Expanding your B2B business into new markets is one of the best ways to reach new customers, diversify your income, and increase your revenue. However, entering a new market can be risky, and too many businesses have tried and failed to break through. 

The risk of failure is especially high if you do not have a clear market entry strategy defining how your business will succeed in a new environment. Simply applying the same action plan you used to achieve growth in your home market will not cut it.

We at DJUST have helped several B2B businesses expand into new global markets — and in this guide, we break down two low-risk strategies to help you do the same.

Let’s dive in — but first, let’s talk about timing.

How do you know when it is time to move into a new market?

Moving into a new market is a major undertaking, and the last thing you want to do is make the leap before you are ready. Here are five signs it is time for your business to enter a new market:

• You want or need to diversify revenue. If your business relies on a handful of big customers in the same industry and country, you could be at high risk during an economic downturn. Breaking into a new market can help you diversify your customer base and revenue sources.
• You are facing economic stress. Economic stressors such as inflation and high interest rates can be tough on your business. Moving into a new market can help you reach more customers, some of whom may be unaffected by these stressors.
• Your current market is saturated. It can be hard to drum up new business if your current market is saturated. Meanwhile, overseas markets may have more demand for your products. 
• Your business has been affected by regulatory changes. New regulations can tie your hands and limit your business’s growth prospects. So, you might consider expanding into countries that do not impose the same limitations.
• You are experiencing supply chain disruptions. These can make it difficult to serve customers in one country or region but not others. Expanding to countries that are not experiencing disruptions can help you ensure consistent service and operations.

A framework to build a B2B market entry strategy

The best way to approach entering a new B2B market is to use a market entry strategy framework. Our go-to framework involves three steps: assessment, feasibility, and implementation.

To illustrate how this works, let’s say a restaurant supply company is considering expanding from its home base in the US to Mexico. Using this example, we will walk you through the three-step framework below.

Step 1: Assessment

Assessment is all about ensuring that diving into a new market is a smart move for your business. As part of the assessment step, you should determine why your company wants to enter a new market and why the target market is a good fit.

Take our example above. There could be many reasons why a restaurant supply company wants to expand. Maybe fewer folks are dining out in its home market, so the company wants to expand into a large market where diners still eat out at high rates. 

Or maybe the company is experiencing supply chain disruptions, so they want to expand somewhere nearby.

The company identifies Mexico as a potential target market. Mexico is attractive because it is a huge market and is geographically close to the US, making it easier to coordinate sales and deliveries.

But before diving in headfirst, wrap up the assessment phase by conducting a cost-benefit analysis. Move forward only if you determine that the benefits of entering the target market will likely outweigh the costs.

Expert advice: As part of your cost-benefit analysis, consider how long it will take you to establish a foothold in a new market. The new market needs to be profitable for your business within a reasonable amount of time, or else your expansion effort could sputter out.

Step 2: Feasibility

In the feasibility step of your global entry strategy framework, you will determine whether your company has what it takes to expand into the target market. 

Here is what to consider:

• Do you have the necessary capital for initial investments?
• Can your company effectively compete in this new market landscape?
• Does your company offer value-add services that differentiate you from the competition?
• Do you have sufficient inventory to meet demand in the target region?
• How will you handle ordering and fulfillment logistics in the target market?

In our restaurant supply company example, decision-makers would need to determine whether they could compete with existing restaurant suppliers in Mexico. They would also need to strategize on warehousing inventory in Mexico and ensuring timely deliveries to restaurants.

Step 3: Implementation

Implementation involves mapping out the when and how of your market entry. You have many choices, such as opening offices in the target country, partnering with local distributors, or acquiring a local company.

Let’s go back to our example. The restaurant supply company might find that joining an existing distribution network is the most cost-effective way to enter the Mexican market. This approach allows the company to use its sales expertise without needing to build a new logistics network from scratch. (We explain how to do this in the next section!)

With a solid plan in hand, you can break it into actionable tasks and assign them to individuals within your company.

Low-risk B2B market entry strategies

At DJUST, we have found two low-risk B2B strategies that work extremely well for entering new markets: digital expansion and indirect exporting.

Digital expansion through eCommerce

ECommerce enables you to create an online storefront to sell your products to other businesses. This makes it incredibly easy for your business to serve customers anywhere in the world. 

You can build online catalogs specific to each market you serve and accept payments through local payment providers. You can also simplify order fulfillment by leveraging your existing logistics network and using global delivery services.

We recommend this strategy as the lowest-risk and lowest-cost approach to entering foreign markets.

