There are numerous examples of direct selling companies that are successful at home but are not doing so well in other markets. Each of these cases has its own reasons. However, we can pinpoint those specific areas where the deadliest mistakes are made. This article covers seven of them.
In many cases, direct selling companies wishing to expand internationally choose to do so with a local partner. And again, most of the time this is not through a joint venture, but through granting an exclusive distributorship in a certain country. Although this might reduce the financial risks, it brings very high business risks if the chosen local partner is not the right one. Unfortunately, direct selling companies still do not cease to surprise me how they are misled by the candidate partners who present themselves as the kings or queens of the MLM world.
Local Manager Hire
Actually, this is an area of failure that is similar to the above. Because again, the failure here is due to not doing the homework properly. A local field leader who has so far built a sizable network organization in that market does not necessarily mean s/he will run your operations successfully. Requirements at a corporate role is very different than those of the field’s.
Appointment of the Expat
Are you sure the person you will leave the company abroad to has had enough international exposure in his/her life? Is that next person at the HQ who is dying to be re-located to an exotic, warm place the right choice? Does that individual have adequate understanding of what s/he is about to face in terms of the legal environment, the business ethics, and the cultural climate, to name only a few?
I have witnessed many missteps in this field, too. Yes, globalization is a strong trend. And yes, billions of people are being exposed to tons of global information on the Internet now. Yet, making business in a foreign culture can be quite different. A company from abroad does not have the luxury of ignoring those cultural differences. On the contrary, what always pays back is respecting and complying with them. This business is truly a people business, to remind.
International Leaders’ Opening the Market
Allowing the international field leaders to open a new market is another tricky area. If not well-monitored, the whole launch project and weeks of hard work behind it, can easily turn into a disaster. On top of the business risks involved, it is very likely that the company may find itself in troubles with the local authorities due to various compliance issues.
While some markets can easily be managed from one central location, it is literally not possible to succeed by doing so in many others. Thus, knowing the difference is crucial. Even if there may no legal requirements imposing a physical presence, some societies are more skeptic than the others. Individuals in such markets just have a need to build confidence in that company before and also, after they join. And physically being there plays a very important role here.
Finally, we have the supervision (and also, guidance) by the HQ. This is vital, point! Some of the companies turn their managerial attention to the next potential market as soon as one has been opened. Some others lose interest in markets where they think they are not growing well enough and start spending less time on these. This is so dangerous. It only speeds up the downfall in that country, negatively impacting the international sales leaders who have expectations from that market.
Expanding into a new country is not an easy task as some tend to think, but it is absolutely not as difficult as some may visualize it, too. It is only a matter of doing the necessary homework well.
Hakki Ozmorali is the Principal of WDS Consultancy, a management consulting and online publishing firm in Canada, specialized in providing services to direct selling firms. WDS Consultancy is a Supplier Member of the Canada DSA. It is the publisher of The World of Direct Selling, global industry’s leading weekly online publication since 2010. Hakki is an experienced professional with a strong background in direct sales. His work experiences in direct selling include Country and Regional Manager roles at various multinationals. You can contact Hakki here.
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