Distributing goods and services overseas can be done in various ways. You might transport parcels via planes, establish your own online store or physical shop abroad, ship electronically, or distribute through an agent or distributor.
When considering exporting, we typically focus on transporting goods via planes or ships. While this is a crucial aspect, it’s important to understand what happens after your products leave your manufacturing facility. How do they reach your customers from the airport or seaport? And what about businesses that provide services rather than physical goods?
This page addresses the essential processes of shipping and distributing, which are integral parts of exporting. It’s essential to remember that as soon as you sell to someone overseas, whether goods or services, you are engaging in exporting.
Shipping your goods
You have the option to ship physical goods yourself. This involves organising aspects such as transportation, insurance, duties, packing lists, invoices, and airway bills. It’s crucial to track your goods and understand the responsibilities at each stage of the shipping process.
Information, guidance and documentation for export — New Zealand Customs Service
How to choose your international partners— New Zealand Trade and Enterprise
Custom brokers
Alternatively, you can utilise a customs broker. Customs brokers act on your behalf, assisting with tasks such as clearing goods through customs. They often specialise in specific regions, so you may require a broker in New Zealand and another in your destination country.
Customs brokers and freight forwarders— Customs Brokers and Freight Forwarders Federation of New Zealand
Choose environmentally friendly shipping options if possible
Shipping and transportation frequently incur environmental costs. It’s beneficial to mitigate these impacts by proactively planning ahead.
Benefits of sustainability for your business and supply chains — Sustainable Business Network
Shipping your services
Services are typically delivered electronically. For instance, you might provide software to international clients or send consulting reports and designs via email to clients on the other side of the world. Online lessons through video conferencing are also common examples.
However, there are services that may require physical goods to be shipped. For example, repairing a damaged violin for someone abroad would involve shipping the instrument.
E-commerce: online selling of products overseas — Ministry for Primary Industries
Distributing your goods or services
Distribution involves more than just shipping and tracking. It includes:
- Choosing your sales channels
- Deciding whether to use an agent or distributor
- Recalling your goods if necessary
Recalling goods is typically necessary if there’s a problem, such as a food poisoning risk or a hazardous defect.
Product recalls explained — Product Safety
Effective distribution directly impacts sales and profits. The most suitable distribution method depends on factors such as:
- The nature of your goods or services — selling luxury items differs from selling everyday products.
- Customer behaviour — where and how your customers prefer to shop.
- Market size — the size of your customer base and its proportion of the population.
- Logistics — storage capacity, locations, and available shipping options.
You can distribute your goods or services independently or enlist the help of an agent.
Use insights to sell the right thing in the best place
Choose from different sales channels
You have the option to sell through various channels, including:
- Websites, social media, or online ad placement
- Retail outlets
- Catalogues and advertisements
- Word of mouth
- Trade shows
- Chance meetings
Think about distribution options
When starting out, working with an agent or distributor can be straightforward:
- An agent is someone you hire or contract to act on your behalf. You retain more control and have direct knowledge of your customers.
- A distributor purchases your products and resells them. Working with a distributor typically involves less control compared to working with an agent.
For further details on managing orders, deliveries, and outsourcing, explore additional resources.
Establishing an overseas office can enhance efficiency and provide greater control for businesses with exporting experience. However, it comes with significant costs and entails financial and legal compliance obligations. Setting up abroad may also require adopting a different business structure. It’s generally advisable to defer establishing an overseas presence until you’ve gained sufficient experience, but it’s beneficial to start planning for it early on.
Consider other distribution options
Exporters commonly choose to distribute through agents and distributors, but there may be another option that better suits your needs.
Which sales channel is right for your export business? — New Zealand Trade and Enterprise
Contract Manufacturing: You can have someone manufacture your goods or parts of them, and then sell the finished products. This arrangement can save costs and may offer tax incentives from countries supporting local economic activity.
Franchising: Franchising involves allowing someone to sell your goods or services under your brand. You maintain control over aspects like signage, branding, and training. The franchisee pays for using your systems and intellectual property, enabling business expansion with minimal upfront costs. However, it requires well-developed systems, a proven track record, and ongoing support to ensure franchisee success.
Joint Venture: Working with a local company in your target market through a joint venture involves sharing finances, resources, governance, ownership, and profits. It can help overcome export barriers, but finding mutually beneficial terms can be challenging.
Licensing and Royalties: Licensing allows others to use your intellectual property (patents, trademarks, etc.) to make and sell goods or services. While it can quickly expand your business, you don’t receive profits from sales. Royalties, on the other hand, involve receiving a fee for each sale made using your intellectual property. Both approaches require legal and strategic advice to protect your intellectual property rights.
In all these strategies, seeking guidance from specialist lawyers or consultants is crucial to navigate legal complexities and ensure your intellectual property is safeguarded.
Copyright, trade marks and geographical indications — New Zealand Customs Service
Strategic alliances: Strategic alliances are akin to joint ventures but are less formal and typically shorter in duration. They often concentrate on specific segments of the market.
Tip: Whichever distribution option you choose, consider the arrangements carefully.
For instance, considerations such as intellectual property ownership and payment terms for agents or distributors should be carefully addressed. It’s crucial to seek legal advice before entering into any agreements.
Distribution agreement template — New Zealand Trade and Enterprise
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