How can SMEs establish a worldwide sales and logistics system?

 

One of the key talents any entrepreneur must have, especially when looking to export, is the ability to distinguish which things you must do yourself and which are better delegated to experts.
When David Gutfreund set up The Light Factory, a lighting supplier in his home town of Eccles, he knew the key to success would be to provide the best and fastest possible service to his customers. For this, and to look beyond the domestic market to start exporting overseas he turned to Amazon.
His business model emerged from the turmoil of the financial crash, when the distributor he worked for went bankrupt. To get back on his feet, Gutfreund researched the lighting business. “I identified the need for an online lighting retailer, as most retailers were operating as dropshippers where they do not have their own stock,” he explains.
A warehouse was set up supplying the UK directly from their own stock to provide the speediest possible response to orders. Gutfreund also signed up with Fulfilment by Amazon (FBA), where some of his stock is stored, picked, packed and shipped to customers by Amazon on his behalf. This has helped open up new markets and grow the business further, and enables Gutfreund and his staff, which has now grown to 80, to concentrate on developing new products and fostering relationships with customers.

 

A global scale

 

Their main shop window for overseas sales is Amazon’s website, and Amazon deals with payments and the inevitable paperwork as well as the logistics of physically delivering every order. The combination of data and physical networks that spread worldwide gives a power and reach that The Light Factory could never hope to achieve on their own, certainly not in any reasonable timescale, at reasonable cost.
Each website is in the local language, eliminating the main difficulty that many SMEs foresee when they start to think about exporting abroad.
“Amazon is one of The Light Factory’s largest selling channels,” Gutfreund says. “Thanks to Amazon, we have been able to export to the EU, with more and more
customers from Germany, Italy and France shopping with us online. The UK remains our biggest market though, and doubles in size every six months. Amazon has been a real engine for growth for us in getting new customers.”
Online marketplaces make exporting simple for many small companies like The Light Factory, says Doug Gurr, UK Country Manager at Amazon. By giving them an instant shop window around the world and outsourcing elements of their fulfilment operations to Amazon, SMEs can expand their horizons and grow their business.

 

Business benefits

 

“Amazon has created a suite of support tools and services for exporters by managing currency exchange, local translations and providing global delivery and distribution. As a result, in 2016 alone, UK businesses selling on Amazon’s eleven websites in seven languages achieved export sales of £1.8 billion, up 29 per cent year-on-year,” Gurr explains.
Even just filling in the forms is easier, especially in emerging markets. “Take China, where there’s an enormous demand for high quality authentic British goods”, Gurr says. “Last year we launched the Amazon Global Store, which enables businesses large or small, to sell to our customers in China directly through our Amazon China website. This removes some of the time consuming and often difficult tasks when exporting to new markets, including translating product information, providing local payment options, customer services and handling any customs remittances. Every day, we are seeing more UK businesses expanding their horizons by offering their products on a European or global basis, opening themselves up to tens of millions of additional potential customers at the click of a button.”