Blue Eyed Sun

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Overcoming the Challenges of Exporting Overseas

Here are the slides from my talk on Exporting Overseas with UKTI at Autumn Fair International today. All of the links and logos in the slides are clickable and the hyperlinks will take you to the respective websites. A video of the talk is embedded below.

Although Blue Eyed Sun has exported to a handful of international customers over the years, it is only since 2012 that the company has begun to focus on overseas expansion. As a result, we’ve distributed to over a dozen new countries in the last two years. Last month I was invited by UKTI (UK Trade & Investment) to speak at Autumn Fair International on the subject of “Exporting Overseas”. I also got to meet our new Minister of State for Trade and Investment, Lord Livingston, at a special lunch during the show. The UKTI have ambitious targets to grow British export over the next few years and can offer businesses great advice on where to get started and how to export. Here’s what I’ve learned so far about export from a card publisher’s perspective.

Firstly, I believe that it’s important to establish yourself and your product well in the UK before you start thinking about exporting abroad. You need to make all of your mistakes here first as they will all be magnified once you start distributing internationally. You also need to be sure that all of your operational systems are strong enough to support the increased volume of business. Do you have enough warehouse space? Can your operations team cope with the extra demand? As margins are greatly reduced when you export there is less room for error. Supply chains lengthen when you work with distributors and you need to be sure that you are a strong link in the chain. You not only let down your distributor when things go wrong, but their agents, retailers and consumers.

The potentially negative impacts on your business include: strain on your cashflow, credit risks on bad debts that are difficult to chase overseas and fluctuations in currencies which can affect your profits if you don’t get paid in Sterling. Some countries have different laws regarding Intellectual Property and you run the risk of being copied abroad. You can also suffer quality control difficulties because of the increased volumes, freight forwarding issues because of third party couriers and miscommunication problems due to language differences. So why do it?

Well the good news is that exporting can also improve your business. The larger volumes and lower margins have forced us to find better ways of doing things in our business. We’ve had access to new markets and sales we otherwise would not have had. Our products are sold across the world which is very exciting and we have met some great business people who have provided fascinating and inspiring insights into how things can be done in the greeting card business. All this whilst growing our business, flying the Great British flag abroad and providing more jobs for people in the UK.

There are a number of ways you can export abroad when starting from scratch. The most popular for UK publishers is to work with a distributor in the specific country. This is helpful as they buy the products outright (at a discount) and assume the risk of selling them and paying for their sales force, freight forwarding costs and warehousing. The advantage of working this way is that you have someone on the ground to take care of the retailers, who speaks the language and understands the nuances of their local market. Alternatives are to sell direct to retailers abroad or to establish a network of sales agents or reps who cover the territory and report directly to you. You take on more risk, but gain more profit if successful.

The best places to identify and target these markets is by reading trade magazines like Progressive Greetings, attending trade shows that are strong for international visitors (Spring Fair and Autumn Fair, PG Live), joining associations like the GCA, contacting the UKTI and networking with other publishers for recommendations or by joining groups on LinkedIn. You can also take advice on international distribution from specialist consultants like Robin Littman.

Remember that you will need help once your export strategy starts to take off. The extra orders will mean more admin and paperwork that needs close attention. Sometimes you will need to alter products to suit different markets and you may have a variety of different logistical requirements that need keeping an eye on. You have to stay on top of your export sales once they start so that they don’t drop off and leave you with dips in turnover. Most importantly you have to keep your eye on UK sales so that current customers don’t suffer with slower lead times because export volumes have ramped up and overloaded your operations.

Once we decided to expand abroad, I hired an assistant to help me with the extra workload. She has done very well within our business and has gone on to become our operations manager. Export has helped our team to become more focussed. It has helped us all improve our communication, time management and delegation skills. Our team has had to raise it’s game and is stronger and better for it. Those that didn’t grow with the business have moved on. We don’t carry anyone anymore as we can’t afford to. Everyone has to pull their weight because the team demands it from one another. This is exciting to be a part of.

Our export strategy has also led to greater sales and improved profits. Because we sell to a number of countries, our company isn’t reliant on any single customer. Instead we have a nice spread of business across a range of retailers and distributors. The product life cycles of our cards have also improved as we extend their lives in new markets. Some of our older best sellers still sell really well abroad because they are relatively new to those markets. This in turn spreads the development cost of these products across a larger number of sales. Production costs are reduced through greater volumes as savings are made on purchases and operational efficiencies. We also have more options for clearing older stock which may have slowed down at the end of it’s product life cycle in the UK.

Since we started distributing we have improved our warehouse layout and stock control systems. The extra space we have had to take on has made it easier to hold better stock quantities for our UK customers. This means improved lead times, which means more order cycles in the year and increased turnover. We’ve also made our marketing more efficient by using the trade shows we attend to regularly catch up with international distributors and develop our business with them. Upgrading to the latest version of Sage software also lets us handle international currencies with ease.

Finally our export strategy has had an effect on how we’re now designing our products. For example, our market leading, embroidered Vintage range was adapted from square to rectangular shape for a German distributor. Because the changes on these adaptations were time consuming we developed a new range called Picnic Time which are much easier to adapt to our distributor’s needs with a new font and a shape suited to his requirements. This new range is up for a Henries Award this year and may not have come about in its current form were it not for our export strategy.

Whilst export does have it’s challenges and was not something that Blue Eyed Sun really started to push until we were ready, it has had many benefits to our business. We’re looking forward to expanding our international sales further this year and working with UKTI for the first time.

Exporting Overseas is one of many subjects covered in the Ladder Club seminars for new publishers organised by Lynn Tait and held in Leigh-on-Sea on the 4th and 5th of November. For details contact Trudi on 01702 480 180 or email waiteandtaitbakery@hotmail.com

Click on the video below to watch my talk and slides together:

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This article features on pages 30-31 of the October edition of Progressive Greetings which you can read online here