05 Dec HARSEST – Three Ways to Create Overseas Sales
1. Social media
2. Email marketing
3. Online B2C = B2B2C
There are various ways to make sales abroad, however, due to financial, time and technical difficulties, many companies give up before they even start selling overseas. This report presents three practical ways for new and smaller brands that want to challenge overseas market without special financial investment or technology.
0. Mandatory preparations for overseas markets
Yoox is famous as a retailer group with a thorough IT background
The ways to create overseas include participating in overseas fairs or signing a contract through a showroom (for B2B sales) and the use of foreign e-commerce platforms for B2C sales. YOOX (currently called YOOX Net-a-Porter) from Italy, is a well-known group with a thorough IT foundation that provides an online platform for companies such as Marni, Emporio Armani, D & G, Maison Marin, Margiela, Bikkemberg, etc. It was one of the few companies that introduced RFID systems in the logistics sector. YOOX uses retargeting marketing through Facebook and Google Ads that targets channels using cookies. However, the method mentioned above is difficult for new brands without a strong IT foundation.
Photofolio of YOOX Net-a-Porter
The report deals with basic but practical overseas B2B sales methods without any particular financial, technical and time-consumption.
With these three methods, the following data and arrangements are essential. These preparations are not only for overseas markets but are essential for the domestic market as well.
A. Brand introduction
The brand introduction is the most basic document to send to sellers in order to sell their products. It specifies the information regarding the difference with other brands, designer, CEO, founder, brand history, concept, targets, price range, contact information, etc. The most important part is the storytelling. It is to imprint the brand with the buyers to make sales. Keep in mind that people do not recall brands but their story itself. Approach the customers in a memorable and honest way. According to a book written by storytelling experts in Denmark, Branding in Practice, emotion and conflict are the key parts to storytelling.
Imagine if there was no stepmother who was the villain in Cinderella. The famous golf player Seri Pak, won a championship because she took off her shoes and hit the ball out of a pond. Psychologically, bad news travels nine times faster than good news.
Likewise, a story that people tend to remember does not always end with a happy ending. It is the hero who overcomes and endures pain or defeats the villain. Brand storytelling can become famous by creating a dramatic story that involves overcoming obstacles. There’s no need to create a fake story, however, it can be a great brand storytelling if a brand honestly tells the story that people can relate to or remember.
B. Look Book, Line sheet, Order form, and Price list
These are the most basic materials to show and sell the brand created through PDF, Excel, etc. In most cases, items can be displayed on the website. Furthermore, some buyers may place an order by looking at these materials.
C. Open social media accounts
Facebook and Instagram are essential as social media. Currently, Instagram outperformed Facebook’s influence in the fashion industry. Instagram is absolutely critical in the B2C market, and Facebook is vital to B2B sales.
D. Press release materials
Are designed to keep the brand news and season data available so that they can be distributed on a regular basis. Its better to get them accumulated in a single file, such as Press Clipping, for immediate use.
E. Email address and webpage
I would like to emphasize this section since it is underestimated in Korea. Use an email address that is the same as the brand webpage domain to appear professional. The signature of the email should also be clearly noted, and the front section of an email address should contain a title such as your first name, e.g., Chulsoo@ or Jiyoung@. Create web pages using service providers such as WordPress, Wix, and Cafe24, which are relatively easy to manage; however, should also focus on Google’s Search Engine Optimization (SEO).
Sales are ready to be made once a brand follows this.
Sales through a Social Media
In January 2015 Harsest was able to make sales worth 6,000 USD within 12 days after signing a contract with a client and all thanks to social media. In some cases, a brand is exposed in the overseas market through activities on Facebook. It is important to turn on a notification setting through a Facebook plug-in to keep up with followers to examine them.
It is important to get as much information as possible in a follower’s page which may vary from person to person, but some leave accounts partially open. It is not that difficult to find a person who runs a shop or works in the fashion industry in an introductory section on Facebook and Instagram.
For example, if a person named Nick Wigley from Atlanta, U.S.A., who works at a company named ABC, if unable to find further information on Facebook or Instagram, search on Google by typing “Nick Wigley Atlanta ABC to find his webpage. Through his webpage, send an email the day after his started following your brand social media account.
For example, if you search Haseok Sweden, it is easy to find an e-mail address, location as well as other details regarding his job.
The contents of the e-mail should be a simple introduction letter with look book and line sheet of the brand. Show them a gratitude for following you’re account and ask for an answer if they are interested in it, indicating that the item can be sold.
