Going Global by Going Online

By MARLA DICKERSON

Feb. 11, 1998 12 AM PT

TIMES STAFF WRITER

A few years ago, Irvine-based Cardiac Science Inc. was like a lot of small firms itching to break into international markets. The manufacturer and distributor of cardiac medical devices had products it knew foreign customers would like. But where in the world to begin?

“Figuring out how to export is a daunting task for a lot of small businesses because they simply don’t know where to start,” said Raymond Cohen, president and chief executive of the publicly traded company. “We were no exception.”

Today, 85% of Cardiac Science’s revenue is international. Much of that business was developed through conventional channels, thanks to export assistance provided by the U.S. Department of Commerce. Still, Cohen says a growing contingent of overseas customers are finding the company’s defibrillators and heart monitors through his company’s Web site (https://www.cardiacscience.com).

“We’ve found it attracts international business people like bees to honey,” said Cohen, whose company posted a net loss of $807,000 through the first three quarters of 1997 on revenue of $789,000. “Last year, we shipped to 46 countries.”

Making money on the Internet is still the best-kept secret in cyberspace, where the “e” in e-commerce could just as well stand for “elusive” as “electronic.” Amid all the hype and overblown expectations, many small companies are finding the Net a cheap and efficient base from which to launch a viable export strategy.

Companies lacking international contacts or big travel budgets are using the Web to market to foreign prospects, slashing communications costs that would otherwise prove prohibitive.

“I couldn’t have done this business 10 years ago,” said Jeffrey Tober, who sells environmental cleanup products all over the globe from a small office in North Hollywood, corresponding almost exclusively by e-mail and fax. “The technology allows us to be bigger than we really are.”

Likewise, trade experts say the Internet has become the premier source for small-business owners to research foreign markets, troll for trade leads and educate themselves about exporting. While no one is pretending that a laptop and a Web site can turn the corner taco stand into a multinational conglomerate, the Net is proving to be the great equalizer when it comes to spotting opportunities abroad.

“Small companies now have instant access to information and customer leads that could have taken weeks or months to get before,” said Vance Baugham, director of trade development for the Los Angeles-Long Beach World Trade Center Assn. “It has leveled the playing field.”

U.S. small businesses last year rang up $3.5 billion in sales of goods and services over the Net, according to a new study by Access Media International (USA) Inc., a New York-based venture capital and consulting firm. Those revenues are projected to exceed $25 billion by the turn of the century, making e-commerce one of fastest growing new markets for the nation’s small firms.

“Small businesses [are] . . . harnessing the power of the Web in record numbers, extending their enterprises across geographic regions [and] time zones,” said Andy Bose, president and founder of Access Media.

Just how many of those 1997 sales came from abroad isn’t clear. But small-business owners say the global reach of the Net makes it inevitable that some foreign customers will come calling at their Web sites--presenting a natural opportunity to snag some export sales.

“It’s easy to do business with people who are already interested in your product,” said Cohen of Cardiac Science. “The key is following through.”

Cohen said his company tries to respond to e-mail inquiries within 24 hours, sending out product information to promising sales leads by express mail.

But he warns would-be exporters not to feel pressured to extend credit to these untested clients in a bid to win goodwill and build export sales.

“Get the money upfront before you ship product to someone you’ve never done business with,” Cohen said. “Because if they don’t pay, the logistics make it virtually impossible to collect. . . . An account in Brazil left us holding the bag for $75,000.”

Indeed, sorting out legitimate prospects from all the charlatans and surfers can be daunting, said John Olsson, president of Baby Tech International Inc., a Laguna Hills maker of infant thermometers that generates half its revenue overseas.

Last year, the firm launched a Web site (https://www.babytechint.com) that’s generating three to five foreign sales leads a week on average. The only problem is separating the gems from the clunkers.

“It’s so easy to send e-mail that we get a lot of off-the-wall inquiries,” said Olsson. “Sorting through all that junk takes time.”

Tober, founder of Strata International Inc. (https://www.strata-intl.com), has the opposite problem. Although the environmental products he sells are specialized and he has tailored search engine keywords accordingly, traffic to his Web site has been a trickle at best.

“Unless your site is related to sex, the hits are going to be slower . . . because there’s just so much stuff out there,” Tober said. “We haven’t generated a lot of sales off the site yet. The real value right now is that it gives us a professional image . . . particularly with foreign clients.”

Although the Internet has been touted as the ultimate global bazaar, in reality, it consists of millions of buyers and sellers running around cyberspace trying to find each other--often in vain. Thus, new Internet networks have sprung up to match potential trading partners more efficiently.

Santa Monica businessman Roosevelt Roby is president of the World Business Exchange Network (https://www.wbenet.com), a membership service in which subscribers can find international trade leads and links to other exporting sources.

The Washington, D.C.-based Universal Business Exchange, also known as Unibex (https://www.unibex.com), also offers trade leads, with the added capability of matching buyers and sellers automatically.

Such organizations charge fees to join their networks. But trade pros say entrepreneurs new to the exporting scene may first want to check out sites offering similar information for free.

One free local site is Los Angeles-based TradePort (https://www.tradeport.org), which provides export leads from the federal government, the state of California and myriad private trade networks with names like TradeNet, Partnerbase and TradeWinds. TradePort also offers links to organizations that provide financing, trade events and export assistance.

