You’re a growing business ready to expand and sell internationally - great news! To get off to the best start and gain the confidence for success execution, you need a concrete go-to-market strategy. In this, here’s what you need to consider and understand:

New countries: The region to expand in and the target country to start with.

Local regulation: All local regulatory laws, IP advice for exporting and other factors such as custom duties, tax, etc.

Product lines: Your product lines to launch in the new target market. A deep understanding of the country’s culture and market trends is helpful in determining the best products to sell and any necessary IP adjustments needed.

Your brand: The brand to sell your products under in this new environment. For example, will you retain the existing brand or create a new one for the channels in the new market, i.e marketplace or direct to business or consumer?

Customers: Any target niche to sell to, any cultural/local market practices, and the best way to engage overseas customers on social media platforms.

Cash position: How much you are prepared to spend for expansion and how to protect your balance sheet when exporting abroad and receiving income in a different currency.

Choosing your overseas market with confidence

Choosing the next target country for expansion can feel overwhelming because of the many different considerations to factor in. This includes the market of target customers, the local language, its macroeconomics and the ease of doing business and setting up there.

Let’s use the example of a successful Amazon toy seller in the UK who wants to expand further into Europe. After extensive research, the business owner comes to the conclusion that Germany is the best market to start with. They found that the overall German toy market is growing and that more young parents are buying toys the business already sells. The business owner also finds that with an Amazon Europe account, they can easily expand beyond the UK to Amazon DE (Germany). To add, their research showed that Amazon DE was the top online store for the Toys and Baby segment followed by Otto.de and mytoys.de in Germany.

Various factors were considered and researched allowing the business owner to come up with a go-to-market strategy.

• Expand the business to sell to Germany via on Amazon.de.
• Once successful, to set up and sell on Otto.de and mytoys.de.

Expanding international operations to sell in a new market

Moving into the operational side of expansion, it’s key that businesses have in place smooth procedures that cover the multitude of bases, such as market testing, storage and tax.

Using the same example as before, currently the UK business has several manufacturers in China and imports roughly 200,000 units of toys per year totalling a cost of $1m per year.

In order to expand to Germany, the business wants to take the top product lines and first test the market. They negotiate with one Chinese supplier to add 20,000 units for $100,000; the same cost per unit rate. As part of negotiations, the business is continuing to use a freight forwarder so that once the goods have been produced, they will be loaded onto containers and shipped accordingly.

In the UK, the business has an account with UK customs and their own warehouse. However as there is not much presence in Europe today, slightly different plans need to be implemented. After looking at the best way forward, the business:

• Registers with the Hamburg Port Authority in Germany (the largest German port for e-commerce) and ensures that all commercial invoices are up to date to avoid goods being held up at the port.
• Ensures that they have the licence agreements to sell in Germany with specialist IP and Trademark lawyers.
• Sets up a virtual warehouse with Byrd, an e-fulfillment partner in Germany. It specialises in storage, packing and shipping units that are received from the port and then distributes them to Amazon Germany warehouses for Prime fulfilment.
• Creates an account with Avask, tax compliance experts, and appoints them as a tax agent to handle all tax-related issues when selling in Germany.
• Registers for a multi-currency account allowing them to receive revenue into a local EUR bank account.