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The previous three chapters detailed Eric Savage's experience in a global business mode. The same basic techniques that Eric employed to expand Neo-Tech's business globally can also be employed by almost anyone to almost any kind of business.
For example, how can a salaried working man who does not own a company capitalize on the immense opportunity of global business? Consider what Eric did soon after becoming involved in international marketing. Eric realized that there are many small and medium sized American businesses that produce very good products. And those products can be sold successfully abroad. But, most small and medium sized companies are uninterested in international marketing. This is even true of many large companies.
Since international marketing proved profitable for Neo-Tech Publishing right from the start, Eric decided to try marketing other publishers' books abroad along with Neo-Tech's books. Thus, Eric selected out two small publishers that published unique books he felt could be successfully marketed abroad. Eric then wrote those two publishers an integrated letter. Eric explained in his letter how his focus was on international marketing and that he had the expertise and contacts abroad to successfully market their products overseas. Eric went on to explain to those two publishers that he could act as an international distributor for them and sell a good number of their books abroad each year. Such international sales would represent cream profits as those publishers would not have to invest any time, money, or manpower to get those sales. Eric would simply buy their books at a distributor's discount and then market them abroad. Eric sent his letter to those two American publishers. Both quickly agreed to let Eric distribute their products internationally.
Any individual can form his own company and take a similar approach toward any kind of product or business. All one needs to do is print up some letterhead with a company name on it, e.g., Smith's Global Marketing, and begin approaching companies as an international distributor.
The point is that there are a lot of successful American products that can be sold abroad. Some of these products can sell in mass markets; others can sell in niche markets. And this is where the little guy can ricochet off the tremendous opportunity of the global market. So many American businesses, particularly small to medium sized businesses, are restricted with a single-nation outlook. They do not consider taking their businesses international. But, if a product or service succeeds in America, chances are very high that that same product or service will succeed abroad. For, America has the most competitive consumer market in the world. Products that make it in the American market are almost guaranteed to make it in foreign markets. That is why golden opportunity awaits the international man.
The concept of international distribution also works in reverse. A person can go overseas, spot unique, good-selling products or services, and then come back and market them in America. The beauty of such dynamics is that all the capital and overhead required for developing and learning to market a successful product has already been paid for. As an international distributor, a person can simply search out products or services that are already successful and then bring them to virgin markets.
Whether a person represents an established business setting up a separate operations to pursue overseas opportunities or an independent distributor seeking successful products from other companies to market overseas, that person can immediately leverage off all of the resources that a domestic business has put into developing, producing and marketing a successful product.
On the other hand, the smaller and more isolated a country's economy is the fewer local competitors, if any, will exist. In addition, consumers in small or remote countries often do not have a wide variety of products on which to spend their money. If they have the opportunity to buy a first-rate product from a major country, they will often jump at it.
Eric learned this at Neo-Tech Publishing. Some of the best-responding markets for Neo-Tech were in little, remote economies like Costa Rica, New Zealand, Papua New Guinea, Malaysia. Thus, when marketing overseas, an entrepreneur should be sure to test little and remote countries like Singapore, Malaysia, New Zealand, South Africa, even Papua New Guinea and Paraguay.
An American product, for example, will usually receive a stronger response in Switzerland than in Germany. The large German market is full of competing local goods. But, Switzerland, being a small country, has fewer locally-made goods. Thus, Swiss consumers are more responsive to foreign products. Likewise, Australia, being a relatively small and isolated market, is usually a much higher-responding market for American products than Canada or England. The same holds true for affluent, yet small and relatively remote countries like Singapore and Malaysia.
Even poor, third-world countries like Costa Rica, Paraguay, or Papua New Guinea can be very responsive niche markets for products. Every country, no matter how poor or remote, still contains many affluent consumers. Businessmen in Costa Rica, Paraguay and Papua New Guinea are, percentage-wise, Neo-Tech's strongest responding customers. The response rates are very profitable in such small, remote countries.
Of course, a business should always push into the major markets as well, even if this amounts to just token business at first. With time, competitive benefits will begin accruing. Experience and contacts will gradually be acquired. Eventually, business in those markets will begin to blossom as one learns how to pry open opportunities and work around obstacles.
This sounded good, so Eric tried it. He agreed to work with a U.K. distributor instead of trying to market Neo-Tech's books in England himself. Eric tried a similar set-up in France, Australia, and Venezuela. But those set-ups never worked out. Neo-Tech Publishing always had to stop working with local distributors to instead continue marketing its products overseas itself. There are several reasons for this.
First, no one understands a product better than its originating company. Therefore, a third-party distributor in a foreign country will almost always be less effective at selling a product than the originating company. A foreign distributor can obtain advantages by being based right in his particular country, but those advantages are often outweighed by the superior expertise and experience a company has in marketing its own products. In addition, extra enthusiasm is usually put into marketing a product when it is a company's own product, in contrast to that product being marketed by a third party.
Secondly, if a business is a small to medium sized company, its product is probably being sold to a niche market rather than a mass market. Therefore, any single foreign market that is segmented out will be too small to support an independent operation. For example, Neo-Tech Publishing markets books on philosophy, psychology, and self-improvement. Neo-Tech's market is a niche market. Neo-Tech Publishing does a very good and profitable business in the United States. However, if Neo-Tech tried to break down its U.S. market by individual states, each state would not be a large enough market in itself to support an independent operation.
For example, if Neo-Tech Publishing Company decided to set up a distributor in the state of Alabama, the amount of business done in Alabama would not support that independent operation. The expense of having an office and paying a distributor in the state of Alabama would be greater than the profits generated from that state. Instead, Neo-Tech Publishing Company has one central office that handles business in all 50 states. Each state generates a little business and a little profit. When the business and profits from all 50 states are combined, it adds up to a significant amount of business and profits each year.
A similar situation holds true for most small to medium sized companies that do overseas business. They can do a little business in England, a little business in France, a little business in Australia, and so on. If a company attempts to set up an independent distributor in England just to handle English sales, the amount of business and profits generated would not be enough to support that distributor. On the other hand, if a company handles all of its foreign sales from its American office, the cumulative effect of foreign sales in England, France, Australia, and so on each year will be significant and profitable.
It is true that a person living and operating within a particular foreign country has advantages over someone who is not living and operating in that country but who is attempting to do business in that country. But, in Neo-Tech's case, Eric found that such a foreign distributer simply did not have the years of experience and expertise built up in marketing Neo-Tech's products that Neo-Tech Publishing did. Thus, it turned out that Neo-Tech Publishing was more effective marketing its own products in a foreign country from America than a local distributor based right within that particular foreign country.
Still, Eric fell for such foreign-distributor set-ups many times. Each time a foreigner contacted Neo-Tech stating how much business he could generate within his country if Neo-Tech Publishing Company made him a distributor it sounded so tempting Eric would say "We at least have to try it." But, each time, Eric ended up spending a lot of time and money helping to set up that foreign distributor, only to find that that distributor generated fewer sales than when Eric marketed to that country himself.
It finally dawned on Eric that he was falling for a camouflaged form of the someone-else-is-going-to-make-money-for-me myth. Business is rampant with various forms of that myth, especially international business. What such situations imply is that a person will have to do no work, but he will reap a lot of money from the efforts of others.
Eric learned to always beware of such situations. To make money in business requires exerting tough, nitty-gritty effort. If a person is not aware of exerting his own effort in a situation, then he is probably not going to make any money from that situation. If he thinks he will, he is falling for the someone-else-is-going-to-make-money-for-me myth.
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