Firstly good luck with your new company - I wish you all the success possible.

I have been working in European Sales and Marketing and the dental industry for the past 7 years so have seen all the challenges that most of your clients will be looking at.

Aside from the payment issues (I used to ask for money before dispatch or a % of the money for all new customers under 12 months trading with us) i think the biggest problems a US company will face is their non understanding of the international market and how it can vastly differ from that of say North America.
Regulatory issues and intellectual property rights will only be an issue if a company doesn't do its own research - there are some very good companies (especially in the Netherlands) that are able to act as a agent for a lot of the registrations if you don't have offices internationally.

Happy to help if you or any of your clients have any questions especially about the UK or EU markets - remember there are nearly 75,000 dentists in Germany break that and you will see a very good ongoing revenue stream.

Good luck

Dan

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