Entering a new market – alone or with a partner? Business Units, a good compromise
People looking to enter new markets almost always ask the same question: should I take the reins myself or would it be better to call in the help of a sales partner?
Having your own company offers several advantages, as you have full control over the market, you learn about the market through direct experience, get to have more intimate and direct relationships with customers, and are able to avoid losing profits via dealer’s margins. However, this approach requires high investment costs and extensive management efforts, making it a rather unreasonable option in the early years of such a project for most.
Handling distribution via an importer or distributor can help you gain faster access to the market. Management costs are rather low. Distributors are integrated directly into your own sales organization. Of course, on the other hand, those distributors want to make money, too. This usually means saying goodbye to 20-30% of your total revenue gained. Such high trader margins leave you unable to compete with the prices offered by companies with a more direct market presence. You also have less access to your customers, and the distributor may withhold certain information from their principal investor as they see fit.
A good compromise is to set-up a business unit in a trade organization. For example, Sanet Trade & Services provides business units to European manufacturers for a fixed fee, offering market support for sales and customer service in the form of single-employee or multiple-employee agencies. The service fee is in place of a trader margin. You will have a staff member working exclusively for your European company who will act as a window to you, the principal investor and will always be close by your side. There are no associated processing or company fees. All costs are transparent and up front.
Free on-site consultation – we come to you! Between 30th October and 14th November 2019, the Sanet founder and chairman will be available for free on-site initial consultations in D-A-CH countries (Germany, Austria and Switzerland). Please send us an email at firstname.lastname@example.org if you are interested. We will then contact you so that we can schedule a meeting at your office.
You made new contacts at a trade fair – what’s next?
Surely you have seen it, too: numerous importers come introduce themselves and attempt to gain your business. They are all, of course, the “best in the country”. They know the market, their companies grow quickly, and they have a very esteemed reputation. Sometimes they even turn out to be nice people. But can you really believe any of it? Or are they just salespeople desperate for new clients to represent?
In the case of Thailand, Sanet offers you tools to help determine the truth. For a relatively small fee, you can receive a basic analysis of a company containing answers to important questions such as: is the company profitable? Are its profits and revenues growing? Does it have enough capital and liquidity to finance your cooperation? Who are the shareholders and decision makers?
On top of that, Sanet also offers more extensive analysis options which include client lists, staffing capacity, service provisions and even a look at a company’s reputation on the market, depending on your needs.
If you need more information before making your decision, just contact us at email@example.com and we will get back to you with an offer.
“Experienced captains know how important it is to have a guide on board when navigating treacherous waters or entering new harbors.”
The Sanet ASEAN ADVISORS are here to provide you with the guidance you need for Thailand and Southeast Asia.
Assessing market potential in Thailand – will entering the market be worth it?
Taking over new markets requires professionalism and costs money. Whether you are looking for a sales partner, trying to establish a company or get your “guy on the ground” active on the market, it is important that the results are worth the costs and effort.
Sanet’s “Bird’s Eye Analysis”, for example, provides important information on your sales chances in your new target market of Thailand. Some examples:
A list of the top 10 local manufacturers/competitors in your target market with data on sales, growth, capital and primary customers
Information regarding the setup of your biggest international competitors. How are they structured? Do they have their own company or do they purchase via a trader? Who are their buyers?
Who are the top 10 distributors for your products? How are their sales figures and which other companies do they represent?
How do the overall market numbers look? How high are the import and export rates of the products which you intend to deliver? What are some of the market tendencies, trends, and deciding factors to be aware of? What kind of prognosis is there for my market segment?
If need be, we will be happy to provide you more data beyond that listed above. Nevertheless, these initial findings will help your sales management team to get a better idea of your chances of a successful market entry and the potential risks incorporated with your investment. If I am able to accurately compare my competitor’s numbers and business with those of my own company, it already saves me a lot of time and effort in making many important decisions.