In the run of expanding direct selling business to new horizons, direct sales business often lose customers, distributors and credibility in their existing market. This is because they follow the same strategy and decisions for every market they expand. The markets are classified into four: Beachhead twins: These are usually called as twin market since it will be similar to the home country in the aspects of product expectations, legal structure, payment systems, and logistics. Community-powered markets: These are cross country market where the business will already have existing customers. The business should only do to activate the existing community by offering special offers and bundles. Tech-savvy markets: Here, customers and distributors will be technology reliant. The companies should localize payment methods, logistics, and customer support system since the use of E-wallet and ecommerce will be high. Complex markets: The growth potential will be high but also the risks and challenges will be high. Do thorough research and develop plan with fewer products and resources with third-party fulfilment and strict onboarding process.
Direct Selling Expansion: Key Strategies for International Markets
Understanding Cross-
Border Markets in
Direct Selling
Introduction
• As the direct sales business grows, they start to expand their business to
international markets.
• It is essential to know the effects of overexpansions through Sprawl
impact metrics.
• Companies should structure a solid international expansion plan of the
business not with sprawl but with focus.
Sprawl and Focus-Differences
SPRAWL FOCUS
• Too many countries • 2-3 markets
• Complex payments • Reliable payments
• Slow decisions • Faster decisions
• Compliance issues is high • Have stable compliance issues
Four types of markets
Beachhead twins: They are know as twin markets which is similar to the
home country which has similar product expectations, legal structure,
payment systems, and logistics. 90% of the processes should be kept
similar to the home country.
Community-powered markets: These are the cross-country markets
where you have already existing customers. The companies should ensure
to build their community with attractive offers and bundles.
Tech-savvy markets: Here the customers and distributors will be well
reliant on technology and online platforms. The direct sales companies
should make sure they localize payment methods, logistics, and customer
support system since e-wallet and e-commerce are highly used.
Complex markets: Here the market will have high potential growth, but
also the risks and challenges for the operations will also be high.
Companies should be doing a thorough research and have a developmental
plan.
Setting the “Expected-to ROI”
Expected-to ROI = (Expected Contribution in dollars ×
Survival curve) − (Run-rate OpEx + One-time setup)
________________________________________________________
(One-time setup + Working capital step-up)
There are smell tests that help the companies to identify the warnings
before the occurrence of errors.
Compensation exceptions: No matter what, direct sales companies should
not change their compensation structure for distributor requests or single
country preferences. Permanently excepting rules will leads to affect the
brand credibility in the existing market.
Pay cycle frequency: Distributors should be payed at a correct frequency
that does not affect the cash health. It is because returns and chargebacks
can give company a loss.
Reverse logistics: Logistics expenses can be increased by customer
returns, exchanges, and in-transit defects. For some cases, returns may be
applied through email which can cause customer frustration. By using
prepaid return labels, partnership with local logistics services, these problem
can be solved.
Claims and content: With distributors expanded globally, product and
income claims can be arised. Companies should bring content related issues
under a centralized “green-copy” asset library that should be approved by all
the marketers.
Data and privacy: Different countries have different laws. Direct sales
companies should be aware of the laws of each country and they should be
well know about where their customer data goes.
Support hours and languages: Direct sales companies must
have different time zones or an AI-powered chatbot for their global support
where they handle multiple languages and time zones.
Sequencing your international
expansion
Product road map for international expansion as waves.
Wave 1: Focus on beachheads markets 2 or 4
Wave 2: Mix of one community-driven market and one tech-savvy market.
Wave 3: Know one complex market with investment decisions based
purely on contribution and not assumptions.
9
A 90-day plan to global expansion
Days 0-30: Within the first month, analyze and study the market, finalize
the expansion scorecard, get risk approvals from finance team, set
compensation rules and product list. Give distributors the proper training
materials.
Days 31-60: Take this time to test scenarios. Monitor how the distributors
and customers onboard digitally or physically and take a review every
week.
Days 61-90: Take this time to take effective and clear decisions. If your
goals you set have met, you can no worry and expand your market into the
new cities.
10
READ MORE:
www.epixelmlmsoftware.com/blog/cross-border-
expansion-strategy
Epixel MLM Software
www.epixelmlmsoftware.com
Thank
you
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