April/May, 2001

From the Editor

The Committed Importer

Much criticism has been levied — some by this author — against American firms who view exporting opportunistically. These exporters aren’t committed to building the market, but only to profit from it when windows exist. In a sense they abuse, rather than use, the market.

Just as disturbing — and counterproductive —are those importers of U.S. products that are only interested in hitching a ride on products with already developed demand and only in those circumstances — such as a weak dollar — where the profits are immediate.

Now I’m not talking about a commodity like wheat. I’m talking about branded food products. For here, there is a real opportunity to develop a market. For importers, it is far the greater opportunity.

The U.S. is filled with excellent food products that are not sold at all or sold properly in your market. The key to getting this business is to position your importing organization as reputable, capable and willing to build a business.

One might be surprised at what is and what is not necessary. One man I know despaired of ever getting the chance to represent a U.S. company because he didn’t have the personal credit to support large shipments. But he showed an aggressive, can-do attitude on some small orders, and a big U.S. company, which was despairing of ever getting proper representation in the market, made a deal with him. Although small shipments were sometimes consigned directly to the agent, large shipments were consigned and invoiced directly to the retailers and wholesalers that bought the product. The local agent made a fortune, however, and the U.S. company dominated the market.

So it is not the money that is the crucial variable — it is commitment to building a business.

In a sense it is the difference between being a trader and representing a line. It is easy to get tied up in the semantics of things, and very often an importer of a particular brand of cookies or other product has not been formally anointed as “representing” anything. But at least on an informal basis, it is constructive to think of the relationship as a partnership between the producer/exporter and the importer. To make this relationship work requires efforts on the part of both parties. The importer must:

 

  • Ensure that shelf space continues to be allocated to a brand, even if currency fluctuations and other factors have made the brand a slow seller. The visibility will be important when the conditions change.
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  • Maintain visibility in the trade shows and trade publications of the importing country.
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  • Build the business by not only catering to an existing demand — say expatriate Americans or tourists — but by expanding exposure and use.
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  • Keep the exporter informed of changes in conditions and markets, and make recommendations for product changes and promotional programs that could enhance sales.
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    What this is all saying is that a great importer will work as a partner to build the business and won’t just drop it like a hot potato because business is slow or another opportunity turns up.

    This happens all the time in domestic businesses around the world. A California lettuce grower works with his wholesaler in New York, no matter what the price, because he knows that the domestic market is the only market for most of his crop, and so he accepts what he must to maintain position for the upturn sure to come.

    Even in international trade, the same dynamic often plays out. Based on market prices, a Chilean grape shipper may slightly adjust his allocation of grapes between Europe and the U.S. But, fundamentally, the Chilean grape grower depends on the U.S. market as his outlet for a big chunk of his grapes in the same way that the California lettuce shipper depends on the wholesaler. For practical purposes regardless of the price in the U.S., the U.S. is the “domestic” market for those Chilean grapes. The grapes are planted, grown and packed to be sold in the U.S. This fact dramatically affects the way the Chilean shipper views the U.S. market.

    U.S. exporters tend to have a different perspective. In many cases export is an afterthought. All too often, U.S. producers are prepared to completely pull out of a foreign market simply because of currency fluctuations or market conditions. But the world is getting smaller, and just as European nations have long viewed export as par for the course, such an attitude is starting to spread among U.S. exporters. That creates an opportunity for committed importers.  EXP