The United States may be reaching a saturation point for some product categories. “With 95% of the world population and 70% of the purchasing power outside the United States, growth for your company could be exporting outside the United States,” according to Laurel Delaney, an expert in exporting and the founder of GlobeTrade.com and Women Entrepreneurs Grow Global (WEGG). She is also the author of Exporting: The Definitive Guide to Selling Abroad Profitably.
“The natural hair market in the U.S. is becoming saturated,” said Aisha Ceballos-Crump, founder and CEO at Honey Baby Naturals. “There are now three to four brands with similar stories and ingredients to my products.”
“I am Puerto Rican, and my husband is African American,” said Ceballos-Crump. “Our children are multiracial with multi-textured hair and skin types.” One daughter has severe eczema. Up until then, growth in the hair category was driven by segmenting the market by race, age, etc. Instead of buying individual products for everyone in her family, she wanted to create one product that everyone in the family could use, regardless of the texture of their hair. It also had to be made with only natural, healthy ingredients. Recognizing that she could not compete with the marketing budgets of big, multinational consumer packaged goods manufacturers, she decided to market in a different way.
Ceballos-Crump graduated from Purdue University as a chemical engineer. She had worked in the industry for 15 years, doing everything from determining ingredients, formulations, manufacturing, sales, distribution, and marketing. She also knew the benefits of honey. Her grandmother had used it in everything from tea for the sick to creating hair and skin treatments.
In 2016, Ceballos-Crump launched Honey Baby Naturals. She sent the product to online editors and social media influencers. “There was a lot of buzz around the product,” she said. At the first trade show she attended, people lined up to speak with her. Someone she knew from The Moscoe Group — a company that links suppliers to retailers — connected her to Target.
Normally a confident presenter, this time she was nervous. No surprise — after all, she was talking about her fourth child. “When you’re creating a new product category, there can be resistance,” Ceballos-Crump said. The idea of one product for everyone in the family was contrary to buying trends at the time. Yet, she overcame the buyer’s resistance, and Target became a customer of Honey Baby Naturals in its first year of business. By the second year, CVS, Rite Aid, Walmart, and Sally Beauty were on board. And this year, the company already has expanded to 1,200 Sally Beauty stores and 900 Walgreens locations.
The goal was to create reasonably priced products — not the lowest. Ceballos-Crump refused to scrimp on using locally sourced ingredients and (mostly) domestically made packaging. However, she could save money by sourcing the triggers and sprayers from low-cost manufacturers elsewhere in the world, which would allow her to pass the savings on to consumers. Marketing costs are kept low by relying on social media, influence marketing and public speaking engagements.
Ceballos-Crump first learned of Alibaba.com when she was trying to source component parts. It is an online platform that connects businesses to suppliers of components from around the world, offering a 100% satisfaction guarantee.
“Because buying shelf space is so expensive, we kind of hit the wall in domestic sales,” said Ceballos-Crump. To continue to grow her company, she decided to export Honey Baby Naturals. Since exporting required a lot of additional learning, she joined ExporTech, a national program offered in Chicago that is put together by the National Institute of Standards and Technology’s Manufacturing Extension Partnership program and the U.S. Export Assistance Centers of the U.S. Department of Commerce.
Indeed, it was quite a learning experience. Because of duty taxes and shipping costs, it was more expensive to do business outside the United States, so Ceballos-Crump had to learn about financing options for exporters. “Keeping shipping costs low is challenging,” she said. “You can spend 30 days on the water, which means you don’t get paid for 60 to 90 days,” she said. When exporting, payment cycles are longer. She would need working capital loans. As a result, margins were lower on exported products. To make up the gap, sales volume is needed, so she put together an export plan.
“I did my first international trade show in Dubai,” said Ceballos-Crump. “There was a lot of interest there.” How could she reach distributors and retail buyers in Dubai and elsewhere in the world? Alibaba.com also enables businesses to find sales distributors and retailers around the world. The platform will connect her with business buyers from across the globe, including many in the Middle East.
Among its other features, Alibaba.com has a tool to translate text messages to another language in real-time. Translators were not needed. Next year, there will be a tool that can do the same for video calls.
How will you expand your sales beyond the borders of the United States?
read more at http://www.forbes.com/entrepreneurs/ by Geri Stengel, Contributor