Selling Your Product in the USA
With a solid marketing plan and realistic expectations,
success can be achieved
If Canadian entrepreneurs think that selling their products in America is a difficult, risky undertaking, they're right -- to a certain extent. But experts say that with a solid marketing plan and realistic expectations, success in the USA can be achieved. And the rewards can be huge indeed.
Jim Pettinger is president of UCanTrade, Inc. of Ferndale, Washington, a marketing support company that assists Canadian companies entering the USA market. UCanTrade provides everything from warehouse facilities, order processing, shipping and packaging and marketing communications. Recently, Pettinger organized a conference where all the aspects of doing business in America were discussed -- everything from customs regulations, tax policy and visa requirements to distribution and marketing. UCanTrade serves clients from a broad assortment of industries including crafts, textiles and communications. About 50% are in high tech and software industries, an industry where Canada has made enormous progress over the past years and for which its products, developers and technicians are world-renowned.
There are a few key things that small Canadian companies must do well to successfully market their wares in the huge American marketplace. One is to take a hands-on approach from the very beginning by visiting privately owned retailers and selling them yourself. Pettinger calls this "filling the channel from the bottom up."
I think a mistake a lot of companies make is to think about filling the channel from the top down, when they don't have any experience… they (Canadians) don't realize there are people marketing against them who've had 20 or 30 years of experience who probably know how to fill it from the top down, but, people who are working on their first product really need to take a more conservative approach and gain some experience." Getting a big distributor, which typically handles thousands of different manufacturers' products, is a catch 22 for small Canadian companies. They want to see a company doing volume before they'll carry their product.
Most large retailers on the other hand, refuse to buy direct from manufacturers, hence the need to sell to small independent retailers in the beginning.
Secondly, Pettinger advises companies to take a hard look at their marketing budget and appreciate that the American market is truly gigantic compared to Canada's. He thinks that too often Canadian companies underestimate the USA market size and try to go after the whole thing. He recommends identifying and trying to reach only that portion of the market a company can afford to pursue.
The third most common weakness Canadian companies exhibit is in selling, and this is particularly noticeable in companies from BC, a natural resource-based province.
Marketing and distribution is a skill," says Pettinger, "and when someone with less than 6 months experience with that skill is out there in the marketplace where there are people with 20 or 30 years of that skill, they're going to lose. Very seldom is a Canadian going to have the edge in marketing (in the USA). Canadians in the software, communications, engineering and forestry industries are often some of the best, but we're just poor salesmen, it's as simple as that."
Lastly, Pettinger says that because Americans are world leaders in marketing and sales, the odds of your product succeeding south of the border are much greater if it has some uniqueness to it. And it also helps if it has a healthy profit margin. Software and communications technology fits that mold. "There are something like 150,000 new products introduced in the USA every year and therefore you have to have something unique to succeed."
Pettinger believes that if there is a company operating in BC that has a product that is selling in BC, they should head to Washington State tomorrow. It's mostly psychological that more companies don't. It is an ironic fact that the battle against red tape is usually greater interprovincially than it is in the USA.
A Canadian would have a more difficult time cracking the Ontario market than they would the Oregon market because it's much more convenient being in the same time zone, a crucial factor for small companies." Says Pettinger.
What is the first thing a company should do before setting out to capture a share of the USA market? Jim Pettinger: "Number one, decide what their marketing budget is for twelve months…that dictates how many people they can reach, and then they should define where the easiest people to reach are and simply go -- and I recommend going personally to line up retailers and not even think about distributors, and actually begin to make sales and grow from there."