Related Posts Plugin for WordPress, Blogger...
2012 DSA Annual Meeting Speech
Connect

Subscribe By Email

Contact

Email Us

228 Park Avenue South, Suite #92144 New York N.Y. 10003

Monday
Oct152012

3 Mistakes U.S. Direct Selling Companies Make When Going International

So, you've decided to grow your successful US direct selling company by taking it on the road and opening in international countries.  You know what you know, and you also may know that there are many things you don't know.  So you hire knowledge to tell you what you don't know.  And hopefully that is helpful.  

But, after many company, and country opening experiences, let me pontificate on three things to think about when going international.  For all of you reading this in countries other than the US, no matter where, you will recognize some of your favorite American stories and colleagues here.

1)  Open In Canada : "It's the 51st State"

Oh, Canada!  So close, yet so far away.  Yes, much of the population speaks English, but many differences exist, which is why it is a very good training ground for your first new market.  The trick is not to underestimate the degree of difficulty its opening will pose.  Canada has long had regulations in place that purposely make it more of a challenge for its larger neighbor to the south to easily do business over the border.  Besides having a different currency and two legal languages, English and French, which requires all packaging and labeling to be in both languages, there are important demographic and economic differences within the country.

As an example of this, note that  if you are in the meal replacement business, the definition of what constitutes a meal replacement is different from the USA, and food labeling requirements are also different.  Canada's version of the Value Added Tax, GST, is not only levied at the federal level, but most of the provinces have levied their own Gods and Services Taxes too.  This makes invoicing different, and financial reporting as well.  These are just a few of the factors you will consider as you craft your marketing and operations strategies in Canada.

2)  We Can Open 5 European Countries At Once : "It's The United States of Europe, right?"

While it is true that the (mostly) single currency and the European Parliament broadly united many European countries both financially and legally, there has not been the political union similar to that which ties the US together in a federal union.  A simultaneous 5 country openingwould mean 5 separate efforts, which is costly and taxing on the current organization.  

The largest direct selling markets in western Europe are Germany, Italy, UK, France and Spain.  Lest you think that is the right order to open new markets, both market and cultural differences may also dictate where your product has the most chance of success.  A party plan candle company will have stronger sales in the north European markets, for instance, where their tradition of candle burning is strong.  

At the same time, though the Netherlands has a strong candle burning culture, it has very low reception to party plan direct selling, as seen in its culture and its tax laws.  So a variety of factors have to be rated and weighed to determine whether a company should have a physical presence in a market, or decide to simply aim for cross border activity.

3)  Australia Can Be The Hub For An Asia/Pacific Region Opening

Careful when you look at that map.  The time difference from Hong Kong to Sydney is the same as from New York to Los Angeles, but at almost twice the miles.  And the cultural differences between South Korea and Japan, for instance, are vast, with each country having enough differences to require separate management teams as well as separate strategies.  Even the distance and cultural differences between Australia and New Zealand, also English speaking, are enough not to attempt a combined management effort upon opening.  If you talk to an Australian, he will probably say it is easy to open New Zealand from Australia; rarely would you find a New Zealander willing to say the same.

It is true that it is appealing to open Australia as another English speaking market, but when someone first tells you, "don't comb the raw prawn with me", will you know he means not to pull his leg?  And remember, when reviewing international markets' plans by Go To Meeting, you will start your morning on the line with Europe until noon, and then get back on the line at 5-6 pm, to say G'day to your counterpart in Australia, who is already into the next day.  And we're not even considering what happens when there is a technology glitch in Australia during their day and our night.

The challenge and the beauty of opening new markets are precisely their differences; their languages, which reveal their rich traditions; and their desire for the earning opportunity your company offers its citizens.  In the last, at least, we are all the same.

Reader Comments

There are no comments for this journal entry. To create a new comment, use the form below.

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Post:
 
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>
« CEO School: Pursue Your Goals Relentlessly | Main | CEO School: Choose A Bold Mission »