today’s first biz ladies post is perfect for those of you living abroad, or looking to sell abroad. kate williams of polli, has some wonderful tips about expanding your business’ market in a difficult economy, including how to price, ship, and represent your work abroad. thanks so much to kate for her wonderful tips!
CLICK HERE for kate’s tips on exporting after the jump below!
Tips for Exporting
In this economy, expanding your market can be a key to your business’ survival. While exporting is a great way to sell your existing range to a wider audience, you need to be aware of the challenges you might face. Polli has been exporting for 4 years now and we’re still learning! The key to exporting is working at reducing the barriers to importing, so your international customers feel like you’re a local.
Export Assistance: Having products designed and made in Australia, we found that we were entitled to government assistance with exporting. You should check with your government to see what you’re entitled to – they may be able to help with advice or even covering some of the costs involved. Exporting is beneficial for your own country’s economy and you’ll find there are lots of people and associations to help you.
Pricing: While pricing your products in different currencies can be difficult with fluctuating exchange rates, it’s important as you need to be able to give your customers a fixed unit price for your product. We recommend choosing an average rate and being prepared to wear the gains and loses. You also need to consider are if your wholesale prices are FOB (excluding shipping and import taxes) or a landed cost. This can be difficult as different products, countries, and regions have different import taxes. This is something you need to be clear on when setting out. You will probably also find that you can remove your local tax when exporting, which can in turn reduce your wholesale prices. When collecting payment from a customer internationally you need to investigate the different charges for wire transfers, cashing international checks, and charging international credit cards. Talk to your bank – there can be clever ways to avoid charges, like setting up a local bank account or installing a credit card machine that recognizes different currencies. Finally, if you have your RRPs listed on the internet you need to make sure that they are realistic worldwide. If engaging a sales agent or distributor, you need to factor their commission into your prices. You also need to give international retailers enough margin to cover additional costs like shipping, import taxes, and payment charges.
Shipping: Consider which products you want to export and how they’re packaged. You don’t want the cost (or carbon emissions) of posting air around the world – nor do you want your products to arrive broken at the other end! Designing products that can nest together or that can be flat packed for shipping or storage can be a great way to reduce freight costs.
Cultural differences: Every country has cultural differences, whether big or small, that you need to research before exporting. Working in different time zones can be challenging and taking small measures like downloading an international clock to your computer can help. We’ve often been known to call stores in our pajamas from home in Australia while people in New York City are just heading out to dinner. No one likes being called on their mobile in the middle of the night! While different languages and spelling can be difficult, it’s important to be aware of the differences and make an effort to reduce the distance between you and your customer. Learn the country’s different customs; for example in Japan it is polite to accept a business card with two hands and read it carefully before putting it away. Each country has different associations with specific colours, imagery or words. While one of our designs – Pippi – is a cute name for a small shell collected by children, this word isn’t recognized in North American and we found the design was referred to as a CLAM! Finally, each country has different restrictions on what materials and packaging can be imported. For example in Europe there is nickel ban so all products need to be certified to be nickel free; here in Australia it can be difficult to import wooden products.
Representation: You may choose to engage a sales agent or a distributor to represent your line in a certain country. It can be a huge help to have some on the ground who can help resolve some of those cultural differences. However, choosing someone to represent you away from home can be difficult. You need to ensure this person or company has similar values and ideas as you. You need to set realistic targets and establish the terms of the relationship early to measure their performance and communication. Most importantly, if you aren’t able to travel internationally yourself you need to be confident that they are showing your line with your vision. A sales agent is normally responsible for contacting customers and forwarding orders through to you for fulfillment and the collection of payment. A distributor normally orders stock from you in bulk and holds this stock to fulfill orders locally. Distributors are responsible for the collection of payment and all communication with the customers, and for this they take roughly double the commission of a sales agent.
Trade Shows: If you choose to travel personally and exhibit internationally, you’ll need to consider the differences in exhibiting away from home. We recommend traveling, as nothing beats seeing things first hand and being able to meet your customers face to face. However, there are high costs involved with traveling and you don’t always have your support network to help carry, lift, or borrow things. Renting trade show furniture can be expensive so consider researching Ikea internationally, partnering with a local furniture designer who could benefit from some cross promotion at the show, or get creative with furniture from local thrift stores. Because of luggage limits, it might be worth considering printing things locally and carrying your samples (if small) with you to avoid things getting lost with airlines or freight companies.
In conclusion, exporting is a great way to expand your business – just make sure you research, prepare, and set a plan to help your business break down those international barriers!
About Polli: Maja Rose and Tess Lloyd met in 1999 while studying Industrial Design together at the University of Technology, Sydney. After graduating into professional roles, the designers soon sought the fulfillment of creating their own products by hand.
Polli was born from their strong interests in sustainable design, craft culture and fashion. The folding methods used in this family of products are influenced by both Japanese and Danish paper designs, and the materials chosen allow them to express their interest in color and light.
By creating home and fashion accessories through manufacturing techniques usually reserved for industrial products, Polli is a hybrid of both product and fashion design. It appropriates materials and processes from other industries for mini mass production.