Three ways for small businesses to enter Latin American markets

Three ways for small businesses to enter Latin American markets
Enterprise Nation
Enterprise NationEnterprise Nation

Posted: Thu 6th Jun 2013

There are many ways for small businesses to enter Latin American markets - and the benefits from these growing economies can be considerable. In the first of two posts on the topic, Gabriela Castro-Fontoura, author of Doing Business with Latin America****, considers how it's done.

Business with Latin America | Gabiela Castro-Fontoura of Sunny Sky Solutions

1. Target the region with your ecommerce website

The explosive growth of -commerce in Latin America makes it an attractive option, writes Gabriela (left), and some British small businesses are already shipping parcels from the UK to Latin America. Growing this channel, however, doesn't come without its challenges. You'll need to think about translations and search engine optimisation, but also about payment and delivery options.

Bear in mind that weak after-sales support can often let a good ecommerce business down from the point of view of Latin American consumers.

2. Sell direct to retailers and consumers

Selling directly to a retailer is a possibility but by no means easy and depends on your business and your sector. If your brand is already well-known worldwide, you stand a better chance of being able to speak to the buyers. In this case, be prepared to travel to meetings. My experience is that the stronger buyers will normally deal with an importer/distributor/agent because they normally do not import directly. Sometimes smaller buyers will import directly but this option is unlikely to give you much growth in the long term. For example, the iconic British brand Clarks shoes is expanding into Uruguay. Clarks is selling directly to one shoe shop chain. However, they did not approach them directly but through the careful work of their regional representatives, who went through a strict selection process so that the Clarks brand would be carefully looked after. There could be a possibility that Clarks might test the market and then gauge the possibility of opening its own or franchised stores. I have personally worked with fascinating British brands trying to sell to Chile's main department stores (who are indeed huge buyers) but they would not talk to us unless we had a representative within Chile or at least in the region. They loved the products, but they wouldn't deal with a UK company. It's up to you to do the work. If your brand is not well known, it's more likely that will you need a distributor or agent to work with you to develop your brand in the region (and therefore they will take a margin too).

"Some companies may love the products, but won't deal with a UK company. Just like Latin America might seem very far away to you, so does the UK to them."

International trade | Planet Earth

3. Use a distributor

Using a distributor is often the ideal route for many businesses, from industrial manufacturing to children's toys. However, it's not easy to find a distributor you can trust to align its business with yours and with whom you can build a long-term professional relationship. Although international trade shows are great for making contact with potential distributors, my advice is not to go for the first distributor that approaches you from a particular country without researching them and your other options carefully.

"Don't go for the first distributor that approaches you from a particular country without researching them and your other options carefully."

Trading with Latin America | Street in Montevideo

For example, I've heard of UK small businesses giving away exclusivity for Brazil without realising how just vast it is and how virtually impossible it is for a small (or even medium-sized) distributor to cover it all. Also, even if you are UK-based, business in Latin America is personal and you will be expected at some stage to meet your Latin American distributors, preferably in their own country, but possibly also at an international trade show. You should also expect to look after your distributors if you want their loyalty and support. It's not just a matter of appointing someone and letting them get on with it. Keep them informed, involved and in the loop with quick, regular phone calls. Gabriela Castro-Fontoura is the founder of Sunny Sky Solutions__, which supports small businesses to do business with Latin America.

Learn to do business with Latin America for just £5

Gabriela's Doing Business with Latin America offers an introduction to small businesses to Brazil, Mexico, Chile and other growing markets. It's available as a downloadable eBook from the Enterprise Nation booksho. Just click on the link below to find out more and buy your copy. [product id="68464"] Photo credits:  Joshua Paul Shefman (bottles), Royce Bair (Earth), Christian Ostrosky (Montevideo street) via Compfight cc

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