Thinking Of International Expansion?

Posted on November 4th, 2019 by Sheena Tejeda, COO, Direct Selling Women's Alliance

Are you thinking about international expansion?

No doubt, there’s opportunity for growth, particularly in emerging markets in Latin America, Asia and Europe and yet there is a lot to consider!

The data from the Direct Selling Association shows that of $190 billion in worldwide sales in 2017, only 18% of that number came from sales in the United States.

But, before you take the big step, make sure you’re ready for the trip.

Just like you wouldn’t take a vacation to another country without making sure you had your passport and other documentation in order and did some research on the country you planned to visit, the same is true for expanding your business to international markets – do your research first and be prepared for the adventure.

Choose the Best Country For Your International Expansion

Location, Location, Location

How do you make the best choice in identifying the country or countries for your initial expansion to international markets?

This choice is one of the most critical to ensuring your success.

Some things to look at are the potential market share for your product in the country, the current economic and political climate for businesses, and legal and regulatory issues that may affect your business model or product.

Another key issue when considering expansion, is how you will monitor the expansion and growth in the market? Obviously, it’s much easier and less costly to monitor operations in Canada or Mexico than making a trip to India or Russia to keep tabs on how the market is developing.

Although the internet may allow you to dip your toe in the water without the financing required in the past, there’s no substitute for a hands-on inspection from time to time. Whether your operating from a corporate office in the market or working with a licensee, it’s important to keep tabs on how your company and brand is being marketed and represented in the country.

Currency Issues

Show Me The Money… Another critical factor to consider is payment solutions and currency exchange rates.

How will you collect payment for your products and how will you pay your sales force? Is credit card a preferred payment method in the potential market or do consumers prefer to pay with cash. This issue is particularly important if your company relies heavily on “auto-ship” as part of its business model. It may be necessary at times to implement a special compensation plan “fix” for large currency fluctuations, like those we’ve seen over the past couple of years.

Balancing the price of the product for the marketplace and ensuring that the payout in the compensation plan is enough to attract distributors are key factors.

Communicating with Consumers & Team

Gracias, Merci, Domo arigato

Do most people in the market you’re considering speak English as a primary language? If that’s the case, such as Canada, UK or even the Netherlands, great; if not, giving close consideration to the language issue is very important.

It’s difficult to develop and increase sales revenue and grow your business if you’re unable to effectively communicate with the consumers and the direct sales distributors in the field.

If translation is necessary, you could be looking at a significant financial investment to translate your product labels, website and all of your sales and marketing materials to multiple foreign languages, not to mention the continued updating that’s required.

Of course, there are many additional issues to consider prior to moving forward with international expansion of your business and the above are just a few key points to consider.

It’s important that your company plan ahead for expansion and consult closely with your legal and finance team, as well as experts who have experience in bringing direct sales companies to international markets. As with many things, the devil is in the details.

Reach out to us for consultation when you consider your international expansion!

About the Author

Sheena Tejeda is the Chief Operating Officer of the DSWA. Her foundation in business combined with direct selling experience overseeing the domestic and international operations, gives her a unique perspective and ability to work with direct selling companies during their start-up phase, growing their business to the next level and/or expanding to international markets.