Trade - New markets in the new normal
Read time - 10 minutes
Our Yes Business Can event guest Lord Karan Bilimoria, founder of Cobra Beer, took the company from his flat in Fulham to a global brand sold in over 40 countries worldwide.
Watch the replay of our event ‘New markets in the new normal’ where Lord Bilimoria is joined by a panel of business leaders to uncover how businesses can boost trade in 2021.
And if you want to explore opportunities for trading overseas, we have some guidance to get you started.
5-step guide to taking your products overseas
1. Prepare your domestic team – A solid foundation in your domestic operations can make expanding into exporting easier. Is your business in a good place financially and structurally, and do you have the right staff in place to support your endeavours?
2. Choose the right markets for you – Research is key. Is there demand for your product? Is there a gap in the market that’s not being met by local suppliers? How big is the market and how long would it take you to achieve your sales targets? What trade tariffs are in place and would they affect your ability to make a profit? Would language barriers be an issue? Our International Trade Portal can help you identify the right export markets for you.
3. Tailor and adapt as needed – Your products may need slight tweaks for international markets, either to conform to new regulations or broaden their appeal to new customers. You’ll also want to consider how your products are marketed. They may have greater appeal at different times of the year, for example, or to slightly different demographics. Enlisting the help of local experts can be useful.
4. Build a robust supply chain – Trading overseas can open you up to new risks, so it’s essential to have a resilient, flexible supply chain. Consider any risks, i.e. do you rely heavily on one particular supplier or country? Once you’ve identified any potential weaknesses you can implement a back-up plan to minimise disruption.
5. Put the right payment terms and solutions in place – A robust payment process helps ensure you get paid in full and on time. There are a few options you can consider, to help manage risk and ease cash flow through the trade cycle.
Jealous Sweets: Finding the right export markets
Confectionery company Jealous Sweets launched in Tooting, London in 2010 and now sells its premium and shamelessly tasty plant-based and vegan sweets in Europe, Asia, the US and Australia. Co-founder Imran Merza shares his thoughts on finding the right export markets.
Seize opportunities – We’ve always had global ambitions, but enquiries from international food and drink buyers who’d seen Jealous Sweets in Harrods, Harvey Nichols and Selfridges really highlighted the opportunities exporting could bring and inspired us to explore other markets.
Do your research – See where there might be high demand for your products. We started by researching countries where plant-based products were proving popular.
Visit possible new markets – Visiting the market helps you understand “how does my product actually fit on the shelves here?” It can also make it easier to find trusted partners who can help you navigate any cultural differences and new ways of working. Visiting local partners and having face-to-face meetings can also help build trust and show you’re serious about the investment of launching in a new territory.
Check you can make a profit – You need to be sure you can price your products competitively for the new market, while still protecting your profit margin. You’ll also need to factor in any export tariffs, transportation costs and marketing expenses, which usually means selling products at a much lower gross margin than in the UK.
You can read more about how Jealous Sweets and Lord Bilimoria explored trading overseas in this interview with The Times.
How to make your supply chain more resilient
COVID-19 caused significant disruption to supply chains. However, by highlighting the risks and issues that need to be addressed, it has also created an opportunity for businesses to reimagine their supply chains in new, more resilient and sustainable ways. Ed Thurman, Managing Director, Global Transaction Banking, has some guidance for businesses looking to boost supply chain resilience:
Increase visibility: Detailed mapping of your supply chain ensures you can make accurate risk assessments and plan effectively.
Diversify your suppliers: Having suppliers across multiple geographies and ‘back-up’ suppliers helps manage risk and can be useful if you need to scale up to meet demand.
Optimise inventory: Increasing inventory for key inputs can help achieve the balance of having sufficient stock to withstand short-term shocks without putting too much pressure on your working capital.
Consider Environmental, Social and Governance (ESG): Switching to environmentally and ethically sound suppliers can help businesses ‘build back better’.
For more guidance to help your business navigate the coming months, take a look at our Tech adoption , Financial resilience and Innovation pages.
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While all reasonable care has been taken to ensure that the information provided is correct, no liability is accepted by Lloyds Bank for any loss or damage caused to any person relying on any statement or omission. This is for information only and should not be relied upon as offering advice for any set of circumstances. Specific advice should always be sought in each instance.