Exporting to the USA!

Typical profile of an exporter interested in selling to the US market

Too frequently, European exporters approach the US market via New York City. Occasionally, you will see an exporter not even taking the time to visit the showroom of the selected agent. However, he will give the agent exclusive rights to represent him in the whole US market. He will not have a clear picture of how the agent will identify the customer base nor will he know how his collection will be shown in the showroom. The exporter will, however, be committing to pay a  showroom participation fee of $500 to $2000 per month without any guarantee of sales volume.

 

The exporter naively believes that since he has got products of the finest quality, there is no doubt that the agent will be able to sell these goods as easily as ABC! The agent’s contract being signed, the exporter can now return to Europe and leave the development of his brand in the safe and sole hands of the agent!

On the other side of the coin, the US agents don’t seem to have an easy ride with European exporters. When it comes to suggestions they could make, they seem to be caught between a rock and a hard place!. The catalogue is aesthetically beautiful but it does not show the product in full and therefore it is not geared up for the US market and it does not allow easy re-order for the boutique. After a season or two, the relationship seems to deteriorate, sales are small or nonexistent and the exporter is on his way to finding a new sales representative.

On the one hand , it goes without saying that some – but very few – agents may show little motivation to sell the collection but they willingly take the showroom fee. On the other hand, requests and demands from the exporters do not seem to be very realistic considering the competition that exists in the US, the size of the market and its complexity. Some exporters do not have a clear understanding of the market they are approaching  and they fail to conduct any market research. They do not have a clear understanding of where their customer base is located ( East Coast, West Coast, Midwest…).

Finally, when the exporters have decided to expand in Europe, they have decided to use several sales representatives so what is the explanation for giving exclusivity in the US market to one sales rep? This situation does not make sense if the sales expectations are high.

Overview of a super power

Let’s remember that the US is as big an area as from Portugal to Russia and fierce competition exists in this key world market. I do not know of a brand that would not like to have a presence here!

In this huge market of 296 Million inhabitants, the clothing industry represents more than $170 billion in sales. Of this sum, more than $100 billion is womenswear and imports represent 50% of this volume, coming mainly from China and Mexico. This point shows that the US consumer is not so concerned about the country of origin of the goods. Accidentally, it is compulsory to mention the country of origin on the label. The US consumer will be more anxious to buy a well know brand with high market visibility, which explains the paramount importance of advertising.

When you decide to sell your goods in the US, you will be approaching several markets and not just one. You will be selling to various niche markets and each of these markets will have its individual market
development strategy. A bridge sportswear company was able to reach revenues of $3 million solely in the Chicago area. An importer in Los Angeles was able to achieve the same results with another sportswear company selling exclusively to the Korean community. On the very big number front,  a partner of mine was involved as a new opportunity was identified in the moderate market for a brand dedicated to aspirational snowboarders, surfers & skaters. For his client, he defined and had a completely new brand designed for. He brought the right management to execute the sales and marketing strategies and in 3 years got $150M in wholesale business!

How to sell your goods in the USA

When selling in the US, you will face a complex and varied distribution system dealing with such key players as department stores, chain stores and discount stores. We all agree that these various types of stores represent an attractive clientele. Just imagine that you will be selling to up to 50 to 70 doors such as Printemps, Galeries Lafayette or Selfridges. However, you may be one of those exporters who easily complain that these shops do not pay their invoices on time, or produce too  many debit notes – often not justified – You can expect these difficulties to grow 10 fold when selling your goods in the US market. You must therefore ensure that you strictly respect the routing guide you will be provided with.

In conclusion, it pays to approach the US market with a real strategy and a realistic action plan together with the human and financial resources required to get your project to succeed. You must be willing to work step by step as well as  be willing to optimise all the elements of the supply chain and the sales cycle. Finally, you must have a clear understanding of  the positioning of your product, its price positioning and its differentiating factors (quality, creativity …..)

In the US, you must think and work as an American. Think globally or regionally but act locally. Good luck!

Thierry Bayle

GLOBAL FASHION MANAGEMENT – MANAGEMENT ONE REPRESENTATIVE
A one-stop shop for all your fashion resources Europe-USA
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