After a couple of painfully expensive and time-wasting experiences, I now have a strong relationship with a professional and committed distributor. They're big enough to have significant experience and reach throughout Australia, but also relatively new to the sauce/condiment market, meaning there is a genuine focus and commitment to act as a partner in building a business and a brand - versus simply an order taker that carries a large catalogue of other products.
Currently we have close to 200 customers in Australia, are about to embark on a nationwide marketing push into the hospitality and food service sector and are planning on rolling out a couple of new ranges with them into Australia.
Can you tell us some of your war stories?
Where do I start? As a small company and new to the market - excited, and possibly blinded, too, by the upside of entering into Oz - it was very easy to fall for the fast talking of companies pitching their services and experiences to gain distribution rights. And I fell for a couple of those.
I've been burnt on trust, and have learnt since that having a solid yet transparent legal agreement in place is the best approach for both parties. It strengthens the relationship, as each party knows where they stand and the expectations of each other in the relationship are clear.
But it took me two years of more time and money than I had anticipated to learn this, as once you are in the wrong relationship, it can be bloody hard to get out. I also found it pretty hard finding people in similar sectors that had been down this path and were prepared to share advice and experiences. So, in my experience, going into Oz has involved a lot of trial and error, learning from mistakes and plenty of research.
I've also learnt a fair bit trying to crack into the big supermarket chains. It is a daunting yet very exciting prospect to think your products could be sitting on the shelves of 1000-plus stores at the swipe of a pen by head office. But my experience was given the dominance of house brands there's very little room for new brands, and higher risk. These big chain stores seemed to be looking for significant margin in the product, and a significant investment made by us in terms of marketing to ensure our product moved off the shelves. And in Australia, to market nationwide means millions of dollars of investment.
My advice is to not explore this road until you have already established a market for your product and brand awareness elsewhere. That's because you will not be able to make anywhere near the margin you may be possibly achieving from the more 'traditional' market. And if you do already have a presence elsewhere in the market when one of these big chain stores wants to 'chat', at least you have some leverage to negotiate terms.
What other advice would you have for other small business owners considering going into the Australian market?
Seek the right resources or people to provide governance and guidance. In my experience, that's not that easy, as the major brands that are succeeding in Australia are owned predominantly by multinationals that don't really give a hoot about providing advice to a smaller brand entrant.
And if entering the Australian market is important, make sure you have your own back yard sorted first. You need a place to call home if the Ozzies start beating you up in their playground. And in business, in their country, it is a dog-eat-dog world, and history shows that young New Zealand businesses wear milkbone undies to the game.
Coming up in Small Business: Wearable technology is one of the hottest sectors in high-tech. What are some of the cool companies operating in this space in New Zealand? If you've got a story to share, drop me a note: nzhsmallbusiness@gmail.com
