Finding an export niche market was Glenn Kim's goal when he launched a program to expand his five-year-old Fontana, CA, company, U.S. Resource Recycling Inc., into foreign markets. U.S. Resource Recycling purchases materials such as paper products, which are then recycled and sold as exports in South Korea, Japan, Taiwan and China—some of the company's primary markets.
The niche identified by U.S. Resource Recycling President Glenn Kim was the difference in domestic and foreign prices for products sold by his company. For example, Glenn found that the primary users of waste paper in foreign markets were willing to pay a premium for the product compared with customers in U.S. markets.
Kim enhanced this strategy by selling directly to the major users of specific products in the overseas markets. He found that often subsidiary buyers and distributors pass added costs on to the end-user. Kim now markets directly to the buyer, so that the buyer avoids pass-along costs incurred by several steps of middlemen, and Kim can sell the product at a fair price to earn income for his business.
A domino effect took place, and the higher fees Kim collected allowed him to pay higher prices for raw materials purchased in the U.S. and build a sufficient inventory to appeal to the overseas buyer seeking to purchase in greater volume. As part of his marketing efforts, Kim purchases a higher-quality waste paper and employs a sorting process to offer "best quality" paper. In addition, a quality-control sticker is placed on shipments to assure customers that quality product has been received. Kim also invites representatives from customer firms to visit his plant when they are in the U.S. to tour the facility and see the quality of operations. |
