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How to Internationally Expand Your Market in Another Region - GNC | EP. #69

January 25, 2023 | Author: Andrew Maff
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On this 69th episode of The E-Comm Show, our host and BlueTuskr CEO Andrew Maff is with Garrett Sacks of GNC, a consulting business helping CPG brands of all categories to do cross-border e-commerce. Coming from his rich experiences in doing e-commerce in Asia, Garrett is here to share everything you need to know about expanding your e-commerce market to international waters–from importing goods from China and finding the right product-market fit to building the correct e-commerce infrastructures to scale in Asia.

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How to Internationally Expand Your Market in Another Region - GNC

SPEAKER

 

 

 

 

Andrew Maff and Garrett Sacks

CONNECT WITH OUR HOST: AndrewMaff.com  |  Twitter: @AndrewMaff | LinkedIn: @AndrewMaff 

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Garrett Sacks

 

 

Garrett left the US just after graduating college in California in search of adventure and business opportunities in Asia. After 4 years in China, he lived in Thailand, Peru, and Fiji, and brought with him the best practices in ecommerce from around the world. With these tools, he has developed a consulting business and put his skills to use helping CPG brands of all categories increase their reach in the US and abroad.

Transcript: 

00:02

But mostly it's just idea formulation and validation and helping make sure that all of the I's are dotted and T's are crossed type of thing.

 

00:12

Hey everyone, this is Nezar Akeel of Max Pro. Hi I'm Linda, and I'm Paul, and we're Love 

 

00:19

and Pebble. Hi, this is Lopa Van Der Mersch from RASA; you're listening to, and you're listening, and you are listening to The E-Comm Show. 

 

00:33

Welcome to The E-Comm Show, presented by BlueTuskr, the number one place to hear the inside scoop from other ecommerce experts where they share their secrets on how they scaled their businesses and are now living the dream. Now, here's your host, Andrew Maff.

 

00:52

Hello, everyone, and welcome to another episode of The E-Comm Show. I'm your host as usual Andrew Maff and today I'm joined by the amazing Garrett Sacks, who is the International ecommerce lead over at GNC and also has his own consulting business. So we're gonna dive into but Garrett, how're you doing, buddy? Ready for a good show? You're doing Andrew,

 

01:09

thanks for having me on. I am. Let's do it.

 

01:13

Beautiful. Super excited to have you on the show. I know you have, you know, your own consulting business on the international side. And then obviously that's your specialty over GNC. You know, a lot of the sellers that we are lucky enough to have on the show, usually between like the seven to eight figure area and we've had a handful, you know, these larger nine-figure businesses, so to hear, you know, from a business of GNC size, and to get some insight into how the big guys do it, you know, it's always kind of nice to have someone on the show. So I really appreciate you joining us today. I'd love to do the stereotypical approach and just kind of give you a minute here and let you kind of give some more insight into your background. And obviously, your consulting business. Your role at GNC, we can kind of go from there.

 

01:55

Awesome. Yeah, happy to thanks. I guess I kind of come from a little bit of a different background, because I graduated college in 2009, the height of the economic crack collapse, and moved to Shanghai. So I lived in China for about four years, lived in Southeast Asia for a little bit after that, and then moved to Latin America. So I've kind of approached my career, at least, from different international settings, and have picked up along the way, kind of trends of how technology is affecting the way that people shop. And I guess when I first got into China, for example, they were behind the US in terms of say net usage and what was going on in the E-commerce world. But by the time I left there, it is completely swapped. So I've learned a lot from what they do and have implemented some of those, I guess, tactics into the US business. And it's been a fun ride along the way.

 

02:58

And so you have your own consulting business, where you help different CPG brands, kind of execute on some of this, as well as the fact that you have a role at GNC, correct?

 

03:09

Yeah, yeah, exactly. You know, a lot of times, I think, when a big misconception is that international ecommerce or cross border ecommerce requires a lot of logistical infrastructure, or budget or marketing budget, and it's true and any entrance into a new market, you're going to have to probably swallow some red numbers before you get into the bat black, but with kind of some of the shifts with Technology and Logistics options. Smaller brands can enter international markets relatively easily, as well. And so I guess that's something I've been trying to spread the gospel about.

 

03:54

So from the consulting side with the brands that you're helping, what kind of insight are you giving them? What like, is there a service involved? Or is it just kind of coaching them through like, okay, you know, you're going international? Here are some things to consider. Here's the approach you might want to take, like, what's that whole process like,

 

04:11

recently, it's been a more consultative approach. In the past, I would be like more project management. Like I've set up several say nearshoring three PL operations, warehouses in Hong Kong, for example. But mostly it's just idea formulation and validation and helping make sure that all of the i's are dotted and T's are crossed type of thing.

