Service Specialists Know Tricks of Trade : Brokers: Big O.C. firms have their own export units, but smaller ones rent expertise instead.
Armor All Products Inc. regularly ships hundreds of tons of its automotive cleaners, polishes and degreasers to countries in Europe and Asia and maintains a network of outside distributors as well as a 15-person international sales staff to market its goods overseas.
But Orange County has few businesses the size of Armor All--companies that can afford their own export units.
Most area businesses that ship goods internationally are like Fountain Valley’s Zadro Products, maker of a line of vanity mirrors including one that won’t fog up in a hot shower and another that allows the user to increase magnification and zoom in on his or her face by twisting an outer rim.
Zadro is a 9-year-old company with 20 employees that had $2 million in sales last year. Though exports are increasingly important to the company, founder Zlatko Zadro said it is not yet cost-effective to add a full-time export marketing specialist.
The company does do some of its own foreign sales, which now represent about 10% of annual revenue, but Zadro also uses outside distributors and full-service global marketing companies like Export Specialists Inc. in Irvine.
“We use a marketing service instead of doing it ourselves because they have the contacts and they understand the marketplace,” said Zadro.
Robert Wallace, managing director of Export Specialists, smiles when he hears such things, because word of mouth has helped his company grow from two employees in 1987 to seven employees, about two dozen regular clients, and about $4 million in brokered sales last year.
Though the company is in Orange County and has a number of clients here, it draws accounts from across the nation: along with Zadro’s mirrors, which do quite well in Japan, the company sells a Wisconsin manufacturer’s window washer in Europe and a Missouri company’s electromagnetic pest control device in both Japan and Europe.
“Another big seller for us in Japan is a line of ladies’ figure-control cotton lingerie,” Wallace said. “I never thought when I started this company that I’d be selling ladies’ underwear,” he added with a chuckle, “but you sell what the market wants.”
Wallace’s business typifies the dozens of export and import service companies in Orange County: Export Specialists doesn’t make products, it markets other companies’ goods and arranges shipping, warehousing and the complex financial transactions necessitated by international selling.
“It’s a very dynamic business, and it’s growing,” he said. “Most small companies are very aware of the benefits of exporting their goods, but they don’t know how to go about it and can’t afford to hire a permanent foreign sales and shipping staff.”
The potential of exporting is so great that last year Western Digital Corp., the Irvine computer hardware manufacturer, decided to look into the possibilities of contracting out its in-house export marketing expertise.
The company hired export administration specialist Marilyn Loewy to study the market and even began advertising in export trade journals that it would make her available to other businesses for a fee.
“People were very, very interested in the program and it had the potential to be a viable business if they’d gone ahead with it,” she said. But Western Digital recently re-examined its corporate purpose and decided to abandon several sidelines--including export consulting--to stick to its main business of building computer data storage devices.
Now Loewy is a private consultant in Lake Forrest doing on her own what she had hoped to do for the computer components company: helping local companies find overseas buyers for their products and then assisting in getting the products transported.
“Orange County is really fertile ground for export service companies,” Wallace said. “There are just a whole bunch of small companies growing up in the area--a nice, impressive and clean environment for hosting foreign business people. They like it here and that makes them want to do business with companies here. And we’re close to the ports and freight forwarders in Los Angeles, so that makes exporting fairly easy.”
One of the services Export Specialists and companies like it provide for its smaller customers is cargo consolidation. They bundle products from several U.S. companies into a single shipment to a distributor or wholesaler in Asia or Europe. That reduces the individual companies’ shipping costs and increases their profits.
It also makes it easier for the buyer to take delivery of the goods because instead of being stacked on loose pallets that have to be loaded onto a truck, they already are in a truck-sized steel container--a 20- or 40-foot-long metal box that is locked onto a truck chassis for local hauling, loaded onto trains for long-distance ground transport and lifted off the truck or train and onto a ship by crane for ocean shipping, all without disturbing the cargo inside.
These freight forwarders or brokers also arrange to transport the U.S. company’s goods to the appropriate seaport or airport and to coordinate its handling on and off the ship or cargo plane. Even large companies like Armor All and Western Digital find it easier to use forwarders to handle those highly specialized chores for them.
More important, export service companies fill out the critical paperwork upon which hangs the fate of every export sale--the smallest discrepancy in a packing list, bill of lading, invoice or letter of credit can invalidate a sale and stick the manufacturer with the cost of bringing its goods back from overseas or selling them at a distress auction in a foreign port. The companies also can assist in arranging financing.
Destinations and Origins
The top 25 markets for county exports through the ports of Los Angeles and Long Beach received more than 325,000 metric tons of goods. And just the top five, all on the Pacific Rim, accounted for almost 90% of that total. With imports, the top five originating countries shipped two-thirds of total for the top 25. Largest export destinations and import originations in 1993:
EXPORTS Taiwan: 129,962 South Korea: 85,759 Japan: 34,033 Hong Kong: 24,949 Indonesia: 11,750
IMPORTS Japan: 139,092 Taiwan: 56,754 South Korea: 48,859 Italy: 33,666 Thailand: 29,387
City Traffic
All of Orange County’s 31 cities as well as some of the unincorporated areas are home to export-import businesses. Just eight cities exported more tonnage than they imported; the remaining 23 imported more. Metric tons shipped:
EXPORTS Los Alamitos: 90,363 La Palma: 69,465 Irvine: 65,051 Anaheim: 35,191 Laguna Niguel: 29,805 Garden Grove: 13,540 Newport Beach *: 11,084 Huntington Beach: 10,649 Fullerton: 9,547 Santa Ana: 8,095 Orange: 5,349 Fountain Valley: 4,886 Buena Park: 4,179 Costa Mesa: 3,459 Cypress: 2,995 Brea: 2,016 San Clemente: 1,449 Yorba Linda: 1,482 Stanton: 1,390 Placentia: 1,249 Tustin: 1,035 Westminster: 754 Aliso Viejo: 610 La Habra: 587 Laguna Beach **: 467 Midway City: 420 Mission Viejo: 355 Laguna Hills: 308 Trabuco Canyon: 217 Lake Forest / El Toro: 197 San Juan Capistrano: 90 Seal Beach: 46 Villa Park: 40 Capistrano Beach: 22 Dana Point: 7
IMPORTS Fullerton: 80,074 Anaheim: 70,333 Irvine: 62,880 Cypress: 37,881 Buena Park: 37,274 Santa Ana: 30,837 Fountain Valley: 26,932 Brea: 22,697 Huntington Beach: 22,135 Placentia: 20,284 Orange: 16,668 Garden Grove: 12,154 Costa Mesa: 12,013 Westminster: 9,930 Tustin: 8,205 Laguna Hills: 6,425 La Palma: 5,398 Los Alamitos: 5,197 Newport Beach *: 4,312 Mission Viejo: 3,330 Yorba Linda: 3,326 Lake Forest / El Toro 3,153 San Clemente: 2,224 Stanton: 1,200 Laguna Niguel: 1,084 Midway City: 889 La Habra: 620 Laguna Beach **: 573 San Juan Capistrano: 127 Aliso Viejo: 117 Seal Beach: 77 Dana Point: 20 Villa Park: 11
* Includes Corona del Mar
** Includes South Laguna
Sources: Ports of Los Angeles and Long Beach; Researched by JOHN O’DELL / Los Angeles Times
