Subscribe to Advertising & Marketing Review!
Contact Ken Custer at 303-277-9840.
e Is for Exports
by Danielle Kriz Office of Computers &Business Equipment,Trade Development
EPoxy Industries is a world
leader in the adhesives industry,
helping to build
bridges, buildings, stadiums
and airports. When it came to the
Internet, though, EPoxy used to be
just another small manufacturer relying
on a singleline dialup account and
one email box for 15 employees.
Built on innovation, the Albany, NY,
firm was convinced that it could benefit,
particularly in its work with international
clients, from the innovations
that were making the Internet an essential
business tool.
The firm turned to IBM and its Small
Business WebConnections for help, and
watched international sales jump 23
percent. IBM provided Eproxy with an
intranet, website, Internet access and
email for its employees, all hosted by
the vendor so the firm did not need
dedicated IT staff. Individual email
accounts proved to be a significant step
forward for this small company.
"It can be very difficult to stay in close
contact with someone who is overseas,
but communication is essential to
keeping our business running smoothly,"
says Joel Dzekciorius, manager of
engineering for EPoxy Industries.
Email helps companies avoid problems
associated with international calls, such
as costs, time differences and poor
lines, and enables the exchange of complex
documents, like AutoCAD drawings.
ÒWe're able to provide much better
service now for customers in different
time zones,Ó says Dzekciorius.
Small U.S. businesses are rapidly
embracing the benefits of Internet
technology. An estimated 70 percent of
small businesses are online, almost 40
percent now have a web presence and
about 3 million are doing business over
the Internet.
When it comes to international markets,
however, many small U.S. firms
are missing out on potentially big
opportunities. Forrester Research discovered
that, thanks to the global reach
of the Internet, a typical U.S. company
can expect 30 percent of its web traffic
to come from overseas, starting on the
day its website goes live. It can also
expect 10 percent of its orders to come
from abroad. However, nearly half the
international orders received by U.S.
companies go unfilled, according to
the Forrester survey.
By not further utilizing technology in
exporting, these U.S. firms are turning
their backs on a huge potential market
and may even lose market share as some
transactions migrate online or overseas
competitors harness the Internet to
compete in core markets.
To some, exporting may seem like just
another overhyped distraction, but the
diversified revenue stream and greater
profit margins that it provides can
come in handy if the U.S. market takes
a downturn. Research also shows that
exporters enjoy, on average, faster
sales growth and employment gains
than nonexporting companies.
Workers are happier, too, as wages for
employees in jobs supported by exports
are about 15 percent higher than the
national average.
The Internet is making exporting more
accessible to smaller companies because
it is a tool that extends a company's market
reach without detracting from core
clients in home markets. And, it isn't
necessary to be a world leader with a roster
of international clients, like EPoxy
Industries, to see some returns. The following
are just some of the ways that
companies are using the Internet to support
their international business goals.
First, the Internet is a great and improving
source of research. Most early stage
homework, such as learning exporting
basics and conducting market research,
can now be done online. Many Federal
and state agencies have websites loaded
with howto information, market
research, country specifics, events and
contacts that will help any firm get oriented
towards exporting. The only
drawback is the need to sort through
the abundance of available information.
Second, the Internet is playing an
increasingly valuable role in generating
contacts that might lead to direct sales.
For many smaller companies, joining a
virtual trade show (such as the
Department of Commerce's eexpo), an
online exchange or a vertical hub may
lead to useful contacts, and offer an easy
and inexpensive first step into the international
arena. Many of the hubs do not
target international buyers, but they
generate surprising results that can provide useful international experience for
beginning exporters.
For example, VerticalNet, a pioneer of
the business-to-business vertical mar-ketplace
model, began tracking coun-try
domains of its users and discovered
that nearly half the visitors to its 56
vertical industry sites came from out-side
the United States, even though the
company did nothing to attract those
visitors. Although VerticalNet does not
track resulting sales, no doubt many of
these international hits came from
businesses looking for U.S. suppliers,
widely renowned for high quality and
competitive prices.
Other sites play a very direct match-making
role. Exintel.com is a business-to-
business marketplace for Latin
American companies that want to pur-chase
industrial spare parts and equip-ment
from suppliers in North America.
Increasingly, in the business-to-con-sumer
segment, new shopping sites can
broaden a company's international expo-sure
and generate sales. US-Style.com
launched an online community-based
shopping mall, targeting Japanese con-sumers,
who are seeking U.S. goods and
services. The site is written in Japanese
and features a Japanese user interface and
customized versions of select U.S. retail-ers'
existing websites.
Despite greater exposure such sites, in
many cases, leave the details of export-ing,
including pricing, documentation,
financing and shipping, to the seller.
Fortunately, a growing number of inter-national
trade portals have emerged
that provide extensive information on
the services available to help small busi-nesses
export successfully.
Once a firm has a few international
clients, a more proactive approach, using
the Internet to attract and service over-seas
prospects, is worth considering.
Steps include "internationalizing" the
company website by translating core con-tent
and including local content, and by
adding multi-currency pricing and total
delivered costs (which take into account
duties, taxes and shipping costs).
These steps can be accomplished by
working with a specialist that helps firms
integrate additional features into its
website. For example, PC vendor
TigerDirect.com was having problems
with shipping across borders and quot-ing
total delivered costs to a growing
international clientele. The company
worked with From2.com to create a new
venture, TigerExport.com, that handles
international orders for the Miami-based
firm, greatly enhancing the company's
services to international customers.
As global business grows, some firms
may find an overseas presence is the
most logical next step. The high level
of interest in their products from out-side
the United States prompted
VerticalNet to map out its own global
strategy, and the information it gath-ered
by tracking domain names led it
to concentrate its efforts in Europe and
Japan. To launch the new operations,
VerticalNet partnered with British
Telecom and the Internet Capital
Group in Europe, and with Softbank
Commerce Corp. in Japan.
GetThere.com, a business-to-business
travel website, recently opened a London
office. It expanded mostly to meet the
needs of U.S. multinational clients who
wanted their overseas offices to use the
same services as their headquarters. Since
Europeans rely much more on ferries
and trains for business travel,
GetThere.com found it needed to be
closer to its client base to be effective,
leading to the new office.
Well known online pioneers such as
Amazon.com, eBay and Yahoo have
used varying approaches, such as part-nerships,
acquisitions and wholly
owned subsidiaries, to expand into
overseas markets.
Once a firm turns to establishing a
physical presence overseas, the Internet
may play a less central role in generat-ing
international sales. Yet, it will still
be an important part of a firm's busi-ness
strategy because of its ability to
facilitate communication between dis-tant
offices, information sharing and a
consistent global message.
