A new market can look promising from a distance. The language may be familiar. The business culture may seem similar. There may even be a free trade agreement in place.
But those first impressions can hide some of the biggest risks.
In a recent FITTskills Live session, Laura Pixley, CITP, drew on more than a decade of experience helping companies assess and enter new markets to explain where exporters most often make assumptions, what they should investigate first, and how to determine whether an opportunity is truly viable.
Her central message was simple: market entry starts with disciplined investigation, not enthusiasm.
Start by proving there is a real market
Before exporters spend time on distributors, trade shows, pricing or compliance, they need to answer the most basic question: does anyone actually want the product?
As Pixley put it:
“This is something that people actually want and are willing to pay for.”
That means looking beyond broad indicators such as population size or economic growth. Exporters need to understand actual demand, local consumption habits, competition and whether their product fills a meaningful gap.
A product that performs well at home will not automatically succeed elsewhere.
Consumer preferences, lifestyles, trends and purchasing behaviour can all change from one market to another.
Exporters should ask:
- Is there an established need for the product?
- Who already serves that need?
- Is there room for another entrant?
- What makes the product meaningfully different?
- Will buyers pay enough to make the opportunity commercially worthwhile?
The goal is not simply to identify an attractive country. It is to determine whether there is a realistic place for your specific product in that market.
Do not assume one country equals one market
One of the most useful points from the session was Pixley’s reminder that national borders do not always define a single commercial market.
Europe is an obvious example. Companies often speak about “entering Europe” as though it were one market, even though consumer behaviour, language, regulations and distribution models can vary significantly from one country to another.
Canada can present the same challenge. In beverage alcohol, for example, purchasing and importation are handled provincially, meaning an exporter may effectively need to treat Canada as multiple separate markets.
The same applies to the United States, where regional income levels, buyer expectations, consumer preferences and distribution systems may vary significantly.
The practical lesson is to define the market at the level where buying decisions actually happen.
Instead of asking, “Should we enter Canada?” or “Should we enter Europe?” exporters need to ask:
Which province? Which region? Which customer segment? Which sales channel?
That added level of specificity can change the entire market entry strategy.
Investigate compliance before building your commercial plan
Regulatory requirements are not something to address after a buyer shows interest. They can determine whether the opportunity is viable in the first place.
Pixley advised exporters to investigate labelling, certifications, product standards, traceability requirements and other compliance obligations early in the process. In some cases, a product may need reformulation or new packaging before it can be sold. In others, a required certification or registration may effectively determine market access.
She shared the example of traditional Scottish haggis. Because certain traditional ingredients did not meet Canadian requirements for human consumption, an exporter reformulated the product specifically for Canada.
The brand could still sell haggis, but the product itself had to change.
That’s an important distinction. Market adaptation does not always mean changing the marketing. Sometimes it means changing the product.
A free trade agreement does not automatically mean lower tariffs
Trade agreements can make a market more attractive, but only if the product qualifies for the benefits.
Pixley emphasized the importance of rules of origin.
A company cannot assume that a product will receive preferential tariff treatment simply because the exporting and importing countries have a trade agreement.
The product must meet the specific origin requirements.
“Understanding where your inputs come from and having documentation to support that preferential tariff treatment is very important,” she explained.
The commercial impact can be substantial. If a competitor qualifies for a lower tariff and you don’t, your landed price could be significantly higher. Pixley noted that the difference could be 15, 25 or even 30% in some cases.
That makes trade agreement eligibility a strategic pricing issue, not just a customs issue.
Pixley recommended involving customs brokers and other trade specialists earlier than many companies do. In some cases, exporters may also be able to seek advance rulings on classification or origin before committing to the market.
The earlier these questions are answered, the more accurately a company can assess the opportunity.
Price the full landed cost, not just the product
An interested buyer does not automatically equal a profitable export sale.
Exporters need to understand every cost required to get the product where it needs to go. That can include freight, insurance, brokerage, duties, port fees, warehousing, inland transportation, product adaptation, packaging changes, local marketing and after-sales support.
