Many companies today distribute goods throughout their local region or across the country with considerable success, and some may be considering expanding into an international market to increase sales. The fact is that managing international distribution channels can be profitable and rewarding for many companies, but it can also be challenging on several different levels. By spending some time analyzing what is involved in managing international distribution channels, you may make a more informed decision about expansion that is right for your company.
Firstly, you should carefully consider the benefit associated with finding an international market that is similar to your own. Reaching into international markets can be difficult to do because your products may appeal to a different target audience, marketing messages may be skewed when they reach a foreign audience or are translated into a foreign language and more. Examples of similar international markets that may be compatible include New Zealand and Australia or Singapore, Malaysia and Hong Kong. Do your research and find out if the desired market does have a demand for your goods. Choosing the right international market is imperative for success as your company expands. Talk to local retailers and their customers to establish if the market is worth the investment.
In addition to selecting the right international market to invest in, there are other logistical concerns to consider when managing international distribution channels. For example, you must consider if you will sell your goods online or through local retailers.
Online distribution only requires you to ship goods overseas direct to the customer. But international freight can cause issues and lost stock can be a time consuming nightmare to deal with. Consider insurance.
While selling big orders to international retailers sounds good it also brings with it some administrative issues. The lack of transparency, trust and distance between you and the retailer can cause communication issues and in a lot of cases the retailer will ignore your account leaving you with little hope in recovering what’s owed to you.
Get in front of your desired retailers as much as possible. Establish a good business relationship with them before entering into a risky business deal. Consider getting a local distributor. Someone who can go door knocking when it comes time to do the debt collection.
You must also navigate the challenges associated with working with multiple currencies. Fluctuating currencies rates are not manageable on spreadsheets. Consider a good cloud based inventory management and sales management system to handle this for you.
As you can see, there are many factors to consider when you are evaluating the pros and cons of managing international distribution channels. Thanks to innovations in technology, shipping services and more, expanding a company’s operations into international areas is easier to do than ever before, and many companies are finding great levels of success from these efforts. However, you'll need to carefully consider each of these points so that you make the best decision possible for your business.