Setting Up Shop Internationally

When the web first came along, companies were excited by the international possibilities. Now instead of spending millions to open up international branches, a company could open up a website to everyone in the world at once.

Now, of course, we know it's not that easy. But what we also know is that the web can enable amazing international efficiencies as well as bringing in global customers. And with technology and communication costs at an all-time low, it's no longer just a possibility for big business alone. Considering your own global initiative? This week we've asked Antoine Toffa, CEO of import/export consultancy TamTam to give us his advice on setting up shop internationally.

Understand Your Own Global Possibilities

One of the biggest hurdles to taking a company international, as Toffa tells it, is a psychological one. Business decision-makers don't understand international markets and are fearful, or they don't realize their businesses could do well overseas.

"Larger companies have basically lost their advantage in going international because of technology. The phone is cheaper. Communication costs are down. You have the advent of the fax in the early '80s and then of the Internet in the '90s and especially now in the 2000s. It has taken twenty or thirty years, but now small and medium-sized enterprises can actually compete internationally the same way the larger enterprises do," he says. Even the smallest companies can afford phones, fax machines and net access. And with transportation costs dropping, easy delivery is within reach. "A lot of people don't know that you can send a pound package from the US to the UK for about $8, flat rate, using the US Postal Service for instance," he says. "If you look at companies from FedEx, to DHL, to UPS, to other services like these, the possibility of sending information or products internationally is now much cheaper than before. Also the rates that the various international shippers have charged have declined as well because the price of energy has been fairly stable over the last twenty years." The barrier costs have dropped precipitously, leaving room for smaller companies willing to run the international gauntlet.

Calculate Your Unique Selling Proposition

Once you've crunched the numbers, you'll wa/nt to consider just what it is you intend to sell overseas, and how. What will be your gimme for international customers?

"What are the differentiating advantages of that product? Is it price, is it quality, is it delivery time? Is it the fact that these are unique products that cannot be found anywhere?" asks Toffa. "Once the company really understands this, then we can get to the first phase of a study, which is international market research." That market research includes sussing out the proper market, distribution channels, pricing system and competition, and it's not easy - but it's necessary.

"Most companies that are very serious about going international do their homework," says Toffa and if you're smart, you'll be willing to do it too.

Use the Web for International Market Research

Market research is expensive and many small companies can't afford to hire consultants. Luckily for them, the web can be a great help, revealing both information about competitors and helpful data for those looking to shave dollars off their own bottomlines. "The web is a fantastic medium for international trade and international business. It is a natural way to extend your market. It is a natural way to find better sources for your products and cheaper sources for your products," Toffa says.

"One way to use the web is to collect a lot of information and do a lot of shopping by doing price comparisons. The web allows you to arbitrage and decide whether a source is better from Yugoslavia or from South Africa. That information will allow you to gain a lot of time in an import situation," she says.

And that's good news - because a small company needs all the help it can get. The web has put international possibilities into the hands of almost every businessperson. Don't miss the opportunity to open up your business to the millions worldwide that might just be your customers tomorrow.