In the fourth story in our Monster Moto series, UPS experts outline five ways to reach international markets, both big and small.
For small businesses, crossing international borders can equal new customers and profits. But before trying to tap into additional markets, you need to first get it right at home, says Monster Moto CEO Alexander J. Keechle. "That's what differentiates us from our competitors. We pride ourselves on making sure that if there is ever an issue with one of our products, the customer can get service."
Yet, while Monster Moto was finding success domestically with its new, 100,000-square-foot manufacturing facility in Ruston, La., and 600 service centers across the United States, the small business knew it was time to expand. The first stop to export its high-quality but affordable minibikes and go-karts? Our neighbors to the north.
"Canada represents a controllable market that Monster Moto can handle in terms of size and population," says Keechle. Although he acknowledges that there are some logistical and regulatory hurdles to jump, there's room to grow. Plus, the language barrier is practically non-existent.
If you're thinking about becoming a major North American company like Monster Moto did, take stock of these international expansion tips from Keechle.
1. Gauge your ability to execute. Before you target a country, start with the end user in mind. That means having trusted partners who understand your market niche, the back end of your business and how to retail your products. "Since service is paramount to our business, prior to exploring a new market, we always think about if something were to happen with the product, how do you service it?" says Keechle.
2. Select the right distribution partner. Location and capabilities are key. To find Canadian distributors, Monster Moto purchased data that identified service centers within 12 to 20 miles of the customers' homes that had small-engine repair capabilities, such as power-sports dealers. "If you can repair a 4-horsepower power washer, believe it or not, you can repair a 2.5-horsepower minibike," explains Keechle. "Choose partners with solid technical expertise who will treat your customers honestly and ethically."
3. Decide which solutions to outsource. Complex trade regulations and logistics can be difficult, if not foolish, to tackle yourself. "Having outside counsel and accountants who know international import-export business practices is key," says Keechle. "Trade legislation, customs, tariffs and licensing issues are a small smattering of problems we face when we expand. That's one of the reasons we partnered with UPS. As they cross a myriad of businesses, UPS either knows the answer or knows whom to ask. This dramatically cuts down on the execution time a small business would face."
4. Position the company to hit big markets. If you're going to collect revenue, have a plan to process it. To better position themselves for expansion into markets such as Canada and Mexico, managers must focus on internal governance and controls. "Make sure that whatever accounting and finance software you have, it's a great module for a multinational corporation," says Keechle. While it's great to have a business abroad, once the orders start flowing, how will you process them? "In Canada, for example, there are provincial taxes, electronic payment services for small and medium-sized businesses, and if you sell to a retailer, you get rebates."
5. Don't forget the small markets. Asking the right questions can help a small business determine the footprint for international expansion. Keechle says Monster Moto would love to do business in smaller countries like the Dominican Republic. "I love doing trade with other countries because that opens up the lines of communication and breaks down preconceived notions between nations," he says. And it's just good business. "Right now, our product is an off-road product. If we made some changes to the minibike, could it be street legal or viewed as a source of transportation?"
For Monster Moto, being an international company is a twofold endeavor: "We're creating awesome jobs for families and we're creating a product that allows families to integrate and have fun," says Keechle. It's a good feeling knowing your product is creating happiness around the world.
For a closer look at Monster Moto and its plans to take advantage of the global marketplace, watch "Exporting fun, all around the world" in the Monster Moto video series.