Friday, May 9, 2008

Trade show participation in the UK

Last month we attended our first trade show in the UK called Natural Products Exhibition. The exhibition took place at Olympia in London. This show was geared towards the retailers of natural products and we participated in it with the hopes that we will find a few resellers from there as this category has been working out very well for us in Canada.  These trade shows are also helpful in building a brand image as well as sending the message to the existing customers that we are still alive and kicking.

There is quite  a bit of cost involved in doing a trade show both in terms of time and money. It also gets very tiring to manage the booth for long hours. Once the show is over, the leads have to be followed up vigorously to get the best out of the show.  Natural Products Exhibition was a relatively small two day show that cost us in the neighborhood of £ 3500. This cost does not reflect the time spent before, during and after the show.  Shahzad, Gloria, Mariam and John did a superb job to plan, organize and work the show. Congratulations to the entire UK team for their successful first show. Here are few of the pictures:

image005 A visitor is picking up some brochures and product pamphlets.
image006 Gloria worked tirelessly for two days to introduce the products to the booth visitors.
image010 Gloria and Mariam are chatting. The Heaven Fresh banner in the back ground was done at the very last minute.
image014 Gloria is explaining the products to a couple of show attendees.
image015 Looks like break time for Mariam. I know from experience that these shows can be very physically and mentally draining.
image011 The DVD player in the picture was running demo videos. I think we need a bigger screen for the next show.

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Sunday, November 11, 2007

Heaven Fresh UK: Current Standing

It has been almost one year that we started selling Heaven Fresh products in the UK. Past twelve months have been a great learning experience.  We faced more challenges than we had anticipated but UK is turning out to be a very good market for us.  Just the online UK sales gave us enough confidence and cash flow to be able to lease a decent warehouse and office.  We moved to the new office four months ago. We are in touch with most of the nationwide retailers to put our products on the shelf in the stores. We have already signed up as a vendor for some of the prominent names in the UK including Harrods (http://www.harrods.com),  Revital Health Stores (http://www.revital.co.uk)   and JB&C Pharmacy (http://www.johnbellcroyden.co.uk). We have launched a separate web site for Ireland.   We have also brought some independent small distributors on board.

We will continue expanding our sales and marketing efforts in the UK and the neighboring countries. Based on the results so far, I believe that the Heaven Fresh UK's revenues will surpass Canadian revenues (our home market) within next two years.

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Sunday, November 4, 2007

Heaven Fresh UK: Expanding into Europe

Opening offices in the UK and Germany is part of our ambition to expand the Heaven Fresh distribution and sales network all over Europe.  The German office has been distributing products to the neighboring countries for quite some time now.  To do a test run, we translated the UK web site in French and ran an advertisement campaign on Google both for France and Ireland.  The frequency, the size and the number of online orders as well as the customer inquiries are usually good indicators of the size and the readiness of a potential new market,  at least from the perspective of a micro-multinational.

As soon as the Ireland advertisement campaign was launched, we started getting orders and the customer inquiries from Ireland. Because of the business friendly regulations of the European Union (EU),  shipping products to other EU countries from our UK warehouse is just as easy as sending the shipments within UK.  Although the results of the ad campaign in Ireland were very persuasive, the outcome from the French campaign was not very encouraging. We were getting very targeted visitors from France but did not get many orders or customer inquiries. Our little experiment led me to believe that French customers are not very comfortable buying from a web site with strong UK markings, including the URL, phone number, address and currency (Sterling instead of Euro).  It is just my personal theory about French consumers' mind set as it is very hard for me to believe that our product features and the prices are not attractive for the French customers.

As a result of our test campaigns in Ireland and France, we launched a new Heaven Fresh web site for Ireland (http://www.heavenfresh.ie) just a couple of days ago. The prices on the Irish site are listed in Euros, and to confirm or refute my own theory about France, we will also advertise this new site in France to compare the outcome with the UK centric Heaven Fresh site with listings in Pound Sterling.

Our plan is to continue our experimentations for various European countries and make bigger moves to setup sales and distribution centers based on the magnitude of the online sales. The whole idea is to minimize the risk by expanding our European distribution network in a step by step and methodical fashion.

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Saturday, November 3, 2007

Heaven Fresh UK: Sales Initiatives

The Heaven Fresh UK web site started generating sales as soon as it was launched in November 2006. After observing the online sales activity for few weeks, we were very confident that just the online business in the UK would be sufficient to break even. This initial cash flow from web sales was our life line.  Being a micro-multinational we did not have the luxury to drain our investment account for more than 3 months. Also, the second round of financing depended on our ability to quickly get the UK office on its own feet.

Although e-commerce has changed the rules of engagement for starting the 21st century businesses, the traditional sales and marketing channels still play a significant role in the growth of a business, especially the businesses involving the marketing of consumer products.  We knew that the real growth of Heaven Fresh UK was dependent on our ability to penetrate the market using all the possible sales channels particularly television and the retail shops. Therefore, we took different sales initiatives to determine the most cost effective ways to increase off line sales in the UK. Following are the short description and the outcome of those initiatives.