 

04:40

And so is that very similar to your role at GNC?

 

04:46

Yeah, GNC is a very unique business. It's great to see through the lens of a huge corporation with literally billions of dollars in sales, but they do have a different model GNC uses As a franchise model, so in international markets, they pick one partner basically. And that partner enjoys exclusivity over all channels, retail distribution, and E-commerce. So with GNC, I'm kind of an internal consultant to each of those operations. We have about 35 websites internationally. And they have varying degrees of E-commerce aptitudes. So I'll go in and do like a tech stack. Recommendations for them, guide them through any UX or UI changes that they have upcoming and give any third-party tool recommendations as well. Some of them were really big operations, multimillion dollars and others exist only on marketplaces. So I spent a good amount of time on each of the marketplaces as well.

 

05:50

I would imagine that you know, starting to scale internationally and going retail is going to be a lot more challenging than at least for a while staying ecommerce just because of bridging any kind of cultural gaps or anything along those lines. So am I correct to assume that usually, the first step for someone to enter a new market is typically marketplace or, you know, expanding their DTC and to other regions?

 

06:13

Exactly, yeah. And so clearly, GNC is in the vitamin-mineral supplement space, which has different regulations in every country, in the world, basically. But what has really become more popular over the last 10 years or so really, starting with China's cross-border, ecommerce, essentially, the idea is that the importing country will accept products from a Western or developed economy, so long as it goes through their marketplace or their platform where they can exact some taxes on you, but allows you to to enter that market without having boots on the ground, or relabeling product or going through the registration.

 

07:04

Interesting. So when you start, if you're in your opinion is to take, you know, going through a marketplace and taking it that direction, where you're going over to a different market, or a different region, I should say, is that is the thought to stay in a marketplace, let's say, you know, the most obvious being like an Amazon, domestically, and then you know, obviously, you're gonna want to scale it out from there. But then when you go to expand, start to leverage the other regions that that marketplace has available. So obviously, Amazon being in many different regions, would you say it's easier to then expand within those regions? Or is your suggestion to find similar marketplaces in those regions? And start to explore offering your product line on there? Yeah,

 

07:50

good question. I think that because of the ease of Amazon, most people are playing on Amazon already. So you can essentially copy-paste the ASINs into the new markets. And that makes it pretty easy. But overall, from a larger strategic perspective, look at what marketplaces are winning in that in your target market. I used to use Lazada, for example. They are primarily owned by Alibaba, but they operate in Southeast Asia. So I built out the Lazada. Store first in Malaysia, because we had a high degree of brand awareness already, GNC did. And once I built the infrastructure with Lazada and Malaysia, I was easy, it was easy for me to basically copy-paste, and launch in Indonesia, then launch in the Philippines, and most recently in Singapore. So once you build the infrastructure on one, it's pretty easy to apply that to other markets, so long as the marketplace supports it.

 

08:57

I know, expanding into, you know, an international marketplace, there's a handful of obvious challenges, as you mentioned, you know, some logistical stuff and accounting and taxes and all that fun stuff. But from a marketing side, how do you prepare to start going into another region? Especially if you're starting off on a new marketplace as you did with Lazada. Like what was even though you already had some brand awareness there, obviously, you get the added benefit of that, but what's what are those steps that are taken before you decide? Okay, this is a viable marketplace for us to be on.

 

09:30

Yeah, very fair question. And that's where it takes a little bit of where art meets science, I suppose. But product market fit is obviously very important. And so I did some tests just as using landing pages place placing ads on social media and searching in Malaysia. Yeah, it was a little bit of a different experience because we had previously had a partner there, but I'm going through this process currently in Brazil to basically do a full market entry. We're currently being sold on Mercado Libre, but very few customers actually know about the brand. So I have worked with a couple of different marketing agencies. Well, more so creative agencies on creating culturally relevant content that's entirely different than what's in the US in deploying them across all channels, including including tick tock, of course, of course,

 

10:34

is that kind of your go-to starting on a tick-tock internationally, before you start to expand it out there,

 

10:40

I have been able to see success on tick-tock faster than on other platforms. So that's been, that was a pretty quick go-to with this new market entry. But a lot of more established companies have been slower to kind of uptake that and it's tricky because it's kind of a mix between an influencer channel and a marketing channel. Because you have to have good content for it to actually work.

 

11:09

Yeah. Is the focus typically on the organic side or more on the paid side vertex talk?

 

11:16

Well, we've both had to pay.

