Think about how to ship and distribute

Shipping your goods and distributing them overseas can happen in many ways. You might put parcels on planes or set up your own shop overseas. Or you might ship electronically or distribute through an agent or distributor.

When we think of exporting, we often think of putting a crate on a plane or a container on a ship. That’s certainly part of exporting, but what exactly happens after your goods leave your factory? And how do your goods get to your customers from the airport port or port? What if you sell services, not physical goods?

This page discusses shipping and distributing, both vital parts of exporting. It also reminds you that as soon as you sell to someone overseas, you’re exporting. That includes providing services to someone overseas.

What exporting is and isn’t

Shipping your goods

You could ship physical goods yourself. You’ll need to organise things like transport, insurance, duties, packing lists, invoices and airway bills. Make sure you track your goods and know who’s responsible for them at different stages.

Information, guidance and documentation for export(external link) — New Zealand Customs Service

Incoterms: who’s responsible for your goods during export?(external link) — New Zealand Trade and Enterprise

You could also use a customs broker. Custom brokers work with customs on your behalf, like clearing goods through customs for you. They may work in specific areas, so you may need a broker in New Zealand and another one in your destination country.

Customs brokers and freight forwarders(external link) — Customs Brokers and Freight Forwarders Federation of New Zealand

Choose environmentally friendly shipping options if possible

Shipping and transport often have environmental costs. Look for ways to reduce those costs by planning ahead.

Explore our Climate Action Toolbox(external link)

Shipping your services

Services are usually shipped electronically. For example, you might provide software to international clients. You might email consulting reports or designs to the other side of the world. Or you might offer online lessons via video conferencing.

But you could also offer a service that requires goods to be shipped. For example, you could repair a damaged violin for someone abroad.

E-commerce: online selling of products overseas(external link) — Ministry for Primary Industries

Distributing your goods or services

Distribution is getting your goods or services to customers. As well as shipping and tracking, it includes:

  • choosing your sales channels
  • whether you use an agent, a distributor, or neither 
  • recalling your goods (if necessary).

Recall is usually only needed if goods pose a problem, like a food poisoning risk or a defect that can be hazardous.

Product recalls explained(external link) — Product Safety

Good distribution means better sales and profits. The best method of distribution depends on things like: 

  • your goods or services — how you sell luxury goods or services will be different to how you sell everyday ones
  • your customers — where and how your customers shop 
  • market size — how many customers you’re likely to have and whether they’re a big proportion of the population
  • logistics — how much of your goods you store, where you store them and what shipping options you have.

You could distribute your goods or services yourself, or use an agent.

Use insights to sell the right thing in the best place

Choose from different sales channels

You could sell through different channels, including some or all of these: 

  • website, social media or infomercials
  • retail outlets 
  • catalogues and ads
  • word of mouth
  • trade shows
  • chance meetings.

Think about distribution options

When you start, working with an agent or a distributor may be easiest: 

  • An agent is someone you employ or contract to work for you. You’ll have more control and know who your customers are.
  • A distributor buys your products and sells them on. You’ll have less control than when you work with an agent.

Some businesses set up an overseas office once they have exporting experience. An overseas office is more efficient and gives you more control. But setting up in another country can be expensive, and creates financial and legal compliance obligations. You may even need a different business structure. An overseas set-up is best left until you’re experienced, but it’s good to think about early.

Business structure overview

 

Consider other distribution options

Exporters often distribute through agents and distributors, but another option may suit you better.

Which distribution channel is right for your business? — New Zealand Trade and Enterprise

Contract manufacturing 

You could get someone to make your goods, or parts of them, and you sell the finished goods. The arrangement could save you significant cost. It could also offer tax incentives, as many countries give tax breaks to overseas businesses that support the local economy.

Franchising

You could get someone to sell your goods or services as if they were you. You’d have a lot of control because you specify signage, branding, packaging, training and so on. Your franchisee (the person selling on your behalf) pays you for the right to use your systems, processes and intellectual property. 

Franchising lets you expand your business at little cost because the franchisee pays most of the costs. But you’ll need well-developed systems and a proven track record. You’ll also need to give ongoing support and training to your franchisees if you want them to do well. This commitment is often greater than people realise.

Joint venture

You could work with another company in your target market in a joint venture arrangement. You’d share finances and other resources, governance, ownership, profits, and so on. 

This type of arrangement can be a good way of overcoming export barriers. An arrangement that benefits both parties equally is very hard to set up though.

Licensing and royalties

You could license your patents, trademarks, copyrights, designs and other intellectual property to others. This means you give someone the right to make and sell your goods or services. Licensing can be a fast way to grow your business, but you don’t get profits on the sales. If sales are good, you could miss out on a lot of money.

Or you could pay someone a royalty (a fee) when they sell your goods or services. This could be another way to grow quickly. 

In both cases, you need good advice from specialist lawyers or consultants, including about protecting your intellectual property.

Copyright and trade marks(external link) — New Zealand Customs Service

Strategic alliances

Strategic alliances are similar to joint ventures, but are less formal and don’t last as long. They often focus on a small part of the market.

Whichever distribution option you choose, consider the arrangements carefully.

Whichever distribution option you choose, consider the arrangements carefully.

For example, who owns intellectual property? How will you pay your agent or distributor? Get legal advice before you sign any agreement.

Distribution agreement template(external link) — New Zealand Trade and Enterprise

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