Trade links via the Internet; here's how some small business exporters are using technology to plug into global markets

Nation's Business, Dec, 1997 by Roberta Maynard

Here's how some small-business exporters are using technology to plug in to global markets.

A man in Bahrain who was surfing the Internet one day last summer happened upon a reference to Sharon Doherty's dog shampoos. The man, who owned a puppy and was searching the World Wide Web for relevant information, found the mention on a Web site set up by a dog breeder in Spain.

That chance encounter in cyberspace led to two positive outcomes for Doherty's firm, Vellus Products Inc., a Columbus, Ohio, manufacturer of pet-grooming products: The puppy owner in Bahrain contacted Vellus and became a customer, and the dog breeder in Spain became the Western European distributor for Vellus after Doherty contacted him.

Such is the power of electronic communication to extend the reach of small companies to markets worldwide.

"The way this [business transaction] transpired just blew me away," says Doherty, president of Vellus. She first experienced the Internet less than a year ago, and now she routinely spends up to two hours a day online, researching overseas markets and domestic and foreign competitors.

The company had revenues of less than $500,000 last year, but Doherty believes the Internet will help boost sales.

The successful conclusion of the European distribution deal also spurred Vellus to ratchet up creation of its own Web site, if www.vellus.com, which was launched recently. "I think the Web site will help business tremendously. I have no doubt that it will pull in people from overseas," says Doherty, who has been exporting for five years. Foreign sales account for more than half of her revenues.

Across Time Zones

Just as the Internet is fast becoming a key domestic business-development tool, companies pursuing foreign markets are finding it an effective--and sometimes necessary--means of reaching business partners and customers several time zones away.

"There are graduating levels of sophistication of usage," says Lisa Kjaer, director of the U.S. Department of Commerce's Export Assistance Center in Seattle. She says there are four steps in the natural evolution of small exporters' adoption of Internet technology:

* Getting electronic mail.

* Building an informational Web site.

* Conducting international market research electronically.

* Offering potential online customers a secure process for ordering and paying for products.

The first two steps have been implemented successfully by a 30-year-old, Compton, Calif, manufacturing company that just months ago started the ball rolling on a plan to export its aluminum door frames. "We've already found the Internet to be invaluable," says Rod J. Gutierrez, president of Modulex, Inc. "E-mail cuts down on phone expenses and, with the time differences, eliminates a lot of wasted effort trying to communicate internationally."

The company's new Web site, www.mod ulex.com, offers product information to people interested in the company's target markets of Mexico and countries on the Pacific Rim. Gutierrez hopes this exposure in cyberspace will attract distributors, customers, and even joint-venture partners to the small company, which last year had revenues of $2 million.

Similarly, Kris Olson, owner of Beater Wear in Bellevue, Wash., says his two-year-old Web site has been an important promotional tool and an effective generator of leads. Beater, which manufactures ski pants, jackets, and accessories, last year had revenues of $65,000.

Olson hopes that the Web site ultimately will help extend his selling season from five months to year-round by sparking exports to countries in the Southern Hemisphere, where the seasons are reversed from those in the Northern Hemisphere.

Dispelling the notion that small companies can't afford an Internet presence, Olson himself created Beater's site, www.beater.com, even though he had little computer experience.

Soon after the site was launched, it was receiving 100 visits a day. Now it averages about 2,700, and Olson expects to boost that significantly through recent arrangements with ski magazines, which will promote his Web site in return for commissions on resulting product sales.

Shopping The Web

Web-generated sales already are brisk for some companies, according to trade specialists in several states, though actual online transactions still are not occurring in great volume.

The most common pattern is for customers to tap Web sites for product and company information, then use faxes or telephones to place orders. Apparently, they do this largely because of online-security concerns. That prompted Olson last summer to offer a secure online-ordering process, which has resulted in an increase in Web orders from overseas customers.

Some nonexporting companies are finding that having a Web site can result in overseas business they hadn't even courted. Hyperspace Cowgirls, a two-year-old, New York City-based developer of children's software, has several European deals in the works even though it has no marketing effort overseas. "We don't advertise overseas at all," says Susan Shaw president of the company, whose Web address is www.hygirls.com. "People just find you."