Arctic Steel - Case Study
From the Asialink Business Singapore Country Starter Pack
Arctic Steel Director Peter Crossley knows the importance of arming his Singaporean distributor with an arsenal of product-related facts and figures, the reality of selling a premium product in a pricesensitive market.
“We do find that most times there’s a very strong emphasis on price above everything else, it always seems to be the first question, the ultimate question, the hinging factor,” says Crossley.
The Noosa-based company manufactures cast stainless-steel water strainers for boats. Made at a foundry in China and sold worldwide, they can be found filtering water in Suez Canal work boats, crew transfer vessels operating in the Caspian Sea, and US passenger ferries.
“Our product’s competitively priced so we don’t have big margins and in Singapore and Asia generally we always go in rock bottom straight from the beginning,” says Crossley. “Sometimes that’s a good tactic, sometimes not, because you’ve got nowhere to move, but if I don’t they’ll say ‘no, too expensive’.”
Differentiating his product from its cheaper competitors through fact sheets and comparison tables is vital. “We tell them, ‘we are not the cheapest product but we are the best and these are the things that make us the best’, and they have to choose. We lose sales because of the price sometimes and there’s nothing you can do about that. Those that do buy them see the quality and they come back then.”
Crossley found his Singaporean distributor, who also sells to Malaysia, Thailand, Vietnam and Indonesia, at a marine industry trade show in the city-state and recommends that Australian businesses searching for an agent or distributor do the same. “It’s very hard to find a distributor in Singapore just by picking up a phone or emailing, you need to meet them,” says Crossley.
“We prefer to use distributors as our extended sales team. As a manufacturer and wholesaler we can’t possibly meet every customer, particularly if we want the international market. We run a very lean business in Australia, there’s only three staff here to manage the office and warehouse and then we use the distribution network rather than employing sales teams to travel overseas.”
Crossley says choosing his distributor was not purely a logistical decision. “It’s important that you can trust people and relate to them, it’s all about relationships, which are so important to doing business in Asia.
“It’s very important to build the relationship and we’ve learnt the value of that, for them to see you, to trust you, to have a laugh, have a drink with you and a meal. You can’t just fly in and ‘chop, chop, chop’ do business and walk away. You don’t get their respect.”
Once a business relationship is established, it is vital to support the distributor by keeping in touch, and visiting when possible. “I’ll say ‘how about I come over and let’s go meet some customers’, it’s a good way to train them in your product.
“You’ve just got to be patient and support them as much as you can, offer any assistance, make yourself available. I offer to chat with their staff on Skype, I’ll take them through the features of the product, whatever it takes to get them familiar with the product and help them sell it for us, because they don’t know the product as well as we do.”
Looking to expand your knowledge further? Explore other market-leading research & resources by Asialink Business.
www.arcticsteel.com.au