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Routes to market
Put simply, your route to market is how you choose to sell your products and which route you choose will impact the number of sales that you’ll achieve. Finding the right route to market is essential if you want to become an export business. When choosing your route, it’s about quality over quantity. If you take on too many then you’ll have to perform a juggling act. Instead, you will need to research your target customer and understand where it is that they’re currently buying from. You may need to choose a route to market that is different to how you sell in the UK. For example, if you’re currently selling out of a shop, opening a shop overseas might not be the easiest or best next step, and selling online instead could be your best option.
The main routes to market for an overseas audience are:
- Selling online
- Selling to international retailers
- Working with wholesalers, distributors and sales agents
Selling Online
One way to reach overseas customers is through an ecommerce website. Customers trust this as a legitimate retail option since internet connections have improved and there are secure online options. However, cyber security is still a major risk, even for small businesses. For more information on improving your online protection, check out our Cyber Security eBook.
Online selling is convenient for customers to use and it allows your business to be open 24/7. But, there is a lot of competition online and it may be a long process to build brand awareness. If people aren’t aware your business even exists then they may never stumble onto your website. You will need to consider who your target audience is and if this platform is relevant for them.
Selling to International Retailers
You could start selling your product into a well-known, trusted brand. This will establish credibility and will give your product high visibility and access to a wide audience. Retailers will already have an established client base, so you’ll be able to target these, rather than focusing your energy on creating product awareness.
Just be aware, retailers are in a powerful position and may not offer you a good price for your product. With this option, you’ll be likely to operate on a small profit margin. You will have to sell your product to retailers at a lower price compared to selling direct to customers via your website, as retailers will mark up the product price.
Selling to wholesalers or distributors
Distributors act as the middleman between suppliers and the end customer, which may be useful if you’re expanding to an overseas market. It’s an easy way to sell large volumes, as you’re providing products to one client, rather than transporting it to various locations. Distributors may already have an established customer base, which you’ll be able to sell into. They should have sales and marketing expertise, so they can take your products and promote them in the most effective way.
The selling price will be considerably lower than selling direct to a customer, or even to a retailer. You’ll have no opportunity to build a personal relationship directly with your customers either, but this is a difficult one when exporting unless you’re directly opening a shop in your target country. You may lose control of the way your product is marketed and priced, damaging your desired brand.
Sales Agents
Sales agents are useful if you need specialist help in a particular sector or new location. Similar to distributors, they can be a good stepping stone when entering an overseas market. Sales agents work on a commission basis, so they’ll be highly motivated to sell your product. They may already have an established client base, which you will be able to sell into.
On the flipside, you may have little control over how your product is described to your customers, which could lead to misbranding by the sales agents. You will still be responsible for shipping and other trade-related logistics and you will have no control over the direct relationship with your client.
Through consideration of your routes to market, you’ll be able to make sure you are reaching your target audience, securing profitable new customers, spending less but selling more, and building strong connections in a new market.
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