Thursday, September 27, 2007

Building product distribution network in USA

Heaven Fresh has been operating a branch in Chicago, Illinois from the very beginning.  But for the past four years our sales in the US have been limited to the Internet only.  Although the Heaven Fresh US web site brings in significant revenues, the real business value lies in establishing an offline sales and distribution network.  It is not a secret that America is the world's largest and the most lucrative market.  But what many people do not realize is that it is also the most cut throat market in the world. If the furious competition and the lack of financing does not kill a business then defending a fabricated law suite from a large competitor can bankrupt the company.  One of the tactics that a micro-multinational company can use is to work under the umbrella of a stronger partner. Not only this strategy can help with the financing but also can shield an MMNC from the intimidating and the bullying tactics of the competitors.

We feel that we are finally ready to set foot in the US market. We have started working on setting up a distribution network in the US for Heaven Fresh products. There are several different ways of doing it and we have chosen to distribute products through small speciality retail shops. We are running an in-house telemarketing campaign to bring these small shops on board and get them to carry Heaven Fresh products for resale.  Although it is a long and tedious process, we believe that it is the most cost effective and the safest way for us to proceed in the US. We see more advantages in this approach and some of them are as follows:

  1.  We are able to use our business infrastructure in Toronto Canada for telemarketing to reduce overheads.
  2. There is no lengthy decision making on the business owner's part. He/she just needs to consult her spouse to decide whether to carry the products in the shop or not. 
  3. The payment recovery cycle is relatively shorter.
  4. The risk of non-payment is distributed among hundreds of small resellers instead of a few big retailers.
  5. The sales volume increases gradually allowing a business to reinvest the cash from gradual sales build up to finance further growth.
  6. Once the network is established, it is easier to convince small business to carry new products as well.

The biggest challenge for us  is that our margins are very thin in the US due to the furious competition. The only way we can make money is to build a large sales volume as soon as possible.  The speed, that a micro company can move with, can be the deciding factor between profitability and bankruptcy in the American market. 

We have purchased a list of businesses across the United States and our plan includes making hundreds of phone calls every week to find out if these particular businesses are interested in selling air and water purifiers. If these potential distributors show some interest, we send them product information and marketing material. The information package is then followed up by phone calls to get a 'yes' or 'no'. Sometimes, it can take dozens of phone calls over several weeks to one store owner to get a firm answer.  They key, of course, is to be persistent and not give up on a potential lead until there is an explicit 'NO' from the other side.  If one business does not want to carry the products there are few others down the road and one of them is bound to go for it.

We started telemarketing campaign about a month ago and so far the results have been very encouraging. We are still learning and streamlining the process and our goal is to have at least 500 resellers in our distribution network within one year. If anyone reading this post has some insight in running a successful telemarketing campaign to build a distribution network, I will welcome the advice.

Wednesday, September 19, 2007

First Heaven Fresh BBQ

It's been more than two weeks that I wrote my last post.  Past two weeks have not been very easy. These are exactly the kind of days when I wonder if it was really the right decision to quit the job and get into a business with limited financing and resource. Haaaaaaaaaaah.....So many issues from different offices all at once coupled with some personal stress really got me this time.  I guess that's what running a micro-multinational all about. It tests your limits and then pushes you beyond.  I have learned that the trick is to keep your calm and knock all the problems down one by one. But it's easier said than done. I will try to write in greater detail about the extreme stress of managing a micro-multinational and the ways to cope with it.  But for now let's talk about the happy moments.

We had the first Heaven Fresh BBQ on August 26, 2007.  It was a beautiful Sunday to be in the Morningside Park located at the east end of Toronto. Despite a few minor glitches, it turned out to be a very successful event. Every one enjoyed the sunshine and the delicious food. Here are a few pictures. 

bbqpicnic An overview of the picnic crowed.
irfan_jason_tracy Tracy, Irfan and Jason taking care of the grilling. 
roy_john_joan Roy and Joan Frankel enjoying the food. John's also sitting there in his "Aussie" hat. 
yoramnfamily Yoram brought up the idea of family picnic before the end of summer.  I knew that if we did not do it, he would be harassing me all year long and now he's caught in action. :)
heavenfreshcrowd Is Paula checking out Javad's plate?
celal_jim_monica Celal, Monica, Jim and Irfan in a happy pose.
paula_trace Paula and Tracy worked really hard to organize the picnic. A job well done.

What?  You want a performance bonus for the picnic? :)
john_paula It was Paula's idea to have egg throwing contest. She became the victim of her own idea. John seems happy to dodge the eggs landing on his clothes.
john_brouwer John is doing the prize draw but I still got fingers pointed at for fixing the draw.
jim_celal_winning Looks like both Jim and Celal never won anything in their life before. :)Congratulations!
3_legged_race Three legged race. Azeem literally dragged me to the finish line.
DSC00117 Paula started the egg throwing contest and now she's blaming others for cheating.
DSC00110 Ok, As you can see from my pictures I am not the most photogenic person. But I like this picture :)
imran_speech2 I was fully prepared for an hour long speech. I enjoyed the look on every one's face when I pulled this thick stack of papers out. :) 
imran_speech Believe me, I did not go there straight out of the bed. I look like this because I had to lug a lot of stuff to the picnic spot and it was a hot day.
roy_john_paula People look bored listening to my speech :(  Luckily, I also had a short version ready. Otherwise I would have become the target of all those eggs.
roy_frankel I know what Roy is thinking. 

Roy, I will be more prepared next time. I promise.
heavenfreshbbq1 Heaven Fresh first picnic cake.  I wonder who authorized the purchase of a cake. May be I should investigate and deduct it from their salary :)
heavenfreshbbq Thank you all who attended the picnic and also those who could not make it.

At the end I would like to say that Heaven Fresh could not have achieved this success without the hard work, dedication and sincerity of every one involved.  I feel truly blessed to get to know and work with each one of them. For a micro-multinational people are not the biggest asset of the company but they are the company.

Thank you every one! You guys are the best.