Seeing the Bigger Picture: How to Sell to International Customers


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Expanding your business tempts with the increase of your profits, but it also poses some risks. Before you make this great step, consider which method for reaching international customers fits best your current business model and your risk tolerance – this should be part of your business planning process.


Export is the simplest form of reaching new markets. It is a low-risk strategy, first of all because you deliver existing products to new territories and new clients without paying for additional product development. You might also benefit of having less competition. You do not need local representatives or partners, only a reliable system for delivery. However, you do need tax advisory at this point, especially when dealing in the EU, because regulations concerning how much VAT should be paid where may influence your expected revenues.

Licensing and franchising

These methods of growth are among the least profitable, while they require long-time commitment from both parties. The concept of intellectual property lies at the heart of both: the original developer of the brand lends their proven business model, manufacturing process, patent, or sales knowledge to another company for a compensation, which this way gains competitive advantage – while the original developer of the product or brand gains access to the new market. In fact, franchising includes licensing, complemented with a high degree of control the franchisee has over the franchise outlet (which is necessary, since any problems with the outlet damage the whole franchise brand, not only the outlet in question).

Joint ventures

In a joint venture, a foreign and a local party invest money in a new, local company, and they share ownership and control of the venture. When you are expanding your business to a new market in a joint venture, you will most probably be the party bringing the product or know-how to the bargain, why your local partner provides expertise about their domestic market, and take care of all things related to regulatory compliance, real estate, or staffing solutions.

Joint ventures are riskier and less flexible than other methods; as a result, they require greater financial commitment. At the same time, they may afford tax advantages to investors. In some countries foreign ownership of companies is limited, which makes creating a joint venture with a local partner the only way of setting up a company in that specific market.

Direct investment

If you wish to engage in full-scale production and marketing activities abroad on your own, direct investment in a local subsidiary lets you remain in total control of your operations in the new market. This method requires complete understanding of local conditions, which means you must make a bigger commitment, especially in the preparatory phase where legal advisory and tax advisory should also be included as well as a thorough market research. Since you are entering a market on your own, all responsibility and all risk is yours alongside all the profit you expect.

When creating a fully foreign-owned company in a new country, consider where you can expect the most benefits. If you want to enter the EU market by setting up a company in one of the member states, you should first learn about the conditions that each of them offer to investors. For instance, the benefits of Hungarian company formation include the short registration process (less than a week), instantly getting an EU VAT number (which lets you start trading internationally immediately), and the 9% corporate tax (which is the lowest in the EU). In any case, you should choose a destination that best fits your purposes.

Trade intermediaries

At the opposite end of the line, you find trade intermediaries. If you lack the resources or the expertise to enter a foreign market, you can hire a local trade intermediary, who has all the domestic know-how and connections. They will purchase your products at a discounted price and resell them as well as they can. This way, while you are selling your products at a low price, you have no expenses related to marketing, which might make this form of international growth worth your consideration.

International growth step-by step

Even if you are aiming big, you do not have to make the biggest commitment right at the start. When first venturing out of your familiar, local market, you may choose to simply export your goods or find a trade intermediary at their intended destination. You may consider franchising at a later point, which still gives you market reach while you retain control of your brand and generate income through licensing your intellectual property. For a joint venture, you will already need more local know-how to find the right partner, as both investment and control will be shared among the parties.

When you have a more complete understanding of your intended new market, you can also enter it on your own, creating a local subsidiary. Whatever you choose, just make sure you carefully survey your options – or ask for business consulting from experts.


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Lillian Connors
As a senior digital marketing consultant, Lillian Connors believes that the question of business goes far beyond the maximization of profit through different money-grabbing ploys. Instead, she likes to think that ethical principles should be at the core of every commercial venture, paving the way for much more balanced distribution of wealth on a global scale.


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