Does your business have an overseas selling strategy?
There are big rewards to reap selling internationally, but many small businesses begin their overseas experience accidentally when their Etsy or eBay stores catch the attention of someone in a far-away location. So where do you start? We caught up with Premium member Sonya Michele to find out how she did it.
Sonya has been running her limited edition scarf business, dog&boy, since late 2016. Before then she’d be in the corporate world for 20 years when she suffered a “textbook mid-life crisis” at age 40. It was at our Seth Godin event that she had her light-bulb moment and went about creating a business – and a life – she loved.
“I learned very early on that what sells at home won’t necessarily sell overseas,” explains Sonya. “China is vastly different to any other market in the world – and I had to learn how they shop and how to truly stand out there.”
China is fast becoming a focus for Australian small businesses seeking to grow their business overseas. Research conducted by Australia Post found that China (35%) was the fourth most popular location for small businesses selling overseas, after the US (46%), New Zealand (42%) and the UK (38%). And small businesses who aspire to sell overseas are five times more likely to consider selling into China than anywhere else.
“Although our stunning black and white packaging in the domestic market is considered sophisticated and beautiful, in the China market these are not colours that are generally well received,” says Sonya. “So we have taken steps to adapt it to increase appeal such as adding coloured ribbon and paper.”
“Every country and market, and even city is different to the next,” says Sonya. “Don’t assume what works in your domestic market will resonate internationally.”
As every country is unique with its own laws and culture with different customs requirements and logistics considerations, your time, cash and resources are limited and precious, so you want to be sure you’re investing where the potential is greatest.
Taking some time to understand these requirements up front may help you both eliminate, as well as identify, potential markets. As China continues to open up to trade and rapidly increase its level of imports, it’s an increasingly receptive market for Australian goods.
In a country as enormous as China, you may even want to get even more granular and target a specific region says Lucy Watson-Jones, Director – International Sales at Australia Post.
“For example, our 2018 Inside Online Shopping Report reveals that Zhejiang province situated on the east coast was the top purchasing area for Australian goods. Consumers in Shanghai and Guangdong province are also buying up big,” says Lucy.
Sonya had anticipated wholesale exporting dog&boy scarves by her third year of business, but a serendipitous opportunity in early 2017 presented itself when Trade Victoria connected Sonya and her team to a Chinese e-commerce fashion platform.
“The process took about 6-months to go through for business and product review, and set-up before finally launching September 2017,” says Sonya of their launch. “Since then we have had solid growth into the China market.”
“Most recently, we had a direct approach from a distributor to launch into the Indonesian market, which is currently in the pipeline.”
Sonya says their initial ‘can we afford to do this’ proposal was not much more than a back of the envelope type calculation.
“In reality, we didn’t take into consideration some of the T&Cs of our distribution contract such as product returns or distributor promotion. While we have a trusted relationship with our distributor, ultimately it was our responsibility to check the finer detail so we had to wear the costs of this.”
Sonya’s best advice for anyone considering breaking into the international market is to “research, constantly.”
“Exporting (for wholesale) is a long game and the goal posts are constantly changing so continually research and read about trends and market changes and adapt your approach and business accordingly.”
Think local, and don’t try to do it all yourself.
Local knowledge is powerful. A local partner can help, and if you can, nothing beats visiting the country yourself to really get a feel for what works locally.
“Get yourself in-market,” adds Sonya. “Visit and spend time where you are looking to export to. You can’t get to know your customer from behind a laptop.”
According to research conducted by Australia Post, small businesses who have been selling overseas for more than a year are also more likely to use support services, like advisors, insurance providers or intellectual property experts, than those just starting out.
“It’s well worth seeking this advice as early as you can, to set you on best path for success and minimise surprises,” says Lucy Watson-Jones of Australia Post.
Sonya says of their direct to consumer sales they have a digital marketing strategy with a heavy brand storytelling focus to target certain markets, cities, demographics, currently Singapore, Hong Kong, Canada and the US.
“As a new brand into a particular market with a premium product, the strategy is creating brand awareness and getting to know our story rather than seeking immediate conversion.”
Supply and demand
Another important thing to consider is your ability to scale up production and supply. Countries like China have significantly higher populations than Australia; are you ready to go if the orders start rolling in?
Sonya says preparation, along with time and money investment is key to international success.
“Have a solid domestic market presence to support your international ventures,” adds Sonya. “Not only will it support the endeavour financially, but it also provides proof of success when entering a new market.”
Asked if she thinks dog&boy has ‘made it’ internationally, Sonya says “Not yet.”
“We’ve got a long way to go, but we have definitely had success in a short period. We have taken a curious yet cautious approach making sure that worst case we could support any fall-out.”
“Having reliable and trustworthy partners across all our needs is our number one reason for success to date. Whether it be our distribution partners, marketing support or logistics supplier, I know they understand our business and our needs.”
dog&boy is now shipping an average of two international packages a week – 5 percent of its total sales. Sonya’s eye is now fixed firmly on the United States – and she’s hoping to match the volume of sales she’s making in London, Canada, China, Singapore, and Malaysia by 2019. “My top priorities for international sending are reliability and cost. Both make my customers very happy!”
This article is brought to you by Australia Post; they deliver to more than 190 countries, process more than 270,000 international parcels daily and reach 328 million delivery points worldwide.
To find out find out how and why according to Australia Post’s research, 27% of Australian small businesses are now selling overseas1, and the opportunity that exists for others to follow, download their insights paper Taking on the world: meet the Australian small businesses selling overseas.
1According to two surveys conducted by Australia Post in 2017. Read more about the research in their insights paper.
Connect with Sonya Michele here.
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