The reason why a brand should not send an order form and a price list from the beginning is for several reasons. Firstly, it appears to look desperate. Instead, it is better to create communication via email in order to garner interest about a given product. Once the recipients send a reply, it opens the door to begin sales. In the situation when there is no reply, send another email after two or three days as a reminder by forwarding the previous email. Use an email tracking tool such as Banana Tag to keep track of the email recipients.
In addition, creating a template for emails can save a great amount of time by being able to send an email as soon as an inquiry come through. It is also better to systemize it through the TextExpander that was introduced in the Top 5 Email Application Report. This method is available throughout the year. In particular, at the beginning of a season, in January, and June, July, pre-orders are available. Offer a trial or test order without a minimum purchase to give an opportunity to try the brand’s products. In the case of pre-order, ask the buyer to obtain the minimum order amount.
The following is the example of a practical approach to customers.
For instance, notify customers by saying, ‘Our brand basically has a 2000 USD minimum order amount, however, in the case of placing a pre-order at the same time, you are able to place a current season order without MOQ’. In this case, the brand does not seem desperate and at the same time, it gives an opportunity to place an order without a burden to the buyer. If the buyer wants to receive the current season’s items and place an order during the next season, agree on it by eliminating MOQ. Once the buyer is certain of the product, it creates an opportunity for them to pre-order.
To sum up, B2B orders through social media should proceed in the following order.
Study followers – Get information – Get webpage and email address – Contact via template email (Brand introduction, look book, line sheet) – Reminder email/ price list or order form – Ordering – Invoice – Payment – Shipping
In some cases when a sample is requested for the product quality and detailed examination, require a return of samples when the order is not placed afterward.
Sales through social media are possible when the channel is exposed to overseas blogs or other methods. Therefore, it is important to put a constant effort in order to interest potential retailers and gain more followers.
Sales through an Email Marketing
Create a list of the information of competitors such as price, design, target, etc. to figure out their direct retailer’s contact information through search. With 10 to 20 brand information, you are able to find around 80 retailers’ contact information. If it is difficult to select a competitive brand, enter each brand’s web page by looking at the list of brands in a fair webpage such as Capsule, SEEK, Tranoi, ENK, and Pitti.
Use Email Marketing Provider (EMP) such as MailChimp and direct email methods. The following is the most effective way to precede the email marketing:
After importing the list from MailChimp, send an initial campaign mail to introduce the brand including brand introduction, look book, line sheet, as well as the address of social media to attract the attention of the viewers. A week after the first email, follow up with a second email with interesting news with strategies. Create a list of people who opened their email and send another email with your business account.
The content of the email should include: showing gratitude for their interest, price list, and an order form. It creates an opportunity to purchase the product as well as creating the close and direct relationship with potential customers.
After this, send a Close-deal email using MailChimp. Close-deal emails include special offers such as purchasing without a minimum purchase amount or worldwide free delivery.
It is a reminder for recipients (B2) and it also creates a sequence from the special offer step (B1).
These two intersections are summarized below.
Sequence A is an entire mail using EMP, such as MailChimp, while the B sequence is an approach through direct email.
Although the sequence above is just an example of short-term sales, the actual sequence of the MailChimp is usually 3 to 4 times direct email. It can be adjusted according to the brand’s storytelling capability and brand strategy. Using an email tracking tool is also important, such as making sales in social media as mentioned above, provide a much more advantageous communication and sales experience with direct e-mailing.
Sales Funnel
In general, the retail business has an open rate of the email about 21 percent and the click rate of 2.6 percent. For example, among 100 people that an email is sent to, 21 people open the email and 2.6 people click the link. 20 percent among those 2.6 people, 0.5, actually make a purchase. These sales flows are called the Sales Funnel. In other words, if there is less than 1 percent possibility that sales will take place with 100 people, it also means that a brand can create sales to 5 people among 1,000. A direct email sequence as described above combined with the MailChimp sequence can create more sales possibilities.
In sequence B, the opening rate is over 50% and the click rate is over 30%. Plan the special offers and interaction of the sequences to increase the sales rate up to 5 %.
Sales through emails are beneficial with a combined strategy of targeting groups, potential customers, special offers, transaction sequences, etc.
Online B2C = B2B2C
Strategies of Quick & Dirty
The last way is called the “Quick and Dirty” strategy: it creates faster and easier sales. The strategy may appear to be less professional; however, it is similar to the process of forming markets in Korea and China.
The followings are the steps at which new brands are known to the public and the associations between B2C and B2B.
A. Personal order by trend leader group overseas: Purchases from overseas brand websites or multi-brand online shops
B. A group order to save shipping cost: Save tariffs by ordering with friends or people online
C. Creating online pre-order channels: As the brand gains popularity and the number of visitors increase, people begin to order overseas from online forums such as Naver Cafe and Facebook Group. After receiving a preorder from several thousand won to tens of thousands won profit margin per item, order directly from a multi-brand online shop or brand website and deliver the product to Korean buyers.