Some of the most popular government sites include the National Trade Data Bank, which provides international market research and other government statistics; the Economic Bulletin Board, which contains export leads from U.S. trade offices abroad; and Globus, which lists procurement opportunities for U.S. businesses worldwide. All are available at STAT-USA (https://www.stat-usa.gov) for a nominal fee.

“There is just a wealth of information out there that’s free or available for very low cost,” said Greg Mignano, a Sacramento-based international trade consultant.

“The Internet is probably the best tool available for doing market research and getting trade leads,” Mignano said.

Just ask Joe Steed. Using the Internet, the Compton resident found an Australian firm looking to purchase used American automobile engines. The novice exporter has already sent three shipments to the company. But he warns it isn’t easy.

“You have to put in a lot of hours and do a lot of thinking,” Steed said. “Finding the right deal is a lot of work.”

Indeed, though the Internet has made finding potential overseas buyers easier, small-business owners say crafting a solid export strategy takes a lot more commitment than putting up a snazzy Web site and waiting for the world to show up at your door. Cohen recently returned from visiting clients in Europe and has several more overseas trips planned this year.

“It’s all about building relationships,” said Cohen. “The Internet is great for introductions. But ultimately, you have to drink cappuccino in Milan and eat bratwurst in Munich. You can’t sit on your butt and just expect the business to come to you.”

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Trading Resources

Numerous resources are available for small and medium-size companies in Southern California that are seeking advice on the best markets for their exports, contacts in these markets and information on how they can begin the exporting process.

To receive market-specific trade information, be introduced to visiting delegations of overseas buyers and be listed in the California International Trade Register:

California Trade and Commerce Agency

Office of Export Development

1 World Trade Center, Suite 990

Long Beach, CA 90831-0990

(562) 590-5965 or (562) 590-5958 (fax)

For information on yearlong programs focused specifically on international trade and transportation:

California State University, Long Beach

World Trade Center Offices

1 World Trade Center, Suite 215

Long Beach, CA 90831

(562) 499-2160

Marianne Venieris is director of international trade and transportation.

To enroll in a six-session exporting workshop that focuses on such topics as how to price products in different markets and how to find overseas buyers:

Citrus College Center for International Trade Development

375 S. Main St., Suite 101

Pomona, CA 91766

(909) 629-2253

For seminars on exporting subjects and for consulting services:

Export Small Business Development Center

222 N. Sepulveda Blvd., Suite 1690

El Segundo, CA 90245

(310) 606-0166

For a $250 initiation fee, this group provides members with access to its membership directory, enabling them to network with other exporters:

Export Managers Assn. of California

222 N. Sepulveda Blvd., Suite 1690

El Segundo, CA 90245

(310) 606-0161

To access hundreds of industry reports and trade data on 120 countries, to search a trade-lead database for buyers and to find an international trade show calendar, go to the TradePort database, compiled through a partnership funded by the Commerce Department with the California Trade and Commerce Agency and LA Trade, among others:

TradePort

Web site: https://www.tradeport.org/

For legal advice and referrals on export-related matters, contact the Export Legal Assistance Network. The network does not file lawsuits:

Export Legal Assistance Network

901 Corporate Center Drive, Suite 524

Monterey Park, CA 91754

(213) 264-6882

Michael Doram is regional coordinator for Los Angeles.

For information concerning copyright policy and trademark and patent protection:

U.S. Patent and Trademark Office

Commerce Department

Washington, DC 20231

(800) 786-9199

Web site: https://www.uspto.gov

LA Trade, a federally funded program designed to help Los Angeles-area companies, provides counseling on export assistance from federal, state and local organizations. It also provides information on export market opportunities, financial assistance, marketing support, trade leads and export plan development:

LA Trade

Los Angeles Area Chamber of Commerce

350 S. Bixel St.

Los Angeles, CA 90017

(213) 580-7528 or (213) 580-7511 (fax)

E-mail: info-hq@hq.latrade.org

To register a copyright:

Library of Congress

101 Independence Ave. SE

Washington, DC 20559-6000

(202) 707-3000

(202) 707-9100 (to order applications)

Web site: https://lcweb.loc.gov/copyright/

USAID provides grants to small and medium-size businesses with products or services in agribusiness, information services, environmental services, health care and energy. It also provides companies in these areas with trade leads in its 65 member countries.

U.S. Agency for International Development

USAID, West Coast Outreach

Golden West College

15744 Golden West St.

Huntington Beach, CA 92647

(714) 895-8134 or (714) 895-8117 (fax)

E-mail: usaid.wco@orednet.org

Web sites: https://www.info.usaid.gov

https://www.usgtn.org (for trade leads)

Southern California export assistance centers operate as an arm of the Commerce Department and provide in-depth market research reports, assistance with compiling and executing exporting plans and a matchmaker service introducing exporters to distributors. For a fee, companies can be listed in the center’s trade publication and get information about a range of exporting topics, including trade missions:

Los Angeles Export Assistance Center

350 S. Figueroa St., Suite 172

Los Angeles, CA 90071

(213) 894-8784 or (213) 894-8789 (fax)

Jim Cunningham, manager

E-mail: jcunning@doc.gov

Westside Export Assistance Center

11150 W. Olympic Blvd., Suite 975

Los Angeles, CA 90064

(310) 235-7104 or (310) 235-7220 (fax)

Sherwin Chen, director

Inland Empire Export Assistance Center