Whether you’re a distributor of niche soaps or have over 25,000 SKUs, people around the world are able to purchase whatever they want, whenever they want. Globalization has no doubt allowed smaller players to compete with the big guys and taking your wholesale business global by distributing internationally is a great way to expand operations and grow your clientele. The first thing to think about is adapting to different cultures and local markets. Doing business in another country is very different than doing business in your home country so take the time to learn cultural norms or offer documents such as invoices in your partners home language to build the relationship.
With any influx of sales your business processes will change, and you will want to be prepared with the right software in place. Let import-export software assist you with changing business processes and set it up in a way where global expansion won’t disrupt current success. Going global is not easy; let’s look at a real-life example of a company that failed due to a lack of inventory management.
Why Target Failed in Canada
Target is a big box department store headquartered in Minnesota, USA. With close to 2,000 stores and up to 49 distribution centers, Target is a one-stop shop for clothing, home items and more. Since Target has done so well over the years in the United States, when 2013 came around, the company decided it was time to expand into their neighboring country - Canada.
Target depended on their success in the US and when opening in Canada, they not only rushed to open over 100+ stores but one of the biggest factors to their collapse? Poor Inventory Management! The company struggled with distribution and customers were not impressed with the low stock of common items. Less than two years after opening, Target announced its closure of 133 Canadian Stores.
As Target found, international expansion is difficult, even for top retailers.
Although Target is not a wholesale distributor we can learn a thing or two from their failure. Understanding the market should be your priority and implementing import and export software can automate business processes such as inventory management so that you don't have distribution issues. By offering multi-currency and multi-language support, eCommerce integration, speeding up the picking, packing, and shipping process, the right software allows you to conduct business comparative to the global giants of the world.
Multi-Currency, Multi-Language & Multi-Suppliers Support
Navigating global supply chains can be difficult when there are language barriers, differing time zones, and various currencies. ERP software with import and export functionality has the ability to handle multi-currency transactions which is vital to global success. With the ability to automatically convert transactions in the currency the deal was made to your home currency eliminates the manual process of factoring in various currencies and exchange rates. Plus with an extensive list of reporting tools to use, you can spot unrealized foreign exchange gains or losses. If you're dealing with multiple currencies, you're probably also dealing with partners or customers in multiple languages. Having the ability to send documents such as invoices and packing slips in your partners home language is a great way maintain a relationship and ensure transparency in business dealings.
Warehouse Management – As you think about taking your distribution business international, think about your current warehouse situation. Are you using a 3PL? If you have your own warehouse, how efficient is the picking, packing, and shipping process? Whichever route you decide on, an all-in-one inventory management and accounting ERP system with import and export functionality will streamline the shipping and receiving process allowing your team to move inventory quicker.
If you are using a 3PL, integration through EDI connects your import-export software to each of your 3PL Partner systems meaning the two can directly exchange information and automatically update data. The act of manually sending and receiving information is no longer necessary.
If you have your own warehouse consider a barcode solution such as Blue Link’s Mobile Scanning App that eliminates the need for paper in the warehouse and reduces human error. Save time by providing inventory locations and save money by using a less expensive iOS scanner as opposed to the traditional bulky scanner.
To learn more about Blue Link’s Mobile Scanning App – Watch this overview
Landed Cost Tracking – Tracking landing costs means tracking all costs associated with bringing a product into your warehouse – your true inventory costs. Distributing internationally often includes added costs such as duty and brokerage fees, and the calculation of these costs can actually be set up in your software. By tracking landed costs, you’re able to see the true profitability of your inventory.
eCommerce – Although Target decided to expand in 2013, it’s interesting that the company decided to open 100+ brick-and-mortar stores instead of expanding their online presence. As we have seen in recent years, the eCommerce market has grown exponentially, and small businesses can take advantage of the multiple selling channels. Integrating your eCommerce channels with your ERP Software means an accurate flow of inventory information. Whenever a sales order is created in your eCommerce site, inventory levels are adjusted in your software which eliminates the need to re-key the same information.
Sales Tax – If you are domestically distributing products you can likely calculate sales tax on your own. If you want to distribute internationally you must understand Sales Tax Compliance in the new state, province or country and calculate accordingly – which can be difficult if you are selling into many different geographical areas. Integrating and automating a sales tax solution such as Avalara with your import-export ERP software simplifies the sales and use tax process by automatically managing exemption certificates, rate calculation and updates, preparing sales tax returns and more.
Extra: Automated Customs Declaration
Automation and the use of technology is the main theme here. Importers and exporters of small distribution businesses who want to start distributing internationally benefit from the ability to automate a customs declaration form for coinciding purchase orders.