After pouring heart and soul (and significant investment) into developing toy products, a prudent business should always seek to find export sales opportunities to maximise return on investment, reduce the risk of relying on our home market alone and to increase the long-term sales potential of our organisation.
The challenge though is that it isn’t always easy to establish our product lines in other markets.
Moreover, significant risks are involved including stock and bad debt risk, failure to comply with local regulations and cultural expectations and distribution partners badly managing our products and brands to our long-term detriment.
There are several potential paths we can take to expand outside our home market.
From setting up direct distribution overseas, to strategic regional partnerships down to more of a whoever places the order gets the stock approach, anything goes.
But when we analyse companies achieving significant long-term export growth, there are certain fundamental factors evident.
Firstly, success in the home market is a prerequisite most of the time. If it won’t sell in your market, it probably won’t sell in other markets either, so why burn relationships with potential partners when the total number of companies we can work with in each market is finite? We can score a few one off deals with this approach, but that’s hardly going to deliver long-term success.
Secondly, a plan on getting from A to Z is in place. If a company’s goal is to eventually build up subsidiaries across multiple markets, they will construct a plan to get there based on ‘stepping stones’.
Reps, distributors or licensees as door openers leading eventually to direct distribution. Although this approach is a little sneaky, it’s also very common.
Finally, market understanding is pivotal. Some products and brands work in some markets, but not in others, for reasons of culture, pricing, retail landscape, etc.
So an obvious success factor is a focus on delivering more of what works on a market-by-market basis.
Those organisations who blindly push the products they want to sell versus starting with finding out what actually works, what their customers, or their customers’ customers really want, are normally setting themselves up for a whole load of huffing and puffing without achieving the desired results.
The UK market represents between three to six per cent of global toy sales (depending which figures you believe), so there’s huge opportunity out there, but only for those with a winning approach.
Agree with Steve? Let us know in the comments section below.