A passionate backpacker, Kyle Berner was wandering through a Bangkok street market in 2007 when his flip flop strap broke. Luckily, he found a new pair—hanging from a tree—and bought them from the vendor who was selling them. Within minutes, he noticed his new flip flops weren't just any kind of flip flops; they were made from natural rubber and were sturdy and comfortable.
“I had a light bulb moment right there in the market,” says Berner (pictured). And a few months later, he founded flip flop-maker Feelgoodz and began selling the all-natural flip flops in the U.S. The New Orleans-based company now has sales just under $1 million and already sells to retailers in New Zealand and Australia. “The only thing I changed was to make the rubber a little bit softer,” says Berner, who manufacturers the flip flops in Vietnam. He is now preparing to export his all-natural and recyclable flip flops to China.
Feelgoodz is one of about 275,000 small U.S. companies that are selling products abroad, contributing to the estimated $1.6 trillion in U.S. exports, according to commerce department figures. Despite the soft economy, domestic exports were up 15.8 percent through September 2011, according to Frank Lavin, a former under secretary of commerce.
Lavin is the founder and chairman of Export Now, a new company devoted to helping small companies expand globally. Lavin is also the co-author of Export Now: Five Keys to Entering New Markets, an informative new book published by Wiley & Sons.
With offices in Ohio and Shanghai, Export Now is helping small and midsize companies like Feelgoodz crack the lucrative Chinese market. Rather than opening up an office in China, Berner is hoping to sell his flip flops to Chinese consumers via Tmall.com, a massive e-commerce site with 370 million registered users. Berner said he’s confident his flip flops will appeal to China’s growing middle class. Prosperous Chinese citizens are hungry for Western products, especially the 220 million people between the ages of 15 and 24.
“There is no better time to export,” said Laurel Delaney, founder and president of GlobeTrade, a Chicago-based marketing and consulting company that helps small businesses expand globally.
Delaney said the U.S. Commerce Department offers a variety of free and low-cost services to encourage exports. Commercial officers can provide research on specific countries, set up appointments and organize trade missions. The Obama White House is also promoting international trade through the National Export Initiative.
Back in New Orleans, Berner said he paid Export Now a $3,000 annual fee to help him promote and sell products via Tmall.com. In exchange for the fee, Export Now staffers will be providing advice, handle all the paperwork and conduct all transactions in U.S. dollars. Clients start by shipping at least one cubic meter of products to Export Now’s warehouse in Shanghai. The company, which launched in 2010, also takes a percentage of sales, usually under 15 percent.
To succeed in China, Lavin said you need a successful product with attributes and features consumers respect. Pet supplies and baby products are in high-demand. “Even if you just have a reasonable niche market [in China], you can still earn $10 million a year,” he says.
Chinese consumers are very brand-conscious, especially when it comes to buying iPhones and Levi’s jeans. “Your brand might not be at the level of Apple or Levi’s, but if you make after-market Chevrolet parts, that would make a difference since Chevy is a huge brand in China,” Lavin says.
Delaney also helps small companies export products and services.
“I help my clients look at the world to determine the market for their product or service,” says Delaney. Right now, she said consumer products, health and beauty and food products are very popular. For example, she’s helping a client export high-end chocolate to gourmet shops in Dubai.
Lavin and Delaney stress that it’s critical to have a strong and stable domestic business before you look overseas. Exporting requires money and patience. Doing your homework to fully understand the market is critical to success. Many U.S. companies start by selling to Canada or the United Kingdom where tastes are similar and English is the primary language.
“Make sure you are communicating [about your business] like mad on social networks,” says Delaney. “If you keep communicating about your products, someone will eventually contact you.” Attending trade shows where many foreigners go to source new products is also a good way to test the waters.
Jane Applegate is the author of 201 Great Ideas for Your Small Business, published in all formats by Wiley & Sons. The Applegate Group provides marketing services and produces original small-business content for television, print and websites. For information visit theapplegategroup.com.
Photo credit: Courtesy Feelgoodz