Pros

• Very low cost to entry with minimal upfront investment
• Simplifies the logistics of delivering products to foreign markets
• Higher profit margin compared to partnering with local companies
• Main focus is marketing, which many B2B companies have experience in
• Full control over selling your own products
• Enables you to sell products from third-party vendors

Cons

• Requires you to develop a logistics network for deliveries
• Marketing costs can be high
• Implementing a B2B eCommerce platform can take time
• Requires onboarding customers to your platform

Expert advice: DJUST is a powerful tool for B2B business growth. Our unified commerce platform enables you to build market-specific product catalogs with unique pricing, quote and workflow validation, payment methods, and more. With DJUST, you can be up and running in four months or less — eliminating one of the biggest hurdles companies face when using a digital expansion strategy.

Indirect exporting

Indirect exporting involves selling your products in a foreign market through an intermediary. There are a few ways indirect exporting can work:

• Indirect exporting through distributors. You sell your products directly to distributors who have existing customer networks to re-sell to. some text
  • Example: You could sell restaurant products to restaurant supply companies in your new market.
• Indirect exporting through trading companies. Trading companies help you export your products to your target country and might offer limited logistics support, such as warehousing. You will oversee selling your products to customers in the target country and managing order fulfillment. some text
  • Example: You can work with a trading company that offers storage for your restaurant products, but it will be up to you to make sales to customers.
• Piggybacking. You allow another company that already operates in your target market to sell your products. You will typically pay a fee and might have limited insights into your customer base. some text
  • Example: You could offer your products for sale through a restaurant supplier that handles advertising, transaction processing, and logistics.

Importantly, none of these indirect exporting methods require you to handle the export process yourself. That is a time-consuming and costly process we do not recommend any B2B company take on.

Pros

• Export process is handled for you
• Provides nearly immediate access to your target market
• Offers access to existing customer networks

Cons

• Lower profit margins compared to eCommerce
• Requires coordinating inventory with third parties
• You do not control important parts of your sales process

5 challenges to avoid while building a successful market entry strategy

We have seen many companies stumble when entering new markets. Let’s uncover the common pitfalls that trip businesses up — and, more importantly, how you can avoid them.

Unclear project plan

Many expansion plans fall apart because moving parts are not well-coordinated or critical tasks do not have clear owners. That is why we recommend using project management tools to map out your expansion plan and keep track of implementation. 

You should also keep your project plan as simple as possible. If you use a B2B eCommerce platform such as DJUST, you can simply connect new markets to an existing platform rather than develop an entirely new software system for each market you enter.

Insufficient financial resources

According to Gartner, ballooning costs are one of the main reasons why international expansion efforts fail. Your market entry budget should include not only marketing and distribution costs but also legal and regulatory costs, travel fees, and other expenses.

Unaligned organization and skills

While steering your team towards new horizons, it is crucial not to lose sight of your home market. (After all, it is the key revenue stream funding your expansion!) You must lead your team carefully and ensure they pay sufficient attention to your home market while executing your expansion plan.

One way to achieve this balance is to use software that connects to your legacy systems (like DJUST) and does not drain your existing resources. Our platform connects to legacy systems, eliminating the need to onboard customers to market-specific tools. This allows your team to use the same sales processes across your home market and new markets. Additionally, DJUST has a standardized front end, so it requires fewer developers than other solutions.

Product poorly adapted to new market

Introducing products to a new market comes with its own challenges, such as cultural nuances, differences in buying behaviors, and potential language barriers. These differences are easy to overlook, but they can doom products that generate significant revenue in your home market.

To combat this, consider entering a new market slowly, with a limited product range that is highly specific to your target customers. At DJUST, we make this possible by enabling you to create custom catalogs for different countries, regions, languages, and more. You can collect feedback from early customers and build up your company’s local reputation before expanding your catalog.

Ill-suited marketing campaigns and collaterals

Language and culture barriers can be huge hurdles when marketing your products abroad. Simply translating your existing marketing materials will not cut it, as the messaging that works in your home country might not resonate with customers in different types of B2B markets.

So, you must ensure your materials align with the local audience’s needs and expectations. A platform like DJUST can help with this. You can customize multilingual product descriptions to explain how your products meet the specific needs of customers in different markets.

The bottom line

Venturing into new markets can be a game-changer for your B2B business, opening doors to new audiences and helping to boost sales. But the journey is not without its challenges. Deciding when, where, and how to expand requires a new market entry strategy framework that covers assessment, feasibility, and implementation.

While there are multiple approaches to selling in new markets, we recommend using an eCommerce strategy because of its low risk and costs. Alternatively, you can take an indirect exporting approach, which involves selling your products through an intermediary in your target market.

Whichever strategy you choose, ensure you have a clear project plan and give enough attention to your home market.