Pentagon was at the Newegg Seller Summit on the 14th June 2018, sharing insights on how brands, retailers and manufacturers can grow their online sales via marketplaces. During the day, Pentagon Managing Director Europe, Graham Broughton, managed to grab some time with Amazon best selling author, Sarah Carroll, to discuss why some sellers are more successful than others when selling globally, how to avoid key pitfalls of international expansion and to take a look her book ‘Grow Fast, Grow Global: 6 steps to unstoppable international growth in the digital age’ .
Graham Broughton: Sarah, welcome. Huge thank you for taking the time out of your diary today.
Sarah Carroll: Thank you very much for having me.
GB: So, we are at the Newegg event, the Seller Summit here today – what have your thoughts been on the day?
SC: It’s been absolutely great. There have been loads of great speakers to learn from on the importance of online marketplaces in global ecommerce, and how over 50% of all sales are going to be coming through online marketplaces. No-one can really ignore the fact that they should be listing [on these channels] basically.
GB: Lets dip into your book a little bit. What inspired you to write ‘Grow Fast, Grow Global’ and have you always been interested in international expansion?
SC: I have always loved the whole international stuff. When I was a wee lass I just loved learning languages. I speak fluent French and a couple of other languages in a little bit. But you know, that was always my thing – wanting to travel.
Then I joined two global management consultancies. I worked for Deloitte and Accenture, so that was obviously quite international at the time. And because I spoke languages, I kept getting pushed out on the projects that were abroad and overseas. It was like ‘Oh, you know, she was good because she speaks these languages’ and that kind of thing.
So, I ended up working in quite a few different countries and then I set up my own business. I came across what was the time UK Trade and Investment (UKTI), part of the government that helps companies to export. As part of that, we were looking at people’s communications when they were working internationally.
After a little a while (I was doing that from about 2005, so before all this ‘e’ stuff really took over) what we decided is that we would look at websites and how to improve those for international visitors. It could be something, simple like putting +44 on a telephone number, to more complex things. And obviously, as time went on, we started to realise that people were starting to get sales from across the world. So we started working out how to internationalise websites properly, and then of course following on from that came online marketplaces. We started looking at that and how to help companies optimise marketplace operations.
One of the things I love doing though is running workshops and actually inspiring people to do this in the first place, because a lot of people are scared to go international. It’s a big ask to go in international and digital I suppose. Now I have worked with around 700 companies on a one-to-one basis. Mostly small and medium size companies, but it is applicable to larger companies too. I have also trained about 4,000 people on webinars, seminars and workshops, so figured I had had contact with around 5,000 companies.
SC: So, I though about a couple of years ago, it was time to take stock and see (because we had been working so quickly), why to some companies succeed and do really well, and why other companies have not even gotten off the starting block or decided not to do it. And it was really when I looked at that and did all that analysis on that I thought, ‘there’s a book in here’.
So, really everything that is in here [Grow Fast, Grow Global] is the whole journey and everything I have learnt from doing that, reviewing what are the best ways to actually sell internationally and online and, more importantly, how to do it successfully.
GB: That’s amazing, because I think what you have just talked about there is a wealth of experience. At the start of the journey it was quite organic and then it turned into more of a strategic, programmatic approach it terms of how to do it.
GB: And then you can’t do that in terms of scale, talking to 700 businesses and then 4,000 people if you don’t have a really good blueprint to making them successful.
GB: So, can you dip into a few of those points for us.
SC: Yes. So, I think the first thing I realised is that everybody, every single company that we have worked with, going through what I call the international/digital journey, started off knowing absolutely nothing about it. They’re completely oblivious to knowing that they want to go international or digital.
Then they start to get a little bit of knowledge about it and they go into this stage and think ‘well we should do that but…’. They then hit the stage of procrastinate where basically they’re just doing nothing about it, but it is still on their to-do list. And I have had clients who have stayed in that stage. Literally I met someone in 2008 and she started updating her website and taking this seriously in 2016. So, you can imagine all of the lost sales she has had in all of that time.
And then you move on and the next thing people generally do is deviating. They say ‘oh, my friends cousin does websites, he can do this’, and then they make a botch job of it. But despite that they tend to get sales. So, then people tend to start taking it more seriously. They start to think, ‘oo there might actually be something in this’, and it is those first few sales that convince people from a standing start that they can do it.
But a lot of companies now, and I know a lot of companies you work with, are at the stage that I call dedicated. So well over 50% of their business will be coming from online and it is core part of their business, so they are taking it seriously. It is at that point, I think that it is really important then to start going international. If you have a fully functioning business in the UK, in our instance, or in your home country if you are not in the UK, then that is when you can start looking at all the complexities of the things we have been looking at today.
The first market you go into is always the most difficult. So, for example, if you are going into the US that is always difficult. This is what I call the duplicate stage. You then have to understand all of the international delivery, all the returns, the tax, you know all of the other things.
GB: And does your book pull those pieces out and say you need to consider these items?