This is where Incoterms become especially important.
Pixley explained that the responsibilities built into the chosen Incoterm can materially affect both pricing and profitability. If the buyer collects the product from the exporter’s warehouse, the cost structure may be relatively straightforward. If the exporter is responsible for delivering the goods to a port or directly to the buyer, the calculation becomes much more complex.
Her warning was clear:
“Looking at just the product price alone is not a good enough strategy when you’re thinking about your own profitability.”
Companies need to know not only what the buyer will pay, but what remains after every export-related expense has been accounted for. Product reformulation, packaging changes and local promotion also belong in that calculation.
Treat the local partner decision as a strategic decision
For many exporters, the partner they choose in-market can have as much influence on success as the product itself.
Pixley called the local partner “quite often the most important decision that you’ll make when looking at exporting to a new market.”
That makes due diligence essential.
Exporters should investigate a potential partner’s history, customer base, sales channels, existing brands, geographic reach and sales capabilities. They should also understand exactly what that partner will expect from them in return.
A distributor that promises rapid growth may sound appealing, but exporters need evidence that the partner can actually deliver.
The structure of the channel may also need to change from market to market.
Pixley used non-alcoholic beer, wine and spirits in Canada as an example. Due to the country’s regulations when the category first emerged many products could not be sold through the same liquor channels exporters were accustomed to using elsewhere. Some suppliers had to work with grocery and packaged-food distributors instead.
In some cases, an exporter may even need more than one partner for the same market.
The key is to understand how the product is actually bought and sold locally rather than trying to replicate the distribution model used at home.
Familiar markets deserve more investigation, not less
One of the easiest mistakes to make is assuming that a culturally familiar market will also be commercially familiar.
Canada, the United States and the United Kingdom, for example, share language and some cultural similarities, but they differ in regulation, labelling, channels, buyer expectations and consumer behaviour.
Pixley advised companies to investigate the differences precisely because the market feels familiar.
That includes asking:
How do consumers shop? What attributes matter to them? How much are they willing to pay? Where are products sold? What regulations apply? Does the packaging or message need to change?
Culture also affects the way business relationships are built.
In some markets, Pixley noted, companies may need to invest significant time in a relationship before a buyer is ready to do business. In others, purchasing may be much more transactional and driven primarily by price or a specific short-term opportunity.
That affects not only how exporters market their products, but also how they approach buyers, structure partnerships and set expectations for how quickly a market can develop.
Assess your own readiness before asking whether the market is ready
Perhaps the most important question is one companies sometimes ask too late: are we actually ready to export?
Pixley said exporters need to be honest about whether they have the financial resources, people, capacity and time required to support a new market.
“Do I have the capacity to fill large orders? Do I have the capacity to manage exporting?” she asked.
Fast-growing companies can be particularly vulnerable here.
Winning an international customer creates additional work in compliance, logistics, partner management, sales support and customer service.
If those responsibilities are added to an already stretched team, a promising opportunity can quickly become difficult to manage.
Domestic experience can matter as well. Pixley noted that international buyers may look for evidence that a company has already built a successful track record at home before they are willing to work with it.
Export readiness therefore needs to be assessed from both sides of the equation: is there a viable opportunity in the market, and does the company have the capability to pursue it properly?
Market entry is an investigation before it is an expansion
The strongest takeaway from the session wasn’t that exporters should be cautious for caution’s sake. It was that better investigation creates better decisions.
A promising market still has to survive scrutiny around demand, regulation, pricing, tariffs, distribution, partners, culture and internal capacity. Each of those areas can either strengthen the business case or reveal a reason to rethink the approach.
That does not necessarily mean abandoning the opportunity. It might mean choosing a different region, changing the product, working through a different channel, bringing in specialist advice earlier or delaying entry until the company is better prepared.
For exporters exploring diversification, that discipline matters.
The question is not simply, “Can we sell there?” It’s “Do we understand this market well enough to know how to succeed there?”
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