D. Preorder channel formation for wholesale: receive orders and sell more than 50 items through an online forum.
E. Online website formation: Set up the website directly in the online forum and initiate sales by contacting the brands, not through pre-orders.
The flow above is the process of moving from B2C to wholesale business (B2B). The following is the the process of moving from B2B to B2C.
F. Increased brand awareness in Korea: With the emergence of retailers selling directly from brands, brands have become more available in the market.
G. New B2C: The price is higher than the price overseas as reflected with tarrifs, other legal procedures, and popularity. At the same time, regular buyers, not trend-setting groups, turn to overseas shopping to buy the brand at a lower price and make direct purchases from overseas brand websites. (In fact, even though the price difference may not be big, it is more pleasant to receive products directly from the brand.)
The flow is the process of changing from B2B back to B2C as the brand becomes famous. Orders for the public, not the trend-setting group where the first B2C occurred, have begun. The B2C sales from the brand to Korea have grown even more as the brand becomes available to the public.
The flow from B2C, which started by the trend-setting group, to B2C is a sales method called the “Quick & Dirty”.
In order for a Korean brand A, for example, who is using the Quick & Dirty strategy to enter the Chinese market requires several steps. Firstly, enter Taobao to promote an unknown brand since it is the most popular site in China. In order to increase sales as an unknown brand without resources, the best way is to create a Taobao channel through some acquaintance in China. Begin sales and as it increases, provide sponsorship to celebrities.
At the same time, through Weibo and WeCat, create resources to make sales. As the brand becomes famous, people begin to make 5 to 10 purchases per person. The business will shift from B2C to B2B as it is mentioned above over personal wholesale for thousands to tens of thousand won profit margin through an online forum and social media.
“Quick” from Quick & Dirty strategy refers to a channel that can be quickly shown while as “Dirty” refers to the negative influence in the value of a brand by entering an open market such as Taobao.
How can a brand manage these factors?
As soon as the brand gets awareness in the market through Taobao and retailers start to contact the brand, sales through Taobao will be discontinued as well as the sales through personal orders to China from Korean websites. It is time to focus on Chinese retailers for a bigger profit margin. If the retailer is successful in doing business, other retailers will start contacting the brand for sales. Focus on B2B until you create sales through 5 retailers and provide exclusive sales with the distributor. In order to sign an exclusive sale with the distributor, the minimum purchase amount should be at least 1.5 times of the order volume combined with those 5 retailers. By doing so, a brand can prevent a loss from a discount (usually from 25 to 40 percent) provided to a distributor’s purchase.
Examples of sales between 5 retailers and exclusive distributorship:
Retailer 1: 1,000 USD
Retailer 2: 1,000 USD
Retailer 3: 1,000 USD
Retailer 4: 1,000 USD
Retailer 5: 1,000 USD
Five retailers total order amount: 5,000 USD
The contract with the distributor has been 1.5 times the minimum of 5000 USD (7,500 USD):For a 25% discount, the actual payment amount will be 5,625 USD. (7500*0.75)
In this case, the brand’s contract with the distributor resulted in a larger income of extra 625 USD; the time and cost of the export-related documents and packing could be reduced, and the production price of the item per volume actually increased by 1.5 times which creates a reverse margin.
Fancy.com, for instance, is an American website that has been growing with various investments such as venture capital, etc., since 2013. It is similar to Taobao, eBay, Amazon, and Gmarket where the social media and open market is combined. Utilize these channels as a new brand to spread the brand value. Another important aspect of channel creation in the overseas market makes it more reliable and easily purchased via local sites for buyers, thereby avoiding language barriers and terms that could be found on Korean B2C websites.
New retail channel, Fancy.com, a combination of image sharing and open market
It is important to acknowledge that the “Quick & Dirty” method must be developed into professional forms of business such as retailing, and contracts with agents and distributors. If a brand misses the chance to improve, they could be at a standstill where their product has no chance to compete in the market.
Closing sentences:
There are endless sales methods; however, those methods available are often limited by the circumstances in which they are chosen. In this case, follow the method that Jeff Bezos from Amazon used: enter the niche market as quickly as possible. Overseas sales are not that difficult once a brand figures out the strategies and adapts to changes in the sales channel. Marketing through social media, email, Quick & Dirty, as introduced in this report are methods to switch from B2C to B2B2C sales without large investments or long experiences. By doing so, the brand value will increase as well as attracting more retailers and fan bases.
Nothing is impossible. Especially in business, it is important to put constant efforts in order to strive for your goals.
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