Selling to markets outside North America
by CanadianManufacturing.com Staff
Exporting tips for Canadian manufacturers
ELORA, ONT.: When it comes to doing business, Canadians are honest, funny, and reliable.
At least that’s the impression we leave on trading partners outside of North America, says Dave Archer, president of International Business Trainers.
The Barrie, Ont. organization trains companies on selling outside of Canada.
Archer, who has worked with businesses in more than 38 countries, says Canadians have a reputation abroad for being too quick in business dealings.
“We want to get an answer in the first meeting and figure out the details later. That makes some people nervous because many cultures, in places like Asia, want to take the time to get to know and trust you before doing business,” Archer says.
Knowing about the culture of the country you’re trying to sell in is crucial to succeeding in the market, advises Archer, who spoke at a recent conference hosted by the Canadian Tooling and Machining Association.
While businesses that are still feeling the effects of the downturn may be hesitant to take on a new challenge, Archer says now is the right time to look outside of Canada and the US, especially to emerging markets like China and India, where there’s an increased demand for products and services.
He points out the world market is 40 times bigger than Canada’s.
“We’d be crazy not to go out there.”
How to start
Before getting started, companies should be able to pinpoint their competitive edge in a foreign market.
That might seem tricky for businesses in Canada, where it can cost more in labour to produce the same good overseas.
“But if you can show using hard numbers why it pays to spend more money upfront rather than try to compete on price alone, you have a better chance of getting the customer,” Archer says.
He recalls one deal in Mexico with a company that was interested in buying a DC power rectifier. The Canadian machine was $14,000 more expensive than what the company could’ve bought locally.
“On the surface, it looked like they could either spend $20,000 or $6,000 but ours used 10 per cent less electricity, so I showed them how in 28 months, ours would start putting 500 bucks in their pocket with energy savings,” he recalls.
Move in for the kill
Archer says there are specific steps to approaching the customer:
- Start with an initial phone call in their language
- Email a one sheet attachment describing your product or service (never go longer)
- Follow up with a phone call
- Tell them you’re planning to visit and listen carefully for feedback and interest
- Determine if you can do business together and whether you should make the trip.
Archer says many Canadian companies aren’t exporting because they’re afraid of the risks that come along with doing business in other countries.
“They’re thinking I’m going to get robbed in Mexico or a Chinese company will steal my intellectual property,” he says.
Companies can minimize risks by knowing and tracking their costs, using export credit insurance or trade finance, and talking with other North American businesses that are familiar with the markets.
“Yes, there are risks, but there’s always a level of risk with any business, even in Canada,” Archer says.
Indeed, limiting oneself to the Canadian market could be a risk in itself.