 

11:21

Of course, everything's paying now. Right? So when you start to expand over there, well, actually, let me backtrack real quick. Going from the US overseas, there's no matter where you're going overseas, there's kind of opinions from everyone about the complications of whichever region you end up going into. I've always been curious, though, what's the theory or the mindset of people in those other regions trying to expand to the US? Is that a similar challenge? Is it more of a challenge at what's that kind of look like? You mean,

 

11:55

international brands trying to sell into the US? Yeah, yeah. It's very easy. The US accepts international shipments and doesn't have a duties threshold. Well, there might be a duty threshold, but it's a very large number. So for personal consumption, you're probably fine. I'd encourage international brands to try to do that. The problem is that all the marketing metrics costs for acquisition in the US are very high compared to a lesser developed economy. So where we get to play with US dollars in Brazil, for example, my marketing dollars take me way further than then trying to go the opposite way.

 

12:38

To Blunt, The CBG barons that you're mainly consulting for what size? Do they vary, and

 

12:46

generally, like one to $10 million in sales, they're not, they're not tiny, but not that big.

 

12:53

So what's your you know, you start taking someone on, let's say, they've always sold in the US, now they're ready to expand into another region? What is your first step to figuring out what that region should be and then how to start getting them in that direction?

 

13:10

So I've done an I'm a big fan of using Google Analytics and kind of nerdy out on audience segmentation, you can pick up on on some trends on who is getting to your website from where, and that can identify like you can identify where some growth opportunity is, we've we had some other market validations, like through different marketplaces, Amazon will even show you if international people are trying to buy your product. So that might give you a hint, to go in that direction. But you also have to take into account the regulations on that. One of the biggest caps in the Brazilian business is that you can't ship cross-border anything more than $50. Us. And so that's inclusive of your cost of shipping down there. If you have $10 freight from the US down to Brazil, then that's really limiting the product assortment that you can enter that country with. So that's a key consideration.

 

14:16

I know at least traditionally, from what I've done and what I've worked, with sellers that are looking to go international. Usually, the first thing that they do without even looking at Google Analytics or anything along those lines is they immediately just go to every English-speaking country they can think of especially since most of the sellers we work with are here in the States. Is that is that a similar approach where you kind of just say like yeah, that makes sense because it's easier or are you still a big fan of no let's see where your audience actually is and go there.

 

14:49

By the ladder for sure. And you see big bigger brands or say anyone ready to start looking at international markets generally They will look at the market in terms of its total size. So when GNC was looking at Europe, for example, it was, well, what are the biggest markets there, France, Italy, Germany, Spain, and the UK? So we did a competitive analysis, and it's highly competitive that that category specifically is very fragmented. But we found that it would be way more profitable for us to enter smaller markets in Europe that have less competition. So my, I guess, advice there is as specialization is key. If you just Rinse, lather repeat, then you're going to be competing against a lot of people.

 

15:44

Yeah. Now, the one to 10 million annual brands that you've been working with, for the most part, right? They are ready to go out there, they're ready to kind of scale in that direction. You've figured out which region they want to go in based on the analytics you've looked into. How do you start to work with them, or obviously guide them in the best way to adjust their marketing for that specific culture? I know that Amazon usually the suggestion is, it's relatively quick and painless. You just got to translate your listings and maybe change up some of your imagery, and then you're fine. But scaling a DTC brand. And having you know, an off-marketplace presence is a very different approach. What is your usual kind of suggestions for that?

 

16:26

Yeah, well, language is big. Certain markets, like Japan, for example, are very unlikely to convert on your website, if you don't have Japanese on your website. So there are a number of different tools that you can use that help you kind of Auto Translate, I would recommend finding a, like local expert, or someone who can confirm all of your translations. But yeah, you bring up a good point, because for smaller brands is difficult because the creative content that we'll use is specialized per market. And I try to recycle as much as I can. But again, Japan is a very particular market, and you really need to be speaking to your demographic there, if you're going to succeed, you can get away with it a little bit more with countries that, say, are very much into the United States, maybe Chile, for example. But strong cultural identities will need to be spoken to in their native approach.

 

17:33

Yeah, speaking of the apps and stuff that you mentioned, that's definitely been something I've come across as they'll translate, but like, not great. What, uh, what is the I imagine one of the push backs is what is the cost associated with having someone manually scale and scan your entire website and adjust any content to be able to, you know, reflect a proper translation, especially if they have like, let's say, you know, strong SEO approach where they're creating content and blogs and have a large product line? Like that's a very large project? How do you usually suggest taking that on? Or is that just a, hey, that's going to be your cost of scaling?

