Find international clients

A market entry strategy will help you identify the best way to sell into a new market. Your strategy should evaluate some of the major options for market entry, which include direct exports, indirect exports, partnerships and acquisitions/investment.

You also have to evaluate if your first client is an SME, or a larger multinational or government client and define your strategy based on the client's characteristics. In some markets, foreign governments can be high-potential clients for Canadian companies.

Forms of market entry

There are many ways to enter a foreign market aside selling directly to an international customer. These are some forms of market entry with some reasons why you might select one method over another.

• Selling directly to foreign consumers: This method involves no intermediaries and thus has a higher potential for profits and will grant you more control over the sales product. However, this method also requires a lot of effort to adapt your product and business methods to fit an overseas consumer market, and it can be risky if you do not know the market well.
• Selling directly to foreign businesses: Again, no intermediaries are involved with this method. It has the added benefit of simplifying the sales process as there is a smaller number of customers and they are easier to connect with. Also, business consumers can be found more easily, particularly through tradeshows.
• Partnering with a larger Canadian exporter: Using this method will result in some loss of control over your sales, but will grant you more opportunity for sales growth. To engage in such a partnership, you will need to persuade a larger company that the arrangement is in its interest, by persuading them, for example, that you could make a valuable contribution to their supply chain or that you can offer a unique contribution to their line of products. Networking through industry associations, chambers of commerce, and boards of trade will help you find these opportunities.
• Partnering with a foreign company: Local partners will have local knowledge and contacts, which will give you an advantage in the market. They may also be able to help you expand your sales into nearby countries.
• Foreign direct investment (FDI): This involves creating a direct presence in a market. Some forms of FDI include:
• Setting up a foreign sales and/or marketing office
• Setting up a subsidiary in the market
• Acquiring or merging with a local company
• Licensing product or process to a local company
• Establishing a franchise
• Working with a contract manufacturer
• Establishing strategic alliances or joint ventures with other companies.
• Selling through intermediaries: You can hire an intermediary like an agent or intermediary that has specialized knowledge of your chosen international market and product. This could potentially decrease your profits but may be a good way to break into a new market if you do not have the specialized knowledge required. Two types of the most common intermediaries include: 
  • Agents: Agents are not involved in the sales transaction itself, shipping or distribution, and they are generally paid on commission and have smaller product ranges than distributors. They are generally the preferred choice if your product is expensive or complex to install or train to use, such as heavy machinery. Distributors generally will not take the risk of buying high priced, complex products to resell. Marketing and promotions are generally out of an agent’s purview, which means that if you use an agent; you will own and manage the branding, pricing and marketing strategy of the product.
  • Distributors: Distributors buy and sell directly to their customers. This means that you do not have direct control over the selling, branding, pricing or marketing strategies, but they also take care of all the financial transactions and associated risk, shipping and logistics, and after-sales service. Using a distributor lightens the amount of work you’ll have to do, and is good for dealing with unfamiliar markets, but lack of involvement in the sales will make it harder for you to gain an understanding of your market and tailor your products for that market.

Finding an intermediary: You may be able to find an intermediary through your local industry association or by speaking to a Government of Canada trade commissioner. Mission and international tradeshows are other good places to look for partners and contacts.