Park City businesses think outside the domestic box
The prevalence of the English language makes international business a snap for many Park City businesses.
Importing and exporting can be tricky business, as evidenced by the difficulty of Seinfeld’s George Costanza in defining the career of the imaginary Art Vandalay in Part Two of The Cadillac episode.
Whether its importing chips, exporting diapers or selling really long matches, doing cross-border business has its challenges, but can significantly enlarge markets and reduce costs.
"Our foreign business is fairly modest compared to U.S. sales," explained Dave Vance with Au Naturel, a subsidiary of Nutraceutical Int’l Corp. "We do it for the growth factor. The U.S. market won’t grow indefinitely."
Wes Garrett, international sales manger for SoundTube Entertainment, based in Park City, said his company started exporting because they offered something no one else had.
"It’s a unique product that solved problems in commercial audio no one else was able to provide," he said. "A lot of trade shows are internationally attended. We made contacts there."
Linda Kennedy, owner of Loksak Inc. (formerly Watchful Eye Designs) based in Park City, said the same thing. She started marketing her resealable hermetic bags at trade shows and found international customers. With a little Internet research, she found more.
"I thought, ‘Why not?’ I sell all over the U.S., now I export to 30 different countries," she said.
Kennedy said she found the transition to be easy. She partly credits her ability to "figure things out" quickly.
One factor that makes all this possible is the pervasiveness of the English language. Business contacts around the world tend to know some English, doing away with the language barrier. Some businesses still employ people with foreign language skills to help with sales and marketing, but it isn’t necessary to get by.
"Everyone speaks good English, everyone emails in English," Kennedy said.
Au Naturel’s Vance agreed.
"In most markets, places have employees with some English ability. It helps to have employees who speak other languages, but it’s no longer essential, English is pretty widely spoken," he said.
Garrett attributes the fact to the type of industry he’s in.
"Our products are technology based, so most people we work with are engineering focused, and engineers train in English all over the world," he explained.
That said, moving products from country to country can get complicated.
Backcountry.com, an outdoor retailer, has customers around the world since outdoor recreation is a global hobby. But its marketing material is all in English, and has a definite American flavor to it, said Scott Klossner, chief financial officer.
Getting a larger share of the market in Canada, for example, would mean translating materials, all the way down to the labels on the product, into French. Also, European ski retailers market with a different flavor than American companies, and Backcountry.com would have to get savvy to that, he said.
Au Naturel sells dietary supplements. Since they are health-related pills, some countries make the company adhere to regulations set for pharmaceuticals. Some countries’ rules are determined by ingredients, which is complicated when a supplement contains more than one.
Some governments, like Malaysia, require complicated and expensive registration. Others, like Japan, just verbally ask if the product has been approved for import.
Before setting up a deal with a distributor, they have to find out if the customer understands her country’s regulations, markets, and if it makes sense to do business there, Vance explained.
This investment of research can be a problem in and of itself, said Klossner of Backcountry.com.
His company, as a retailer, was importing and exporting from the beginning. But he sees many companies try to start going international, and end up pulling attention away from their core markets.
"Anytime you invest that amount of manpower, you risk losing focus," Klossner said.
If a CEO is already working 60 hours a week, and the company adds international business to the palate, does he work more hours, does something else get pushed aside, or does he hire more people? Usually stuff just gets pushed aside, Klossner said.
"You must be prepared from a human capital standpoint," he said.
Garrett of SoundTube Entertainment said he was hired specifically to handle international sales. He looks at what companies are selling similar products in markets he’d like to be in, and then contacts distributors there with his information.
Getting the right overseas partners is key, he said. After doing research on a market, he’ll travel there himself to set things up. That’s a big investment and he has to be sure it will be worthwhile before he books the trip.
Logistics is his biggest challenge, Garrett said.
They can import raw materials in bulk, which is inexpensive, but sending the finished product to a customer in a far-away corner of the world gets complicated.
"Our products are bulky and relatively inexpensive, so the cost of shipping is a large percentage," he explained. "Access to Eastern European markets isn’t cost effective right now."
Overall, the current economic trends bode well for Park City businesses, said Bill Malone, executive director of the Park City Chamber/Bureau.
The weak dollar is making the consumption of Park City products more affordable. Countries with no language barrier at all, such as Australia and the United Kingdom, are easy places to take advantage of this trend, he said.
Many of these companies do their shipping from other Utah communities.
Loksak has a warehouse in Lindon, Au Naturel ships its products out of Ogden, and Backcountry.com has its warehouse in West Valley City.
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