Telemarketing

Telemarketing campaigns have worked very well for us both in the US and Canada to get small business owners to sell Heaven Fresh products in their shops. We ran a trial to contact small UK shops in various categories but did not get a very positive response.  From the initial reaction, it seems like the people in the UK do not prefer to conduct business over the phone.  My theory is that the telemarketing works well for us in North America because it is already a norm here.  Because of the great distances involved, it is very costly for the suppliers to send sales representatives for a face to face meeting with the owners of thousands of small businesses scattered between the Atlantic and the Pacific oceans. On the other hand, one could easily drive from one end to the other end of the UK within hours, Therefore, the suppliers introduce their products in person and that is exactly why we do not get a very warm reception when trying to do this over the phone. If anyone has a different experience, I'd be very interested to find out if my conclusion has any merit or not.

TV Infomercial

TV is probably one of the best media to introduce a consumer product to the masses. We specifically tailored the Heaven Fresh infomercial to be able to run it in the UK.  Before we even started the production process, we knew that we will have to get the production approved by BACC (http://www.bacc.org.uk/) for broadcasting in the UK.  We skipped the script approval part and decided to send the video production instead for approval as we were quite confident that we were well within the guidelines based on our experience in Canada.  While the infomercial was approved for broadcasting by the Canadian regulatory body with minor changes, we had a surprise of the lifetime when we got result of the initial review from the BACC in the UK. The extent of the strictness of the infomercial advertising in the UK can be realized from the suggestion for us to remove the word "necessity" as it was debatable whether air purifiers were really a necessity in the UK. In a nutshell, our only choice was to completely redo the infomercial.  It was an expensive lesson for us that before even a single minute is spent on recording and production, we should get the advertisement script approved for TV advertisement in the UK.

Large retailers and chain stores

Getting a few of the large nationwide retailers to carry the Heaven Fresh products in the UK is one of the most crucial factors in our long term success. However, getting these big retailers on board can be a long and costly process. A process that requires both perseverance and patience. We started approaching the large UK retailers in June 07 and got a very mixed response in the beginning. Gloria Baptist-Smith, Heaven Fresh UK sales director, has been doing a tremendous job of introducing the company and the products to various buyers. With her tenacity and experience in the industry, the doors are starting to open for us. She has done a phenomenal job of getting Heaven Fresh UK on the supplier list of few key accounts including Harrods, Revital and John Bell & Croyden in a very short period of time.  I believe it is just a matter of time that the customers will be able to pick up the Heaven Fresh products from a nearby retailer.

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Monday, October 29, 2007

Heaven Fresh UK: The Beginning

I will be dedicating the next few posts to the UK experience as it relates to a micro-multinational distribution company. It has been over a year that we started Heaven Fresh UK and  the UK web site (http://www.heavenfresh.co.uk) was launched in the last week of November 06. 

Given that the Heaven Fresh branch was already doing quite well in Germany,  UK was a natural choice for us to further expand our operation in Europe.  I contacted the UK Trade Commission in Toronto with our intentions to open an office in London in early 2006. UK consulate put us in touch with London based organization called Think London (http://www.thinklondon.com). Think London helps foreign companies get started and settled in London UK.  Before I flew to London, Think London's staff had already laid out a week long schedule for me to meet solicitors and bankers as well as had the appointments setup with real estate agents to see commercial properties in North, South, East and West London. While I was in London, they took me around to get me oriented with the city to be able to chose a proper location for business. My initial experience of the business environment in the UK was extremely positive mainly due to the professionalism of  the Think London's staff.

I was well aware that London was an expensive place to live and operate a business and that we needed to allocate sufficient working capital to compensate for London's expensiveness.  Our target was to break even in first 3 months but just to be on the safe side we allocated funds for 6 months, or so we believed.  With Think London's help I found an office/warehouse that I liked but when it came to signing the lease I came to know that the landlords in the UK wanted a deposit equal to 3 month's rent along with 3 month rent in advance. To top it all off, property taxes are tenant's responsibility in the UK that have to be paid to the government directly by the tenant above and beyond the rent payment to the landlord. I had only allocated rent for two months in the plan and paying six month rent in advance along with "counsel taxes" meant being left with  no working capital.

Seeking more capital from the investors before making even a single sale in the UK meant sending a message that I did not know what I was doing.  Therefore, I decided to activate the plan B to store the products in a public storage and had one and only company employee, Shahzad, operate the business from home.  As expected, we got our first online order within first 48 hours of launching the UK web site. Christmas season turned out to be a perfect time to start the online sales in the UK. In the very first month, we did about £7,000 in online sales. This figure tremendously boosted my confidence. By looking at the first month sales, I knew that the UK was going to be a goldmine for us, given that we overcame all the "UK surprises" and carried out the business as we had planned.

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