World Wide Access was founded by Paul Grey with the sole purpose of reinventing exporting for products-focused Kiwi businesses, initially targeting the US. The achievements for its clients have been nothing short of impressive.
To see the Close Up story featuring several of the companies exporting with World Wide Access click here.
Whichever way you look at it, exporting is a daunting prospect – particularly for first-time exporters. It’s the proverbial minefield – eating up time and profits. But for many exporters there is an easier way.
Kiwi-owned company World Wide Access has invented a means to slash the cost and time to market compared with conventional methods, and owes its success to the software product development experience and talents of its founder Paul Grey.
I caught up with Grey at Export NZ’s recent Go Global event in Auckland, and asked how World Wide Access came about.
“My background is software development, and it’s software technology that makes the World Wide Access export model possible,” he says. “I was CTO of Peace Software which over the course of 20 years we took international, successfully breaking into the US market. I was based in America for much of that time and, believe me, there’s no substitute for that experience.
“We grew Peace Software to become New Zealand’s largest software product development company and achieved a successful exit to a Fortune 500 company in 2006.”
During his eight years in the US Grey had seen many Kiwi companies struggle to gain a toe-hold in the market – dealing with distribution issues in particular, but also all the other potential traps associated with trade into the US. He also noticed the Americans’ propensity to shop online and the incredible success of large Internet-related shopping and ‘drop-shipping’ sites like Amazon (the biggest with sales of US$48 billion), TheFind, Shopzilla, NexTag, Buy.com, Google Shopping and a host of others – familiar to US shoppers, but mostly unheard of in New Zealand.
Here was an opportunity for Kiwi exporters to tap into this vast market. But first they had to be educated on the unique online (e-commerce) marketing model that exists in the US – a very different kettle of fish to New Zealand’s, and one that requires a complete change of mindset.
It was a mindset Grey was finely tuned into.
He set about creating the software technology that would open doors for exporters here – partnering only with key premium-product focused online shopping sites. His objective was simple, he says. “Slash the cost and time to market compared with conventional export market entry, and build a better way for New Zealand products to reach customers in big retail markets overseas, starting with the US – the biggest of them all.”
World Wide Access created a system that combines exporting, logistics, e-commerce, and web-based software engineering and automated operations in a way that wouldn’t have been possible just a few years ago.
“We make it faster, easier and cheaper for products to succeed in export markets,” he says. And he has a string of success stories to prove it, starting with Merino Kids.
“Having spent a year building the software systems, logistics and selling capabilities to enable the World Wide Access exporting concept, it was a gratifying milestone in 2008 to make the first sale of a New Zealand product in the US, a Merino Kids baby garment to a customer in New Jersey,” recalls Grey. “We haven’t looked back since. In the three years since introducing the Merino Kids baby sleep bag in America it has grown from being an unknown brand to the number one-rated product in its category.”
A better export model
Grey is quite clear on why his export model has been so successful in the US, and why he is now also targeting the awakening online shopping giant in China – but more on that later.
“Simply, it’s a better way to export, and there are three major reasons why. First, it’s faster to market and costs less. New Zealand companies can be selling their products in-market within weeks, without needing to establish a costly direct presence or giving control to a distributor. Suppliers decide how much stock to send and we take care of the rest – from shipping, customs clearance, duties and taxes, to managing payment processing, order fulfilment, customer service, returns and refunds.
“Secondly, we’re world-class at e-commerce. Our model works because we make it easy for shoppers to find products online, and easy for them to buy. We generate export revenue that can only be realised by being in-market and selling at a world-class standard. Selling over the Internet from New Zealand will never get you there,” he says.
Customer expectations of online retail are far higher in the US, Grey adds. “The American online shopper might be using a PC, iPad or smartphone. They are sophisticated and demanding, and expect discounts, free shipping, guaranteed delivery times, constant communication, online order tracking, even the option to have a product gift-wrapped and at their door the next day.
“Thirdly, Kiwi exporters can’t match our technology. Our OrderPipe mobile sales dashboard is an example of the advanced level of software technology that underpins the World Wide Access export capability. It was developed by our software engineering team to monitor our own sales in markets overseas. OrderPipe is now being used by e-commerce merchants worldwide to monitor their sales in real time.”
Proof of just how robust this export model is came not long after the Merino Kids US launch – when the global financial crisis struck.
“It became apparent that our first year would involve selling to customers in the midst of a deep recession; a tough time to be getting an international business off the ground,” says Grey. “But we’ve achieved strong growth against that backdrop and now that economies are recovering, World Wide Access is very well-positioned.”
He says around 18 months ago they decided to take on more suppliers, and there’s been no shortage of takers. They currently represent around 15 exporters in-market. “It is a compelling opportunity for people and we’re always on the lookout for new products, referrals and recommendations,” he says.
“And, of course, a whole lot of things suddenly become possible once you find a way to get products into market.”
Service steps
Grey explains the services he provides his clients. First up there’s a feasibility checklist. Is the product market ready? Is it packaged properly to survive a distribution chain? Does it have proper barcode labels and is it compliant with all relevant regulations in the destination market?
