There are promising ways to begin your exporting adventures, and then there are other ways which you might want to avoid. “I was flown out to Dubai by someone who wanted to do a deal, handed a contract written using Sharia law, and they kept me in their office till 11.30 at night, trying to get me to sign it, with their own lawyer warning me I could be in very big trouble if I did something wrong,” recalls Jane Malyon, founder of The English Cream Tea Company.
Malyon can laugh now: at the time she felt under considerable pressure. On flying home, she showed the contract to a UK lawyer with experience of the Middle East. “He said, ‘you didn’t sign this, did you?’” Luckily, she hadn’t and because an alternative contract she got drawn up wasn’t subsequently acceptable, the deal was off.
Do the research
It was an early lesson learned. Malyon, who is currently poised to sign several overseas deals, now takes plenty of time to do her own research on potential partners. With a Canadian agent she is now working with, she says “it was after, I think, the fifth conversation” that she made a firm decision to go ahead and take him on.
Developing trust with local partners is critical to getting your product into an unfamiliar market, says Matt Deighton, managing director of Bolton-based manufacturers Sofas by Saxon. Export makes up 15% of the company’s business, and has been a vital part of the mix since it launched in 1982. Even though the internet has made selling direct to customers perfectly feasible in some overseas markets, it’s from straightforward in others, such as China and Russia.
You need to be discriminating when choosing an agent or distributor, and you need persistence, Deighton says. Look at who else they have on their books: “If they’re representing recognised names, or complementary products – in our sector that might be lighting or flooring – that puts them in the right sphere of the type of customers they’re talking to.
“We then contact those companies directly, and ask ‘does this agent really represent you, and are they any good? Often, if they’re not direct competitors to you, people are very obliging with information.”
Use an existing network
There is also a plethora of no-cost and low-cost advice and information available via UKTI, says Ed Salt, managing director at Cheshire-based Delamere Dairy, which exports goat’s and cow’s milk products to China via an agent in Hong Kong. It’s also worth approaching UK embassies and chambers of commerce in foreign capitals. These have access to sector and country trade specialists, and can provide dedicated research via the Overseas Market Introduction Service.
When the 2008 recession hit, Delamere Dairy decided to take a chance on a market of 1.4 billion Chinese people, many of whom are known to have an intolerance to cow’s milk. They employed a British agent who was already set up in Hong Kong to build relationships with various distribution channels to sell their goat’s milk, yoghurt, cheese and butter. At the time there was no registered Chinese standard for goat’s milk and two pallets were rejected after it was tested against criteria based on cow’s milk, but 18 months later Delamere has a trusted distributor with a wide penetration in the Chinese market.
Accountant Tahzeen Basunia, who co-founded the upmarket confectionary brand Jealous, says that he always saw 90% of the company’s market being overseas and finding opportunities has been a key part of the firm’s strategy. “We do a lot of our own research on the internet to find out which markets are suitable to the brand... It takes up a lot of time,” he explains.
But it wasn’t until they got some traction at home that the brand was taken seriously abroad. Basunia admits that he and his business partner wore through a lot of shoe leather knocking on doors to get the sweets into upmarket hotels such as Claridges, plus Harvey Nichols and Selfridges in the UK. These partnerships were essential and led to agreements with the consolidators on which they now rely.
Jealous now works with big exporters who consolidate lots of different products, deal with translating brand names and ingredients, do all the necessary restickering, and clear the stock through customs. If an overseas buyer that the luxury sweet brand has approached is interested, Basunia simply delivers the stock to a consolidator in the UK and accepts that a slice will come off the profits.
Build trust and insights
Chris Heyes, head of international for the International Festival for Business that kicks off in Liverpool in June, says that finding an agent takes time, and travelling to meet the person can give great insight. “So go out [to the country you’re interested in] and don’t expect to get a deal signed on that first meeting. You’re entering into a long-term relationship, and you don’t get married on the first date. It’s about building trust.”
You may, of course, need to take advice from in-country experts and evolve your product to tap into overseas markets, says Malyon: her scones have a shelf life of just two days, so exporting her cream tea hampers simply isn’t a goer. But after realising that Japanese and US markets are crying out for heritage brands, she now puts together boxes packed with stylish teapots, linen tea towels and luxury conserves, and is trialling a shippable bake-your-own-scone mixture. She’s also thinking of ways to franchise “a really beautiful British tea-room experience” as a longer term goal in overseas markets.
Mitigating the risks that many entrepreneurs worry about when entering a new market abroad also requires constant communication with whoever you choose, concludes Matt Deighton at Sofas by Saxon. “You want somebody who gets back to you: if they’re not that keen, you can tell… I like an agent to be quizzing us as well, digging deep – it shows that they actually care,” he says.
“Openness and transparency goes a long way – you are crossing boundaries and borders and the more you put into that relationship, the more confidence you’ll build. Because the last thing the agent wants is to put time and effort into your product and for you to fail on a delivery… that affects their relationships and their credibility.”
The relationship must be based on mutual respect. “The more an agent can understand what you do as a company, and why whatever you’re selling is different and better, the more they’ll be able to do for you.”
This advertisement feature is paid for and produced to a brief agreed with NatWest, sponsor of the winning new business and business essentials hubs.
