Wednesday, March 26, 2014

3 Key Factors to Consider when Launching a Foreign Product in the USA!

It is no secret that the US is the largest consumer market in the world gobbling up almost 29% of the total market.  To put that in perspective, total household spending in the US is a whopping 3.4 times more than households of the next closest country.

It is this mass consumption of goods and services that beckons to manufactures the all over the world to bring their products to the US.  Thoughts of doubling or even tripling their current sales efforts run rampant and expectations skyrocket.

Although the right product sold in the US, in the right way can surely be a company game changer, there are several factors that should be considered before beginning your US product invasion.


  1. Market Experience - The first thing any manufacture should do when looking to expand into the US is find someone who has hands on, “real world” product sales experience.  I cannot stress this enough!  Every market is different, from packaging and product copy, to websites and social media, to buyers and logistics, the strategies you are accustomed to may not work on your new battlefield and your company will need guidance before, during and after your launch to be successful.
  2. Commit to the Long Term - If you are considering launching your product in the US, it is important to understand the process will be a marathon, not a sprint.  From manpower to capital, you must prepare to “slug” it out for at least 24 months before any significant, recurring sales will begin to flow.  Can it happen sooner than 24 months?  Of course!  However, strategically your company will be better positioned if your expectation is 24 months and the process goes a bit faster.
  3. Open a US Based Company - Once you have a qualified consultant and you have created a long term strategy, it will be time to open a US registered company.  Although this is not required to do business with US based retailers, the process of set up, payment, credit card processing and logistics will be vastly more efficient if you do.  I understand this takes some commitment and a huge leap of faith, however, it is very difficult to “kind-of” do business in the US.  The commitment is either there or it is not.

The US consumer market is the Holy Grail of product sales and as such is not tamed easily.  Much experience, patience and determination is needed to master this market.  However, once mastered, it will take you for the ride of your life!

As a retail product consultant and Costco expert, I am often asked about bringing products to the US.  Over the years, I have helped multiple companies prepare, launch and manage their US retail product business.  Below are some of the most common questions I receive during my free consultations.  I hope you find them helpful.


  1. Will US retailers buy full containers? - The easiest answer is yes, but not at the beginning.  All US retailers will want to test products to ensure they will sell prior to making a large commitment.  Once a successful test is complete, most large US retailers will be open to buying full containers FOB if there is a significant price advantage for doing so.  Please note:  Even if the retailer is buying full containers from overseas, you may still be required to maintain some domestic inventory for emergencies and quicker fulfillment.
  2. How many samples will I need to shop my product?  Depending on the product, I would recommend at least 50-100 production quality samples when introducing your product to the market.  These samples should not be “hand made” (if at all possible) and you must be prepared that in some cases you will not get the samples back, even if the retailers chooses not to carry your product.
  3. Will retailers prepay for product?  No!  Once your product is established and selling well, you may be able to request a retailer provide an LC on large shipments, however; unless your product is the new Cabbage Patch Doll or Power Ranger toy, you must be able to finance product and terms of up to 90 days to be competitive. 
  4. Does my product need a UPC or EAN?  Yes.  All products sold through mainstream retail must either have an EAN or UPC.
  5. Does my company need to have a US website?  The answer to this question is more of an opinion on my part.  Yes, I believe in order for your product to be competitive and have a real chance, it must be represented and sold on a website designed and written for the US consumer.
  6. Will I have to pay duty on my product when importing it to the US?  This is a product specific question as products are treated differently depending on what category the fall into.  I recommend contacting a US customs broker to help you with all importing product questions and fees.  Western Overseas Corporation out of Long Beach is a good one.  www.westernoverseas.com
  7. Is Product Liability Insurance required?  Yes.  All major retailers require you to carry PLI (Product Liability Insurance) with the specific retailer named in the policy.  A minimum of $2M per occurrence and $4M aggregate is generally required.

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