Next comes a pricing and cost competitiveness check. And is there the ability to scale, given the opportunity?
“We have the ability to start small for our clients – they don’t have to risk a container volume, but there has to be that ability to scale up,” says Grey.
Once the contract is signed, clients place some starting stock with World Wide Access – either a whole range or a subset, depending on market needs. “Citta Design homeware, for example, has just come on board. The Citta Design range we’re taking into America is all products they’ve designed, that are unique to them.
“Basically World Wide Access funds the whole process,” says Grey, right from the point of receiving the goods in New Zealand. “So shipping, customs clearance, warehousing, translation, marketing, selling, automated order fulfilment, banking, and of course online listing – everything is covered, and the client gets paid by us, a New Zealand company.”
Suppliers can also track sales and inventory online and receive monthly payments directly into their New Zealand bank accounts.
Is there any risk for the exporter?
“Only a very small one,” says Grey. “Only if we couldn’t sell their stock for a low price that recovers their manufacturing cost. But, to be honest World Wide Access takes on more risk than the supplier.”
World Wide Access makes income in the long term through a margin on sales. “Our goal is to achieve volume in years three, four and five – so we’re motivated to sell volume. It’s a long term relationship – sell volume and everyone wins.”
As for creating that “high quality online representation of products” for their clients, Grey reminds me of the mindset shift necessary to understand the US online market. “In New Zealand you basically have two choices for selling online – create your own website or list with TradeMe. The US was like that 10 years ago but e-commerce there has moved on. This difference in frame of reference is why it’s hard for New Zealand companies to succeed online overseas without someone like World Wide Access.
The website itself represents only 20 percent of the puzzle, he says. There is another 80 percent relating to automation of the entire selling process.
“There’ve got to be real-time inventory levels – so you never sell a product you don’t have. Do that in the States and you’re dead in the water.
“Live stock levels, three or four delivery options, local return addresses, local service numbers – there are a whole raft of services required for people to even consider buying, not least of which, is the product available from their favourite US online shopping site? We provide all this.”
Grey is adamant about the need for New Zealand suppliers to have their brand and products on the big e-commerce sites, not some obscure little site based in New Zealand.
“Put your product with us and it’s like putting your product with every shopping mall in the country, all at once. It will be seen and will have a fair chance of being successful in America.”
Budgets and marketing
When all set to go with World Wide Access, the exporter must allocate a budget to launch their brand in the market.
“What we do is identify things that get results that can be done on a ‘Kiwi’ budget,” says Grey, adding that if you’re serious about investing in the world’s biggest market, you can get away with investing something in the vicinity of NZ$2,000 a month to start building your brand overseas – a trivial amount compared to costs involved in other more traditional entries.
He says World Wide Access can help on aspects such as PR-style ‘article marketing’ (“a good way to tell the brand story”).
“There needs to be some basic product promotion done so the brand has a chance of succeeding. We’ve proven with our Kiwi brands so far that with this level of marketing budget, we can get the wheel to start turning. Then our ability to make the product easy to find and easy to buy oils that wheel, keeps it turning. And any further promotion accelerates things even further. Before you know it we’re into that 60-day order fulfilment cycle, and our clients are getting their monthly payments.”
Is it really that painless for exporters?
“We can’t solve everything and we can’t make it free, but I reckon we eliminate 90 percent of the cost of market entry,” says Grey.
“I tell people that the best form of market research is to get product in market, and see what sells. You can spend $100,000 with a market research firm, but they are not going to tell you which colours, which sizes, and which products are going to sell. Six months with us and you’ll know exactly what the market wants. In 18 months we can even give you a seasonal profile.”
Accessing China today
Having proven itself in the US market and with sales doubling year on year, World Wide Access now has its sights set on China. Its systems are already up and running and the first sales channel is with Amazon China.
“This came about through our strong and successful relationship with Amazon in Seattle,” says Grey. “Amazon has only recently entered the Chinese market with Amazon.cn and we were the first international company to have sold a product through Amazon.cn to a customer in China.”
Being able to sell on Amazon China is a world-first achievement, he says, and represents a significant opportunity for New Zealand products to get in front of millions of shoppers.
“Building a path to market that takes products right to the doorstep of consumers in China is a strategic investment for us. Like many, we see the enormous potential in China’s growth, and we’re doing something about it, today.”
The timing couldn’t be better with the New Zealand-China FTA in place, and China is already one of the world’s largest e-commerce markets. According to a recent report by the Boston Consulting Group it could exceed even the US in size by 2015.
Grey says their offering is not about serving the mass market in China. “The question is; How many people are there that want niche premium products? Is the niche big enough?
Merino Kids is already being represented in China by World Wide Access, along with the ingenious Nooski mouse trap.
Question is – who wants to be next
to fast-track their products into China?
Paul Grey would like to hear from you.
For more information go to: www.orderpipe.com or www.world-wide-access.com/better-way-to-export/.
