US-Asia Business

Finding New Overseas Holiday Markets for Local Products

The holidays are a strategic time for entrepreneurs to reach overseas customers.

Fashion lovers around the world stock up on David Lee’s stylish dancewear – which has been featured in the Italian and German editions of Vogue – even if they’ve never donned a pair of ballet slippers. The former dancer’s firm, KD New York, knits items such as the off-the-shoulder cotton “boyfriend top” and capri-style cotton leggings in South Bronx, N.Y., and sells them in a meticulously edited shop in the trendy NoHo neighborhood of Manhattan. “Our idea is to take dance and yoga into a more ‘active fashion’ kind of feeling,” he says. “That’s a major trend now.”

Lee’s overseas customers often make their holiday purchases through KD’s e-commerce website, which has the slogan, “Made in New York. Worn All Over.” That tagline is his reminder about the authenticity of his products, made in what many consider the dance capital of the world. KD New York, which employs about 20 people in Lee’s factory and three in his store, has sold his dancewear throughout Europe and most countries in Asia.

Lee is one of many U.S. business owners who have found that the holidays can be a good time to reach out to distant e-commerce customers who appreciate a U.S. brand’s local cred. It takes some effort to attract faraway interests and serve them successfully, but many entrepreneurs have found they can do it. Here are some tips to use if you would like to sell locally made products to overseas consumers for the holiday season.

Do the math

“One of the biggest things people need to do from Day One is really understand the total cost that is added to the product once you are taking it from Brooklyn to France,” says Sabrina Parsons, CEO of Palo Alto Software, which developed LivePlan, the business management software. She mentors many entrepreneurs and her company sells products overseas. “What costs does that add? How does that change the gross margin? You are going to have to think about it strategically in terms of pricing, because you have added [to your] costs.”

It’s not just a matter of adding an extra $20 to cover your added overhead, Parsons says. It’s important to figure out what your gross margins are when you sell your product in the United States and then figure out exactly what you need to add to the price in the country you want to sell in so your margins stay the same. “It helps business owners to understand if this is really viable,” Parsons says. An accountant can help you calculate your gross margins if you don’t know what they are.

“The biggest mistake with artisanal products and people who sell things on Etsy and eBay is not realizing all the charges involved in selling a product across different platforms – and realizing, too late, you’re barely making any money,” Parsons says.

Consider the logistics

One of the challenges of selling holiday gifts overseas is timing. Customers who are ordering a Christmas gift will not be happy if it arrives on December 27. That means you need to develop a geek-like expertise on what can be dry topics, like which shipping carrier is the most reliable in a particular country, and what it will cost to ship something overseas. Looking at the shipping carriers listed on the websites of other businesses that sell in your target country can give you tips on which carriers are the most reliable. And bear in mind that shipping cost-effectively around the holidays requires a lot of lead time. “The closer we get to the holidays, the higher the shipping cost is to guarantee holiday delivery,” Parsons says.

Sometimes, entrepreneurs are surprised to find that customs fees and excise taxes essentially double the price of a product for a customer in a particular country, Parsons says, which can lead a customer to refuse to pick up an order and ask for a refund. “No one is happy in that situation,” she says. If the additional costs to customers will be very high, it probably does not make sense to sell in a particular country.

Raise your profile

Often, getting media attention from publications with a broad international reach is a good way to raise a small brand’s cachet globally. Lee, for instance, who works with a publicist at his firm, has made his products available to many a fashion editor in New York for use in photo shoots, and has gotten them into the hands of celebrity clients like Jennifer Lopez and Mikhail Baryshnikov.

You don’t have to be part of the fashion world to bring global media attention to your local cachet. Ask Craig Wolfe, based in California, who gets about 20 percent of his business from overseas. Wolfe sells novelty ducks, such as one that looks like Marilyn Monroe, at the CelebriDucks site. To encourage international sales, Wolfe proudly touts on his website the fact that his ducks are made in the United States – known for its product safety – and don’t use PVC plastic. Using tools such as the free site Help a Reporter Out to reach the media, he has persuaded reporters to feature the wacky ducks in many articles and TV programs that have put his store on the radar screen of customers around the globe.

Launch a special holiday line

Many people around the world are looking for unique gift ideas right now, so novelty or limited edition products with a global appeal can do very well. Sometimes overseas customers will be more willing to pay for holiday items that are especially funny or quirky, making them more financially viable. “There are European customers who absolutely love the kitsch holiday products and services,” says James Berkeley, managing director of Ellice Consulting Ltd. in London. “Think Bing Crosby's `White Christmas’ on steroids.

They may not make up the largest share of the market, but they have a high propensity to spend two times or four times [what] most typical consumers [spend].”

One of Wolfe’s new product lines is a case in point. To generate holiday excitement, he just launched a line of “Costume Quackers” ducks, including one with a “Spa Wars” theme. “It’s a big hit,” he says. “People worldwide have a sense of who those characters are.”

It’s important to start now if you’re going to market your products overseas for the holidays. Fortunately, online commerce makes it easy to quickly spread the holiday cheer.