Looking for a way to expand your business? Exports are a powerful driver for the Canadian economy — we exported $502 billion in 2017. They are also a strong tool for multiplying a company’s profits. “It’s helped us grow,” says Dan King, vice-president production R&D at Davey Textile Solutions, Inc (DTS), located in Edmonton, Alberta. “Exports are at least one-third of Davey’s business now.”
DTS specializes in the production of reflective trim for workwear. Through their Houston office, they export to Mexico, China, Bangladesh, Sri Lanka, Trinidad and Tobago, Peru, Colombia, Argentina, and across the United States.
It’s not just the increased profits that are a benefit to firms involved in exporting, says company president Grant Davey.
“It helps with diversification. So you’re not dependent on one market.” If one sector of the economy, such as oil and gas, has a downturn, you’re protected by your strengths in other markets, says Davey.
There’s a lot to do in becoming an exporter — such as finding the best market, understanding regulatory and tariff requirements, working out distribution details and learning about cultural differences — but here are three key steps to consider before you dive into those details.
Be an expert
“It’s more about being pulled into place, rather than pushing. Because we became experts in the area, people were pursuing us,” says King.
“Your reputation is so important and it needs to be already established.”
Your product needs to be unique and making a difference so other people want it, says Davey.
“A quality product is number one. Once that demand is created in the domestic market, you have the opportunity to sell globally.”
One of DTS’ strong trading partners is FireZero, with offices in both North America and China, who produces flame-resistant protective clothing. May Tan, owner and general manager of FireZero, first contacted DTS 14 years ago about the possibility of working together after learning about the company from a customer.
“They do a lot of studying on developing machines and new products,” says Tan. “They make their goods better and better.”
Tan buys thousands of metres of two-inch, high-visibility, yellow reflective tape a year from DTS. On average, one coverall requires 6.5 metres of tape to meet industry safety standards.
“They (Davey Textile Solutions) are experts,” says Tan.
There is a lot to learn around legalities and tariffs, says King. “You want to align yourself with specialists in those areas.”
For the American market, Davey Textiles has an adviser on U.S. trade agreements. Once DTS signed its first contract in China, they immediately contacted a logistics company to deal with getting their reflective trim to Shanghai.
“You don’t want logistics to be a barrier to the deal,” says Davey.
In Latin America, they have a representative who is known and trusted in a region where handshake agreements still have value.
“You need local partnerships or representatives who understand what it takes to do business. We wouldn’t be able to do business in Mexico just by email and a few visits. If you’re not there talking to them all the time, that’s a problem,” says Davey.
Tan — who exports FireZero’s apparel to North America and around the world — says that good partners and good suppliers are essential to everyone’s success.
“There’ve been no problems with Davey in the 14 years we’ve worked together,” says Tan.
Partnerships can go both ways, of course. North American companies can be a known entity and credible partner for global firms hoping to do business in the U.S. and Canada, says Davey.
“You can add legitimacy to foreign partners.”
“That’s your critical element,” says King. “Trust is so important. Business really is all about people and relationships.
“You want customers to say ‘that guy is a good guy and I want to buy from that guy. I trust him.’ ”
“Relationships are key to our success,” agrees Davey.
“You have to be willing to travel; that makes a difference. When I went to Colombia, they couldn’t believe someone from Canada came there. I’ve been to China three times.”
Trade shows are an important way to make contacts and build relationships. At a U.S. trade show Davey met someone from Peru and it developed into good business for the company within a couple of years.
Firms also must be patient, as it could take years to build relationships and sign contracts in a new country. But those relationships will often pay off in additional business, notes Davey, when good customers specify they want your product in their supply chain or will refer you to other businesses.
DTS business with a client in Trinidad and Tobago came from the referral of another happy customer. A growing segment of their business with large beverage distribution companies is due to a recommendation and strong relationship with a smaller company. DTS’ business in Bangladesh is also driven by another customer’s reference.
On her desk in Nantong, China, Tan proudly keeps a soapstone sculpture of a bear that Davey Textile Solutions gave to her on her first visit to Canada.
“I like the people at Davey. They are always very happy, and make you feel comfortable and safe to do business with them,” says Tan.
“I appreciate all their support.”
The Canadian Trade Commissioner Service (CTS) publishes a Step-by-Step Guide to Exporting
Want to start exporting? Take this Government of Canada Exporting Quiz to see if you are ready.
Barb Wilkinson is a freelance writer and editor based in Edmonton