 

18:15

I think that's your cost of scaling. I'm, I've been pretty impressed with some of the auto translations, we've used. Then, the cost otherwise, some translation companies will say like 50 cents per word. And when you're doing 10s, of 1000s of words, it's just going to price you at a budget. So I'd be careful with things like your homepage, or like a key, you know, aspects, but if you're just translating articles for the content piece to hit keywords. I don't know if some of those auto-translations are not so bad.

 

18:55

All right. How are you tracking? You know, kind of the image from a paid ads standpoint? I know, you know, bro, as is kind of thrown around as the end all be all, which obviously, we're all aware of not necessarily the case. But how are you tracking results with these clients as they start to go into these other regions? Some I know some businesses, look at each individual region almost as if it's its own individual business, GNC with it being a franchise model, I imagine that's the case there. But are you suggesting you know, if they're in, you know, let's say they're in the states and then they go to Brazil? Are you having them look at their numbers holistically? Or are you having them kind of keep each region a little bit more siloed? Yeah, you have to keep each region each region siloed

 

19:42

one of the big differences I guess, or metrics to look out for when you're getting into a new market is who is repurchasing Well, of course, depends on what you're selling but in like a consumables like vitamins, for example, then you're going to live or die by that by that churn rate. I'm so I've encouraged my clients and teams to really take into consideration the lifetime value and how that might shift over, over, like different markets.

 

20:13

Yeah. So if you're looking at it from a siloed perspective, how do you usually guide? Do you? I'm imagining you probably just go through and map out like, okay, from a budgetary standpoint, if we want to get into Brazil, here's what you know, logistics budgets going to look like, here's what translating your website's going to look like. And then they just basically look at like, as that's their investment into going into a new region, correct? Yeah,

 

20:38

essentially, oftentimes, it really does require a bit of logistical ingenuity as well. There are a lot of carriers in the US who can just pick you up from your warehouse like normal, but also make you pay an arm and a leg so when, when possible, or have like a multi-phased approach. So what I did for GNC and for some of their brands, is you will eat the cost, the extra cost of that shipping from the get-go, and calculate what it would cost you. What is postage, if you are nearshore? What if you used a warehouse that that's much near your target market, or in a free trade zone, for example, and then only tack on to the cost that lesser postage and you eat the difference? And in the beginning, then if your brand starts doing well, then you can actually use that near-shore logistical operation, but plan to eat the extra cost of your shipping in the beginning. Otherwise, you're not going to get a fair barometer of whether or not your product is going to sell well in that market if you're just adding all those costs to what the consumer has to pay.

 

21:53

Good point. From your experience personally, you're consulting with these brands that are between you know, one to 10 million annually, and then you have you know, a pretty nice rollover at GNC, which is a lot bigger than one to 10 annual How does your skill set at GNC kind of, you know, translate over to how you're able to help these smaller brands because I would imagine you know, the budget you have to work with the resources you have to work with the GNC is going to be significantly bigger and better to work with than what the typical one to 10 million annual brands got going. So what is how do you kind of translate like, okay, with what you have in place, here's how we do this at a smaller scale.

 

22:37

That is true. Very good point. It's an It's not like if you have one brand that does 100,000,001 That does 10 million it's not like you just multiply all of your budgets by 10 It's a completely different strategy based on your size and that's definitely true with some of the GNC markets because they're quite large. But on the other hand, we're in, say 30 More than 30 markets internationally and some of those are small operations and they're just barely cracking seven figures and so I will give them the same type of strategic insight that that I would take any small e-commerce operation splitting budgets between your digital marketing channels, leaving time and budget for new tools throughout the year UX UI improvements and then yeah, marketing and content creation.

 

23:31

Nice beautiful Garrett, really appreciate you having the show. I don't want to take up too much more of your time. I'd love to give you an opportunity here to let everyone know where they can find out more about you and your consulting business and then obviously I'm sure they can find GNC they'll be fine with that

 

23:46

yeah yeah I'm pretty available out there yeah, my email I guess is g j Sachs at Gmail, and or you can find me on LinkedIn

 

23:59

beautiful Garrett, really appreciate you having me on the show. Obviously, everyone that tuned in thank you as well please, please make sure you rate review subscribe, and all that fun stuff on whichever podcast channel you want. Or however, they become show.com and watch the rest of our episodes. But thank you all for joining us, Garrett.

 

24:16

Thank you for tuning in to The E-Comm Show head over to ecommshow.com to subscribe on your favorite podcast platform or on the BlueTuskr YouTube channel. The E-Comm Show is brought to you by BlueTuskr, a full-service digital marketing company specifically for E-commerce sellers looking to accelerate their growth. Go to BlueTuskr.com Now for more information. Make sure to tune in next week for another amazing episode of The E-Comm Show.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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