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Using the Internet helps Sharon Doherty,
president of a pet-products company, brush up on overseas
markets and her competition. The man in Bahrain who was
surfing the Internet one day last summer happened upon
a reference to Sharon Doherty's dog shampoos. The man,
who owned a puppy and was searching the World Wide Web
for relevant information, found the mention on a Web
site set up by a dog breeder in Spain.
That chance encounter in cyberspace led to two positive
outcomes for Doherty's firm, Vellus Products Inc., a
Columbus, Ohio, manufacturer of pet-grooming products:
the puppy owner in Bahrain contacted Vellus and became
a customer, and the dog breeder in Spain became the Western
European distributor for Vellus after Doherty contacted
him.
Such is the power of electronic communication to extend
the reach of small companies to markets worldwide.
"The way this (business transaction] transpired
just blew me away," says Doherty, president of Vellus.
She first experienced the Internet less than a year ago,
and now she routinely spends up to two hours a day online,
researching overseas markets and domestic and foreign
competitors. The company had revenues of less than $500,000
last year, but Doherty believes the Internet will help
boost sales.
The successful conclusion of the
European distribution deal also spurred Vellus to ratchet
up creation of its
own Web site which was launched recently. "I think
the Web site will help business tremendously. I have
no doubt that it will pull in people from overseas," says
Doherty, who has been exporting for five years. Foreign
sales account for more than half of her revenues.
Across Time Zones Just as the Internet
is fast becoming a key domestic business-development
tool, companies pursuing
foreign markets are finding it an effective-and sometimes
necessary means of reaching business partners and customers
several time zones away. "There are graduating levels
of sophistication of usage," says Lisa Kjaer, director
of the U.S. Department of Commerce's Export Assistance
Center in Seattle. She says there are four steps in the
natural evolution of small exporters, adoption of Internet
technology:
- Getting electronic mail.
- Building an informational Web site.
- Conducting international market research electronically.
- Offering potential online customers a secure process
for ordering and paying for products.
The first two steps have been implemented
successfully by a 30-year-old, Compton, Calif., manufacturing
company
that just months ago started the ball rolling on a
plan to export its aluminum door frames. "We've already
found the Internet to be invaluable," says Rod J.
Gutierrez, president of Modulex, Inc. "e-mail cuts
down on phone expenses and, with the time differences,
eliminates a lot of wasted effort trying to communicate
internationally." The company's new Web site offers
product information to people interested in the company's
target markets of Mexico and countries on the Pacific
Rim. Gutierrez hopes this exposure in cyberspace will
attract distributors, customers, and even joint-venture
partners to the small company, which last year had revenues
of $2 million.
Similarly, Kris Olson, owner of Beater wear in Bellevue,
Wash., says his two year-old Web site has been an important
promotional tool and an effective generator of leads.
Beater, which manufactures ski pants, jackets, and accessories,
last year had revenues of $65,000. Olson hopes that the
Web site ultimately will help extend his selling season
from five months to year-round by sparking exports to
countries in the Southern Hemisphere, where the seasons
are reversed from those in the Northern Hemisphere.
Dispelling the notion that small companies can't afford
an Internet presence, Olson himself created Beater's
site even though he had little computer experience. Soon
after the site was launched, it was receiving 100 visits
a day. Now it averages about 2,700, and Olson expects
to boost that significantly through recent arrangements
with ski magazines, which will promote his Web site in
return for commissions on resulting product sales.
Shopping The Web
Web-generated sales already are brisk for some companies,
according to trade specialists in several states, though
actual online transactions still are not occurring
in great volume. The most common pattern is for customers
to tap Web sites for product and company information,
then use faxes or telephones to place orders. Apparently,
they do this largely because of online-security concerns.
That prompted Olson last summer to offer a secure online-ordering
process, which has resulted in an increase in Web orders
from overseas customers.
Some non-exporting companies are
finding that having a Web site can result in overseas
business they hadn't
even courted. Hyperspace Cowgirls, a two-year old, New
York City-based developer of children's software, has
several European deals in the works even though it has
no marketing effort overseas. "We don't advertise
overseas at all," says Susan Shaw, president of
the company, whose Web address is www.hygrils.com. 'People
just find you."
Linking The Sites
Recognizing the Internet's growing value to small exporters,
export agencies in many states-Michigan, California,
and Wisconsin among them-are helping companies become
familiar with the Internet and with the nuts and bolts
of Web-site development. Increasingly, small firms
are linking their company sites to a variety of trade-related
sites, including those of trade centers and banks.
This year, Washington state launched
a site designed to promote its forest products, one
of the state's top
export priorities. The site, targeted at the Japanese
market and containing information in Japanese, includes
a directory of forest-product companies in the state
and links to the companies' Web sites. Since September,
20 U.S. companies that sell computer and business equipment
have participated in a continuing "online trade
show" through a Web site aimed at Chinese businesses.
The site, funded by a public-private partnership, contains
information in Chinese on the companies' products and
contacts. According to the U.S. Department of Commerce,
a sponsor and promoter of the site, the effort is designed
to help companies test the market in China without spending
the thousands of dollars it would take to travel there
to participate in a trade show.
The future importance of the Internet
as a tool for international business seems limitless.
Says the Commerce
Department's Kjaer: "Every business that I've talked
to says that they're seeing exponential growth in the
numbers of visitors they're receiving [on their Web sites]
from overseas. ... The biggest concern I have for companies
is that some still don't even have e-mail. They need
to make that investment. This is growing so fast that,
pretty soon, it will become as necessary a tool as the
phone and the fax."
Trade aficionados predict that electronic commerce will
never fully replace face-to-face meetings with international
contacts or eliminate the need for small companies to
seek expert counsel about the many aspects of doing business
abroad.
"You will not have to meet with people overseas
as often," says Daniel J. McLaughlin, Deputy Assistant
Secretary of Commerce for Domestic Operations in the
International Trade Administration. "But the electronic
aspect will augment relationships and allow for entry
into more markets with greater speed and ease and for
less cost." Use of the Internet, he says, is the
No. 1 topic in international trade.
Internet use by businesses in most
foreign markets is not as widespread as it is in the
United States. That
gives U.S. companies an advantage in gaining access to
those markets, at least for the time being, according
to Eva Chiu, president of InfoAdvantage, a consulting
firm in Bellevue that develops Web sites for other business
people. But as foreign companies make greater use of
the Internet, that advantage will diminish as competition
increases, says Chiu. "Since we have a leg up, the
timing is good for us to take advantage of our ability
to get into those markets," she says.
Acknowledging the speed at which
technology is advancing, pet-products manufacturer
Doherty concurs: "As for
an Internet presence, we needed to do it yesterday.
Reprinted by permission of Nation's
Business, a monthly magazine that serves as a resource
to the owners
and top managers of small businesses by providing practical,
how-to information about running and growing an established
business. To learn more about Nation's Business, visit
the Web site at www.nbmag.com.
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