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Licence to sell: This is the secret to scaling globally in a matter of just three years

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Three years, minimal staff one flagship product – that’s what it takes to have a global business in my experience. London is a long way from the local markets of Daylesford, Victoria, but it marked the beginning of my company TurmeriX’s global expansion. Here’s how I did it…

A little over three years ago I started with one product, direct selling to the public. Part of the reason for starting out small was to test the market and garner as much feedback as possible. I had created the product for myself and knew from my own experience that it worked. The personal story behind TurmeriX helped people understand it and make their first purchase and soon enough I started seeing repeat customers and then business interest.

A question of scale

From the outset I believed that this was a product that could scale quickly if taken to the market in the correct way. I have decades of direct selling experience but there are only so many markets one man can sell at, so my expansion plan was to remain a wholesale distributor and find other people to manage sales and marketing.

When you’re small, sales avenues are a little restricted so I started by building a great network in the direct-to-market space with the help of others. As we established a toehold I looked to other avenues for distribution. Retail was the natural extension from direct selling and was pretty much the only way to make the purchasing process more accessible to serve our growing market. I settled on retail licensing.

The key is to set minimum order quantities (MOQs) for licensees so we could manage inventory and cash flow as distributors. MOQs are realistic targets that both parties agree to: you as the distributor to supply and they as the licensee to sell.

I used a sales formula based on my own sales results in ratio with the population in a geographical area to arrive at the zone size and an expected sales target. This meant that it didn’t matter whether the licensee was selling into a remote town the size of Katherine or a city as big as London – the targets were proportional.

The MOQs for the sales area of Victoria, for example, is no less than 25,000 units of 360g TurmeriX powder in the first year to keep the licence. We then negotiate the targets annually with the licensee. Each licensee manages their own discrete business.

Support retail with education

I believe the educational sales experience has made a real difference, so it was important to carry this over into the retail licences.

We sell into the Go Vita national health food chain – first with our flagship product and now they take four lines with demand growing – and it’s crucial to have our people in store on a regular basis to conduct educational sales. When we can inform the public of the difference in quality between our product and other brands, it pays dividends. We are also currently running a trial in Priceline’s largest store on Bourke Street in Melbourne, where education and training is a specific part of the promotion and includes a ‘Daigou’ event, which is specifically targeted at the Chinese consumer market.

Knowing this, I offer licensees training to help them move product. I’ve developed a series of training videos based on my experience so that licensees can access them if they want extra help, and I’m always available to lend advice on sales education. Each of the licensees also runs their own internal training and set goals for their resellers; I trust they know what works best for their zone.

Going global

I realised early on that TurmeriX had worldwide potential so we first launched the product overseas at the London Home Show, again starting with that direct selling interaction and building word-of-mouth sales with a repeat customer base. That opened up opportunities across the United Kingdom and Ireland and other parts of Europe including France, Germany and Sweden. We also have distribution in North America ­– Canada and the USA.

Working at a global level means we now need to ensure production meets worldwide distribution targets, which is a good problem to have. It also gives us economies of scale. We have purchasing power when we buy the ingredients and have a dedicated factory to package the products.

Stay lean

Finally, one of the reasons we’ve been able to expand quickly without having to borrow capital is that we’ve stayed lean. I work with a small, tight knit group of people, which includes my amazing executive assistant and right-hand woman named Cindy. Our licensees, runs their own business. Some licensees sell TurmeriX as their sole business, others sell our products alongside their other businesses. We have also partnered with some of the best when it comes to wider distribution, marketing and promotion, which is essential for scale.

For a product-based business, a retail licensing model is an ideal way to scale quickly. If you can set up the licences in the right zones with the right people and negotiate achievable and sustainable MOQs, global sales are really there for the taking.

Errol McClelland is founder of TurmeriX

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