Let’s not tease us!
If a small medium manufacturer company is willing to growth and survive in the future, there is only one way to do it. Internationalized the company. To do that the manufacturer will irremediably have immediate cost to absorb.
As for what happened in the past and still now with the outsourcing of some type of department such as HR, Finance, Warehouse management now is the time to think about externalized the Export department.
Most of the companies will think “this is crazy”, “we will never outsource a commercial department or even part of it” ……the reality is that outsourced commercial teams has been in the business model since ages, just think about sales agent replacing direct sales rep, distributors replacing an entire organization in a country or simply replacing all the sales team in a region.
So why a manufacturer should look at externalized the export department?
Actually the benefit a manufacturer could incur are multiple.
KNOWHOW: Outsourcing the export department will immediately provide to the manufacturer access to all the knowhow of someone already has in the market the multinational company is wishing to enter and in some case could also give you a vision that could be considered out of the box based on the deep cultural knowledge your outsourced export department will have.
SPEED TO MARKET: Outsourcing the export department will speed up the manufacturer access in the market considering the wide local network it may have, avoiding the waste of time to look for the right local candidate. The time the manufacturer will save will be related to the setting up of the local office, knowledge acquisition, staff hiring process, training etc. All this processes are at errors risk, which could be highly costly.
COST EFFICIENCIES: Opening a new business could be very costly and without a fast return can seriously impact the manufacturer P&L.
Establishing an internal export department will spend several months to understand the market, to find a short list of candidate distributors and will most probably accept the in market pricing provided by the distributors.
Outsourcing the export department, instead will help in cutting these costs. The Outsourced export department will understand the manufacturer products/services, the segment, will communicate with its distributor network to verify the market interest on the manufacturer products, negotiate the pricing accordingly with the manufacturer guidelines and assist the local distributor in planning and forecasting.
Outsourcing the export department will speed up results cutting the costs at a fraction compare to the cost the manufacturer would incur by setting up an internal operation.
MITIGATION OF RISK: Expanding internationally carries a large variety of risks; Competition, government regulations, financial conditions, cultural etc.
All these risks could also suddenly change. Thanks to its local network and its experience, DOT 2 DOT will support the manufacturer to avoid risk and address solutions to facilitate the market access and capitalize them.
REDUCED LABOUR COSTS: Setting up an internal department to manage the territory expansion will lead the manufacturer in Recruiting and training process for the new on boarded staff.
These activities could be very expensive; outsourcing the activities of the internal export department offers an attractive, cost effective alternative to loaded employee costs.
By outsourcing your export activity to DOT 2 DOT, you are reducing your labor costs increasing productivity simultaneously, which in turn in higher profit;
MAINTAIN FOCUS ON CORE BUSINESS: DOT 2 DOT allows its clients expanding their brand awareness and their businesses internationally whilst maintaining their domestic or core businesses focus.
The time dealing in international expansion is significant and core business activities can suffer as resources become overstretched.
DOT 2 DOT enables you to prioritize, and focus your sales and marketing energies on core activities like further developing your brand and creating higher value added products and services that can benefit both your domestic and international customers;
INCREASED EFFICIENCY: Years of experience and a thorough understanding of the international trading process allows DOT 2 DOT to provide a timely and efficient services even in the most complex projects; RETAIN FULL CONTROL: DOT 2 DOT clients retain full strategy and budgetary control. They approve all distributor relationships, market access strategy, prioritization of expansion, brand and promotional activity, etc.
DOT 2 DOT can advise on best course of action, and will deliver the agreed plan, but it remains your business.
THE SECOND STEP: DOT 2 DOT can strengthen your company managing your export department activities and when ready, with a justifiable revenue DOT 2 DOT can support you in identifying the right candidates to be on boarded in your company.
DOT 2 DOT daily activities in the managing your exporting function may include but not be limited to:
- Implementing your export strategy and activities
- Continuous follow up and update in legal and regulatory changes affecting the target market.
- Update you in new customer trends and developing sales strategies to meet their needs;
- Attending industry events, exhibitions and shows;
- Attending customer/distributor/agent meetings in the target market;
- Analyzing new business potential and promotional opportunities;
- Presenting export sales forecasts;
- Negotiating distribution agreements and contracts;
- Working with you and/or your marketing team and managing, supporting, and training your distributor/agent network within the target market, including setting distributor objectives and conducting regular performance reviews;
- Quotation/proposal writing and/or review;
- Monitoring of sales orders and A/R;