How Does the U.S. Market Fit Into Your Growth Strategy? Why Have You Choosen the U.S.?
The $10 trillion U.S. Consumer Market continues to be one of the largest and most diverse in the world. To get your product into this huge market your team needs to dedicate resources, (time and money) to the project. U.S. distribution is complicated and unlike distribution in other markets (countries). If you have chosen to be in the U.S. market you need to be prepared for the necessary steps and costs involved. You need to understand the misconceptions about getting product into the U.S. versus the reality of succeeding in this lucrative market.
Are you ready to export to the U.S.? What’s your "pitch"? What’s your market position – value proposition? What’s your program? Who are your partners ? Where do you "fit"?
Challenge to Get to Market
To get into U.S. distribution your products first have to prove themselves at some level before they will attract the attention of a major distributor or buyer. To prove themselves, consumer products need placement on a retail shelf, need to prove their ability to be purchased, and most importantly need to demonstrate their ability to be re-purchased. Commercial / industrial products need to be evaluated / approved by qualified buyers. None of this can happen without a marketing campaign that clearly states and effectively delivers a value proposition for your products. The CBEX Process addresses these challenges. There are no shortcuts.
Typically there are two ways to implement a product launch – through a dedicated U.S. sales force or through commission-only sales agents or distributors. The downside to having a U.S. dedicated sales force is the high fixed cost – salaries, office, and expenses - with the upside a sustained sales / marketing effort solely focused on your product. The upside of commission-only agents is the reduction in fixed costs and a minimum in hands-on support. The downside to commission-only agents is that if sales do not happen quickly or at expected levels, agents will switch their attention to other companies products in their portfolio that are easier to sell. In almost all cases with new products a sustained program over a long period of time is required to reach critical mass. In all cases full support for advertising, incentives, samples, etc. will be required. You will not succeed without it.
Some Misconceptions About the U.S. Market
- Distributors are the answer - 98% of consumer & industrial products that make it into U.S. distribution never produce any significant revenue for the manufacturer.
- The quality of your product assures your success – quality is only relative to your product’s position in the market. If it’s too good it may not sell.
- Contacting distributors and sending samples is an efficient way to break into the market – distributors hardly ever discourage sampling. Their motivation is not to sell your product. They are in the logistics business. Distributors don’t typically market products.
- Sales reps & trade shows are necessary to launch your U.S. program – sales reps should be approached cautiously - never exhibit at a trade show until you have distribution