SC: Yes. What we do is put together the ‘Grow Global’ method which tells you the six steps, which are the six steps in the title, that you need to go through to actually grow global. And there are checklists within each of the sections as well, so you can literally see if you have done them. And if you haven’t done them, do them before you go onto the next stage. Hopefully it is really helpful to people.
GB: Yeah, it does sound it. We are obviously here at a marketplace event today, so in terms of the ‘Grow Global Strategy’, do marketplaces play a specific chapter in there? Or how do you talk about them?
SC: For me there is a major distinction between [digital channels], and people get confused about where they should invest their money in digital. The digital sales platform, which would be your website, ecommerce, online marketplaces and selling though social or selling through partners say in other countries as well. Once you have got those digital sales platforms up and running properly, then you can start spending money on digital marketing, such as social ads or anything else that you might be doing.
I think you have to get a balance between all of those digital sales platforms and it is about finding for your business, for your category, your products and your customer types what is the best balance. Some people might invest a lot more time on online marketplaces and think that is the place to go. Others might start setting up social stores. So, it just depends on what your business is doing and what is the best combination for you.
GB: And in terms of for you, you have been doing this for over ten years now, have you got good success story that you can share with some of our readers today?
SC: Yes, actually one of my clients. She has written the foreword for the book, is a lady called Niamh Barker from the Travel Wrap Company. They sell absolutely beautiful cashmere wraps; actually they started as travel wraps, but you can wear them anywhere you want to. And she started off selling through partners, distributors and stores, and things like that at the beginning. But what she found, even though they are sort of a luxury product, was that her margins were being eroded and she didn’t really have much control over her brand while she was doing that.
So, I had a meeting with her a good few years ago now and sort of said to her, ‘well why don’t you go pure-play online’? And that is what she has done over time and has gotten rid of all her distributors and stockists, and now she sells more or less exclusively online. So, she started off on a website which was pretty ropey.
GB: It’s a technical term.
SC: By her own admission, we like to keep it simple. But now it is one of the most beautiful websites, that I’ve actually seen. She doesn’t sell on online marketplaces right now, but she has increased her sales absolutely massively – over 100% in the UK and over 400% in the US – and she has an internationalised version of her website for the US.
GB: And obviously because she is owning that proposition now and isn’t going through redistributors she’s got more margin in the products.
GB: So, if her sales are going up 100% her margins should be relevant to that which is an absolutely phenomenal success.
GB: So, if that is a success, what would you highlight as potential pitfalls? What are the alarm bells you really need to be considering when going global?
SC: I guess the thing is not doing your research before you go. For example, you go ‘well I will list on Newegg because I have been there today’, and that could end up being the absolutely perfect thing for you, but you really should work out which countries you are going to and then do generally do them one-by-one.
A lot of people spread themselves too thinly, especially if they don’t have big marketing teams or digital marketing teams – so really don’t to that. Do them one-by-one and make sure you are doing them right. You know the online marketplace and the right country for your customer base.
I think another big thing that people think about digital is that it is a cost not an investment in the business. But I look at it that, yes it is a cost, but you don’t need a sales person or another person in your team, and you are actually reaching people who are in buying mode online, plus you can reach across the whole world.
Another thing is not calculating your margins properly.
GB: Yeah you mentioned that in the panel session.
SC: Yes absolutely. I have people whose sales have gone up massively, but they are still not particularly profitable. So, you might have 400% growth in sales but you’re not profitable or you are selling on a marketplace at a loss.
Its really important, and it doesn’t take long. Like seriously it takes like an hour to just go through and open up an excel spreadsheet and just put in how much your product costs or how much you buy it in for and literally add in all the costs. Particularly on online marketplaces, their costs are so transparent. So, it is very easy to put them all in. The listing cost, if there is a monthly cost, and just start listing the packaging, the postage, the warehousing. You just go through and at the end you will be able to see whether you have enough margin to actually do it, because we are in business right.
GB: Exactly. And that is a really, really good point because you don’t even have to say right I want to switch on America and go through the logistics piece, because if it doesn’t make sense from the economics part of it, it’s a non-starter straight-away.
SC: Exactly. I have a client the other day that came along to one of my workshops, and she went away and started doing this, and when she came back she was like, ‘oh we have stopped selling so and so to one country because we just realised that we were selling at a loss.’
GB: Perfect, absolutely amazing. I think what we are going to do is bring the interview to a bit of a close. Is there anything else you would like the readers to take away from the rest of the day, apart from buy your book. Or is it buy your book?
SC: You could buy the book! I get that if you buy the book it will actually clarify what you need to do overall. But no, I think the thing is, don’t be scared and get started with it. And if you are already selling and selling internationally then make sure you are performing in each of the markets you are in already and put your effort into that first, before starting to go into other new markets. Make sure you’re balanced but you’re not too thinly spread.
GB: Fantastic. Really appreciate your time today. All this information will be available on the We Are Pentagon website and also on the Retail Without Borders website . I look forward to reading your book and once again thank you for your time.
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