Why Private Label or D2C Brands should Go Global?
Congratulations! Yes, you heard that. Congratulations again for building your brand identity for your products in the local market. We understand how much it takes to build a D2C brand and catering to the requirements of the local market. Remember the days when you were discussing about the idea of launching a product and how helpful it will be for your target markets. You would have spoken to several key influencers, did a through market research followed by test marketing of the products in streets or with local retailers. Identifying the HERO products. The working with your manufacturing partners to create the product. Focus on the logo, merchandise packaging, pricing the product, distribution channels, competition, marketing budget. Ufff. Hats off to you and our due respect to such merchandise product owners.
Now that you have a steady business, and figured out the 0-1 story of your brand, what's next? How to grow more revenue? Will you consider adding new product lines? Will you do aggressive marketing? Are you going to find or create new distribution sales channels? Will you go Omni-channel as a brand sales strategy? Will you be adding more team members? I am sure these are the few thoughts hovering in your mind.
While these are the traits of an Infinite player (as Simon Sinek says). Let me outline one outreach program to you through this blog. My suggestion is Why Not Look at going international? Why not find new international markets for your products? Why not repeat the similar things that you did to take your business 0 to 1 in multiple other countries. You see this is a straight jump in your revenue and in number of customers. Aren't they? We are living in a very closed world now. You have the entire pot pouri of an international market in your Palm through the awesome smartphone with high internet access in your hand.
Let us consider these following points why you should take your product global:
Going global acts like a force multiplier. It gives you the boost you were looking for in finding new customers. Similarly as you lose few customers to your brands, here is an opportunity for you to acquire new customers (that too international) to fill the gap of your customer churn.
Margins & Mark Up. Both are a bit different. I would suggest you do a research of both. Although I guess, you know that as you have already created success in your local markets. Thus if you sell your merchandise products or goods in the global markets, there are possibilities of higher margins and sustainable mark ups. Thus a positive NET Realisation in your pricing strategy. There are markets where the margins could be squeezed and there are markets where you can have better margins too. You need to strategise which markets to choose based on your product. (Please note that at NIRYATI, we can help you in choosing the preferred global markets for your products. You may speak with one of our team and explore more ideas about selling your products in the global markets.
Higher disposable income in some international markets gives you the edge to position your product with right pricing strategy to get the optimum returns of your investment. For example countries like USA, UK, Singapore, Germany, France, Dubai, Canada, Australia, Japan has high disposable income group. Now if you could find a market in these countries to position the product right, you will have more profits for the similar products in your local market. And tell me frankly, why would you not want more profits if you are getting it by selling your product to an international audience. Be it offline or through Crossborder eCommerce distribution. And as you are a entrepreneur, I bet you will take that RISK as that is what made you reach so far where you are today.
Become an EXPORTER. Yes, you heard that right. Now as you are no longer serving to local audience and serving global customers you will be considered an Exporter. Every country appreciated exports and there are several schemes that any government encourages with respect to exports. There are several incentive schemes that a merchant can leverage exporting goods to another country. You are no longer a local player instead an international KHILADI (merchant in this case).
A Social status and sense of entitlement creeps in you as you start selling to global markets. Your competitors envy about you. You can always add that to your Brand Slogans that you are in international brand and your products are liked and bought by thousands of customer world wide. Give it a deep thought.
You bank starts looking at you in a different way. Do this go to any bank or your own bank and tell that you are going to sell your goods in international markets and see how they treat you. The FOREX team will come immediately and treat you next to God. Now understand that from a macro economic way too. You bring in foreign remittance to your country by selling products globally. This helps the bank and the government and your country in reducing the Fiscal deficit fo your nation. Any great country becomes great where the focus is more on exports than imports. Moreover you act as an agent in serving your country in enabling foreign currency transactions through your bank.
Keep your risks distributed. While you are selling your products in the local market and doing great, there is always a threat from your local competition along with international sellers trying to enter your local markets. Thus by selling globally in multiple countries you are keeping your risks distributed. For example, say you have a great product and getting amazing sales. However, as the lifecycle of the product comes to it's end there will be other players with similar products with more aggressive pricing trying to disrupt your position in the market. In such case, if you have a global supply chain distribution in place, you will have time to think how to fight or solve the competition in one market while the revenue is being constantly being generated from multiple markets.
Opportunity to travel and sell the world also grow your business globally. Now, I am sure after a great hectic seasonal sales, you would like to take a break and take your family to vacation. May be locally or internationally. Now if you have business in multiple international locations, your vacations turn a great market research opportunity for you to understand the global markets better where your products are already selling well. You could enjoy your amazing cocktails and also understand what the local population is consuming. This will help you to analyse for developing other product lines and also what price will work as you start understanding the local needs.
The fear of seasonality. Most D2C brands depend on seasonality for their sales. They wait for the best seasons to boost up their revenue. However, while having a global supply chain strategy for selling your products you are in a better position to have seasons throughout the year. Just for an analogy, when it is Winter in Northern Hemisphere, it is Summer in the Souther Hemisphere. Now, you need to think my dear friend how you could leverage this seasonality. Also, if you have some dead inventory or stock from the peak season, you can liquidate the same in the peak season in another country. Thus you keep rotating your inventory.
These are a few awesome things in terms of advantages for selling your products in an international market. While there are challenges are problems too in scaling your global business. That is where our team from NIRYATI can help you. We are a Global Supply Chain enabler that aims to solve global expansion and international Go To Market strategy. Please also read out other Blog about Challenges and Problems in Global Supply Chain and how you can overcome them.
PS: I am Dibyendu Ganguly, founder of Niryati. These are my own views after spending over a decade in Crossborder eCommerce, Product Sourcing/Procurement, Contract Manufacturing, building SaaS based tech products and Solving Global Supply Chain problems along with speaking to several customers, brand owners, logistics and 3 PL partners, sales agencies, and online marketplaces both in India and international markets. You can reach out to me over Linkedin or drop a contact message here for a consultation with me. I will be happy to assist you.