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Exporting is the Fastest-Growing Segment for Lancaster Distributing

By Taylor, Maureen
Publication: South Carolina Business
Date: Sunday, April 1 2007
By focusing its international efforts, Lancaster Distributing Company has seen its export sales grow at a rate of 50 percent per year since 2003, and the trend continues.
Headquartered in Spartanburg, the company has distributed paint and wallpaper products since 1953 and currently represents more than 220 manufacturers. The company, which is a part of The Merit Group, has distribution centers in South Carolina, Florida, Kentucky, Pennsylvania, and Texas and covers 35 states domestically.
When International Sales Manager John Shrum joined Lancaster Distributing in 2004, the company was selling sporadically into about six countries. Lancaster Distributing is now in 20 countries, and that number continues to grow.
Shrum said there is no magic formula for success. A company must use a variety of resources. For Lancaster Distributing, those resources include state and federal agencies, such as the South Carolina and United States Departments of Commerce, as well as non-profit organizations, such as The Export Consortium. The Consortium, headquartered in Columbia, is working with Spartanburg County Economic Development Corp. to help existing industry expand. The two organizations are partnering through Duke Energy's AdvanceSC program to increase economic activity in the region.
While attending a U.S. Department of Commerce seminar on how to export, Shrum was referred to The Export Consortium. Shrum was interested in exploring markets in Mexico, Central America, South America, and the Caribbean. Working with Lancaster Distributing under a Small Business Administration Grant, Consortium staff recommended focusing research on Mexico, because of its proximity to the United States, as well as Chile and Costa Rica.
"The Export Consortium's research validated our perception that there was a significant market in the areas we were targeting," Shrum said. "The report all but shouted that we needed to focus efforts in Mexico for logistical reasons, market size, and a dozen other reasons." Prior to the market research, the company's exports were not focused on a specific area. While the majority of its export sales this year have been to the Caribbean, the Lancaster Distributing is making progress in Central America and plans to concentrate on Mexico and South America in 2007.
As the company's export sales grow, so does its staff. Lancaster Distributing recently hired an international sales and marketing coordinator and also has two sales representatives, one in Miami and one along the Mexican border.
"Exporting is of great interest to the ownership and senior management. It is proving to be the fastestgrowing segment of our business and a profitable one. International business can augment the company sales considerably in years to come," Shrum explained.
And the manufacturers that Lancaster Distributing represents also are realizing the benefits of international trade.
"The majority of manufacturers do not have a formal international effort," Shrum said. "As a result, we are opening markets for them that they otherwise would not have."
Shrum believes market research is just the beginning for a company interested in selling globally. Business relationships are important in the United States but even more so overseas. He credits Lancaster Distributing's success to actually getting on a plane and visiting target markets.
"We have clearly identified the type of customer we are after and have a pretty specific approach, because we know what our value proposition is and how to articulate the message," he explained. "it has taken a few years, but we have defined who our target customer is, what added value we bring to them, and, ultimately, how to complete an international transaction and get paid."
Shrum advises companies not to discount developing markets. Although these countries may appear primitive, there is often a segment of the market, no matter how narrow, that will support higher-quality products.
"When you get in this business, you sometimes follow the path of least resistance. Go where it's easiest to do business, " he said. "When you run out of those, you start looking at where should I be? Companies need to look twice before deciding that a country is not a viable market for them."

http://www.allbusiness.com/government/government-bodies-offices-us-federal-government/10560760-1.html

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