Top five facilitators to working internationally were: a website, the ability to take payments online, an agent on the ground, social media, and garnering advice from experts.
The US is the most attractive market to UK companies, with more than half of SMEs exporting to the Land of Opportunity.
According to research commissioned by Barclays Business over the summer of 2014, around a third of businesses max out their domestic market potential within three years, causing them to look further afield. The US is the most popular destination, ahead of any European country, with 55 per cent of SMEs exporting there.
The same study found that the top five facilitators to working internationally were: a website, the ability to take payments online, an agent on the ground, social media, and garnering advice from experts.
With that in mind, we spoke to a range of business owners and experts to see what to do—and not do—to successfully export to the US.
Neil Flatley is managing director of Linzi Jay Bridal, which found success in the US after the company’s barefoot sandals proved a hit on Pinterest.
“Do speak to people who are already trading with the States. I spoke to some solicitor friends and asked if they had any clients who were exporting to the US. I called them all, even if they had a completely different product. Some were more helpful than others, and sometimes pieces of advice conflicted. But it was very worthwhile, most people were happy to help and I learned a lot.
Don’t expect overnight success. Even if you have a product that the Americans want, there are still a lot of processes that need to be undertaken before anything can come to fruition. For example, it can take almost three months just to set up a bank account. Bare this in mind before diving into any sales agreements.”
Andrew Woolley, executive director of international payments at foreign exchange specialist Moneycorp, warns against overlooking the costs of currency.
“Do consider the impact of currency volatility on your business. One of the first things an exporting business should do is gain a good understanding of the currency volatility of the country they are exporting to. When trading with the US, the GBP to USD rate varied from 1.7190 to 1.5854 this year, and even the smallest of currency fluctuations can affect margins.
Don’t get caught by unforeseen costs. Many businesses are unaware that by using banks they could be charged twice for a single transaction—by both the US and UK banks. A foreign exchange specialist will only charge once and offer expert advice around products such as forward-contracts, which allow a business to lock-in an exchange rate for a period of time ranging from three months to two years.”
Sonny Smith-Hughes runs The Vintage Pattern Shop on eBay, sourcing sewing patterns from around the world.
“Do give the customer a great shopping experience. For the American consumer, the buying experience is important, no matter how small or large. I also make the most of my ‘Britishness’ in my communication to them, which they love and trust.
Don’t shy away from dealing with complaints. In the US there is no quibbling in the stores when you return an item, they are strict and fair with their return policies and so they very much expect that from everywhere else in the world. If there was ever a problem, I offer service recovery in the form of credit for my shop. They are so appreciative of this and I do not lose them as loyal customers.”
Peter Fitzgerald is UK country sales director at Google, which produces detailed export maps giving insight into overseas markets.
“Do use search data to understand your niche. For example, find customers looking for your products with not too much competition by city and by state. Be aware that targeting in Chinese and Spanish languages in the US can be effective as well. Look to experiment on relevant online marketplaces as that will bring a good volume of sales. With an e-commerce presence players can internationalise much more quickly.
Don’t rely on hunches about customers abroad. Instead, use data analytics tools and analyst research to understand consumer behaviour as it changes. This will enable you to make the necessary adaptations—whether this be to your site, product, marketing or pricing, but also keep your finger on the pulse in terms of market changes.”
Steve Wilson is a partner at law firm Osborne Clarke which has offices on both sides of the Atlantic.
“Do know your market. Not only does that mean it’s necessary to identify your customers’ needs, but also what the local laws and regulations are regarding the items you’re importing into the US. The US is a relatively open market, but there are trade laws as well as licensing requirements which vary on a state by state basis.
Don’t be put off by paperwork. Consumer protection laws and data protection will seem very flexible for European sellers who are used to complying with more stringent regulations. Similarly, if local employees are to be hired to deal with the sales, the US ‘employment at will’ status provides an opportunity to flex your workforce as your needs require.”
Murray Lambell, director of cross border trade at eBay Europe, says that with more than 95 per cent of British businesses on eBay (both big and small) exporting around the world we’re in the age of the ‘micro-multinational’.
“Do take advantage of cool Britannia. The UK has an excellent reputation around the world when it comes to retail. UK brands and businesses are held in high esteem, so use this to your advantage. Make it clear where you’re based and capitalise on selling the best of British.
Don’t dismiss mobile. Forty per cent of eBay transactions globally are touched by mobile at some point in the transaction. When it comes to the sales, the Americans love to grab a deal on their mobiles.”
George Willis, Managing Director, UK, Ireland and the Nordics, UPS, says that despite the competitive business environment, there are substantial growth opportunities for UK SMEs in international markets—in fact, UK SMEs are significantly outperforming other European countries in growth through exports.
“Do stay customer focussed. A recent UPS survey has found that UK SMEs exporting outside of the EU can outstrip the competition in increasing turnover, but becoming a successful multinational is reliant on building a consistent and loyal customer base. Key to this is offering convenience and choice, whether that be through flexible delivery solutions, or using a single carrier to ensure an uninterrupted supply chain, so that your customers can safely receive their product, wherever they are.
Don’t be overwhelmed by the paperwork! UPS research has found that perceived costs and regulatory barriers are acting as barriers to international growth for UK SMEs. At times, the paperwork in new markets can seem overwhelming, so use the plentiful resources available—from UKTI—to UPS’s own Export Guides to navigate the sometimes complex regulatory environment.”