Report on CanChamís Focus on Export
15.02.2019


CanChamís Focus on Export took place on Monday, January 28th, 2019 at 9 Aristida Briana, 4th floor as a ďby invitation onlyĒ meeting of a select number of participants chaired by the Trade Facilitation and Export Group Leader, Richard Hunter, in an exclusive meeting of the Trade Facilitation and Export Group. The guest list included only those currently involved in offering their products and/or services abroad. 13 people representing 11 companies involved in export attended the meeting of the 20 invited,  along with 1 support service provider.

The CanCham is looking for the most effective way to promote international business and needed the input of the members who are experienced in trade in order to determine what works and what doesnít.

One dilemma for exporters appears to be in the fact that most ďtraditionalĒ approaches to developing trade relations seem to have limited or no success. These include missions to international trade shows, expecting free services from consultants with the hope of future benefits, and relying on commissions to achieve sales. 

The problem is that companies are involved in market development or market entry in unfamiliar territories, and not only sales, and that those with contacts and experience (IP or intellectual property) are not willing to part with their IP free of charge. They want to be paid for their time at least. The commission approach means that the financial risk and burden of developing a new market falls on the shoulders of the agent or facilitator without commitment from the supplier who controls both price and delivery terms, and this has been found to be a non-starter. In any event, small and medium business are not benefiting from the potential of expanding markets using traditional approaches.

The CanCham has adjusted its approach based on the successful experiences of some of its members. This has become the basis of CanChamís 2019 strategy (http://cancham.lv/about-cancham/strategy-2019) and itís initiation of the DMC (Destination Management Coordinator) concept. A DMC policy and procedure is under development, but the concept was reviewed in this meeting with specific reference to Canada, though the concept applies internationally.

Features of the DMC concept include:

  • the development of strategic partnerships (eg. agent or supplier in Canada, agent or supplier in Latvia)
  • preference for two way trade (ie. the Canadian company helps the Latvian company sell its products/services in Canada and the US, the Latvian company helps the Canadian company sell its products/services in Latvia and the Baltics, the EU, and Central Asia, Ukraine, Belarus and Russia)
  • the DMC helps a client find the appropriate strategic partner for the client in his region of interest. Note, the client can be in Canada or in Latvia, or elsewhere
  • the DMC is paid for its services on an hourly, pay as you go basis after paying a retainer of Ä1,000. This minimizes risk to the client, but demonstrates commitment to the DMC.
 

The DMC concept was agreed in principle by those present. The CanCham Board is to issue a policy & procedure for approval and implementation.

The issue of margins, or commissions for agents was also raised. Concern was raised that, for Latvian products, sometime the price of their  products or services was so low that the commission offered was not interesting to the agent. Special attention must be given to the margins available for distributors and agents.

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