Computer company loses hundreds of thousands of dollars

The third largest computer manufacturer in the U.S. was preparing to enter the Mexican market. To sell their products in Mexico, this company was required to obtain product safety certification. One of the requirements was that the company had to list a Mexican distributor in the documentation before receiving final certification.

After one year this company, projected to have gross revenues exceeding $800 million in 2006, still had not found a distributor to list for the certification. The company's efforts to expand into the extremely lucrative Mexico computer market was stopped cold by their inability to find one Mexican distributor.

Just imagine how much money was spent (wasted) during one full year while the Vice President of Sales for Latin America and his staff tried to locate one, single distributor in Mexico.

U.S. medical equipment manufacturer tarnishes reputation and loses hundreds of thousands of dollars

An Alabama manufacturer, deciding how they were going to enter international markets including Mexico, was approached by a team of international marketing experts who had key government contacts in the leading health institutions in Mexico. In 2001, the combined budget of these institutions for new equipment was over US$37 billion.

The owner decided to hire an old friend to handle the internaional marketing. A few months later, one of the experts called and chatted with this new marketing director. During the call, the marketing director commented, "This international stuff is really kicking me. I'm reading a dozen magazines a month trying to get a handle on what's going on."

The result was the company entered markets without researching if their product would require modification to meet local electrical standards and foreign customers found that they couldn't even turn on the equipment because of incompatibility issues.

The image and reputation of this company was tarnished and unless changes are made, it's unlikely this company, that was full of potential growth, will ever gain solid market shares in other countries because the owner decided to use local, domestic talent for his international business instead of experienced international marketers.

Recycled distributor list from U.S. Department of Commerce

One executive with a California computer products manufacturer explained that he had had several visits from local ITA, International Trade Association, members. ITA, one of several divisions of the Department of Commerce (DOC), offers assistance to prospective U.S. exporters. The executive said ITA had offered to sell him a list of distributor. The executive complained, "Sure. I can get a list from them [ITA], but it's the same, generic list that everyone in the industry is getting."

Most professionals want a list that is customized to their company's particular needs rather than a "one size fits all" generic list of companies. And the problems with lists from the Department of Commerce don't stop here.
(see next story)

Costly and useless listings from U.S. Department of Commerce

A few years ago, a client, the owner of a company supplying radiology products, told his story about ordering a list of Mexico medical companies through the DOC. Due to system limitations, the owner could not specify the particular subcategory he wanted, x-ray tubes for CT scanners. He had to simply put in a request for medical companies.

The results were horrendous. One company on the list sold light bulbs. Another sold lamps. A few sold everything from diapers and silverware to rope and sundry items. These companies list with the DOC in the hope that if they offer everything, they will capture business from unsuspecting companies looking for a supplier or distributor in Mexico.

One company was a dental office. The last listing was for a legitimate medical company; however, the company did not even handle radiology products or equipment much less x-ray tubes.

The entire investment was wasted as was the time to order the list and then to research each company.