Ways in which you can penetrate international markets

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There are many ways or methods in which you can enter a foreign market. They include:

  • Exporting directly to the international customers or consumers

Major benefits of this method are:

  1. It is relatively simple and has the lowest risk
  2. It is the most popular method well understood
  3. It is easy to use the existing systems. For instance: Using an e-commerce platform as the medium of business
  4. Business keeps all the profit earned
  5. Business stays in charge of terms of payment, currency and delivery.

Well, this method has major drawbacks too and they include and let us take a look at them. They include:

  1. Potentially bureaucratic. As in, the organization of the business looks more complex and rigid.
  2. There is a risk of non-payment
  3. Customer service may need changing like for instance in after-sales care they need to learn a foreign language
  4. It may be affected by tariffs and quotas
  • Selling via international agents or distributors

Like any other method of business, this has its benefits and drawbacks too. Let us check on the benefits first. They include:

  1. Agent or distributors tend to have knowledge of the market and the existing customers. This is good for business since the conversion rate will increase.
  2. It is cost-effective since commission or distributor margin is a variable cost, not fixed
  3. It is likely to accelerate international sales in key markets compared to exporting

Its drawbacks include:

  1. There will always be a loss of some profit margin to the agent or distributor
  2. Unlikely to be an exclusive arrangement since its hard to trust the agent or the distributor’s effort and commitment
  3. It is harder to manage the quality of customer service
  4. The agent or the distributor owns the customer relationship
  • Opening an operation overseas

The major benefits of this method are:

  1. There is a local contact with the customers and suppliers
  2. The owner experiences the market first hand
  3. There is direct control over quality and customer service
  4. It avoids tariffs and quotas

Well, it has its drawbacks too which include:

  1. There is a significant cost and management of time
  2. There is a much higher investment
  3. Need one to understand and comply with local government legal and tax issues
  4. It is a high risk

In this case, if you need help with this kind of knowledge or custom clearances in international export, please check ClearitUSA Amazon fba for help.

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