The Exporter’s Journey
Sometimes opportunity knocks. And sometimes it visits your website.
That’s what happened for Matt Wood, the founder and CEO of SCD Probiotics, a Kansas City-based company that uses beneficial micro-organisms in a range of products: environmentally friendly cleaning agents, feed additives for livestock, degreasers for tanneries, even breath spray for dogs.
Several years ago, Wood started to notice that a lot of the visitors to SCD Probiotics’ website were coming from outside the United States. So he started investigating ways to sell his company’s goods internationally.
It was one of the best decisions he’s made as a business owner. Today, SCD Probiotics is in more than 30 countries. Exports account for the vast majority of the company’s sales. To keep up with demand, the business recently completed a $1.4 million expansion at its downtown facility.
“We are, at last analysis, more than 75 percent exports,” Wood said.
Competing on the world stage might seem intimidating, but small businesses like SCD Probiotics are thriving as exporters. According to the U.S. Small Business Administration, smaller companies represent 97 percent of the country’s exporters.
The world wants to do business with the United States. Our products are innovative, and customers trust them more because our regulatory and legal systems tend to be strong and transparent—important qualities when you’re trying to sell food or pharmaceuticals.
Here are some of the most important lessons that Wood has learned about selling internationally.
The Government Could Be Your Best Salesman
Wood has high praise for the U.S. Commercial Service, a government agency that helps American companies sell their goods and services in other countries.
The agency offers an international partner search. A company will go to the U.S. Commercial Service and say it’s interested in selling Product X in, say, Korea. The agency, which has offices in almost 80 countries and more than 100 U.S. cities, will identify potential customers and distributors there.
“They’ll basically do the preliminary work,” Wood said.
For $550 – or more for companies with more than 500 employees – a company can pay to have someone from the Commercial Service contact those potential partners and see if they’re interested in doing business.
“When you look at it from the prospective customer’s perspective, they’re being contacted by someone from the U.S. embassy,” said Wood. And that helps create instant credibility for the American company.
SCD Probiotics spent a few hundred dollars on a partner search in Brazil—where the company will soon do about $1 million worth of business.
“It’s such a great system for generating quality leads that can turn into really strong customers,” Wood said.
The Missouri Department of Economic Development is another great resource, Wood said. The Show Me State operates trade offices in several countries and helps Missouri businesses introduce themselves to international partners. Missouri DED in Shanghai helped set up a meeting for Wood with nine Chinese tannery companies—representing 10 percent of the industry there.
“Many of those leads evolved into sales and customers,” Wood said. “And it didn’t cost us anything other than our expense to fly over there.”
Partners and Paperwork
That’s not to say that international sales are completely effortless. Developing licensing agreements can take time, and they’re absolutely necessary to protect a company’s interests.
SCD Probiotics has also been careful to set other legal boundaries, Wood said. All of the company’s contracts are based on Missouri law, and if a dispute ever arises, the arbitration must be done in Kansas City.
However, SCD Probiotics often hires global law firms that are based in a customer’s country, simply because it’s easier for those firms to handle trademark and product registration questions there.
And the company relies on its partners in other countries to handle some of the paperwork.
“In most countries, you have to get a license to import into the country and a license or registration to sell,” Wood said. “Early on, we had some major challenges. We learned that it’s better to make those registrations the obligations of our customer.”
Get Your Passport Ready
If a piece of business can be handled over the telephone, take care of it with a phone call, Wood said. (He recently signed an exclusive distribution agreement with Italian partners—and he’s never met them.)
Some deals, however, can only be done face to face. SCD Probiotics regularly hosts international business partners here in Kansas City and will send its own teams overseas, too.
“There’s definitely international travel required,” Wood said.
For him, that’s a perk. He studied in Costa Rica and Japan, so he speaks Spanish and
Japanese. He enjoys the travel. Someone who isn’t used to flying across a dozen time zones—and the attendant jet lag—will need to learn how to adjust.
“They’re long trips,” Wood said. “It’s not like shooting over to Chicago for a couple