Exporting advice for scale-ups: Reggie Johal of Predator Nutrition

Predator Nutrition's exports account for 40 per cent of its revenues. Here, founder Reggie Johal discusses the company's international trade growth.

Reggie Johal started Predator Nutrition in 2009 with the aim of introducing fitness enthusiasts to nutritional products that really work.

Having grown the company’s export sales to constitute 40 per cent of total revenues, he reveals his tips on maximising international sales.

What is the business, when was it started and what were you doing beforehand?

Predator Nutrition is a prominent UK sports nutrition company. Previously, I was working at Deloitte but I wasn’t really happy working for somebody else; it didn’t fit my personality. Sports nutrition was an area I knew very well, having played top-level American football in the UK, so I was able to spot an opportunity to provide something different. In 2009 I set up the business.

When I started out, the industry was dominated by five or six UK-based retailers which were all focusing on British brands, meaning there wasn’t really much variation between their product ranges. As a consumer, I used to have to import products from the US all the time.

It was fairly simple for me to determine that there was a gap in the market and what I’d need to do to offer a range that wasn’t available elsewhere. We distinguish ourselves from competitors like Amazon who simply take orders and have never, ever innovated in products in our sector. We ally this to a more personal service, showing our customers that we genuinely care about helping them reach their goals. We’re not just a business, we’re a partner in helping our customers achieve their potential.

How did you finance it and what were the challenges of that?

I started out with just £6,000 of personal savings which was not a great deal of money compared to the requirements we would have in holding so many brands. With the industry one where credit terms are not generally available I was faced with a situation that forced me to focus on unique, hard to source products where there was latent demand that was being unmet by the existing retailers in the United Kingdom.

Fortunately, this was a simple task as I had been a keen user of supplements to support my own athletic efforts and had long since been used to ordering products in from the USA which especially back then were years ahead of their time. Knowing from the big presence of UK users on bodybuilding forums that I was not the only one, it was a simple decision to initially focus on a core range of products where there was no real competition and in which I would become the de facto exclusive distributor. Naturally, they sold very quickly and it soon meant that my problem was not cash flow but the lack of space needed to service very rapid first-year growth.

What export opportunities did you identify?

The potential to export overseas was quite clear from the get-go. I think our business has an advantage in that the overwhelming majority of products we sell are exclusive to Predator Nutrition; international shoppers are happy to come to us to find the right product.

While the UK market is currently quite volatile, in the last year we have already seen revenue growth of over 100 per cent in the US, Sweden and Italy, among others.

What are the main challenges you have experienced and see in the export market?

One of the major obstacles was a substantial number of transaction declines, particularly in the US, which all came with vague ‘do not honour’ messages from our initial payments provider. We could see that customers were trying four, five, six times! They wanted to shop with us, but were being turning them away for reasons we just couldn’t understand.

The issue came down to the cardholder’s bank deeming a purchase overseas suspicious, so they’d prevent the payment. It’s a common problem for e-commerce businesses, particularly in the US, where you need a more localised approach to navigate the banks’ caution towards foreign transactions.

If, as a customer, I went to a small business retailer and I couldn’t complete the transaction on the first attempt, I would probably go to Amazon or somewhere familiar. We didn’t want our customers to do that.

Talk us through the growth in export sales.

We sell online in the US, Sweden, Spain, Italy, Denmark, Norway, Australia, France and Germany. Currently, 40 per cent of our revenue comes from outside the UK.

While Amazon and eBay are still huge obstacles, the technology is now there for SMEs to be successful online and internationally, in a way that it wasn’t 5-10 years ago.

“It’s quite exciting to look across the globe and know we now have the potential to accept payments in almost any country”

Competing on a more level playing field from a technology standpoint means we can build on our own unique brand proposition and exclusive range of products.

We identified the checkout as the moment of truth. We knew we could bring customers to our site, we knew our products were attractive, but would customers feel comfortable entering their payment details into a ‘foreign’ website and trust it to be processed safely?

Localisation was the answer. We need to offer each customer in each market a familiar, secure checkout in their own language and currency, with a selection of local payment options. Our existing payments provider simply wasn’t cut out for the job so 12 months ago we chose to work with Ingenico and I have to say the difference has been remarkable. We’ve seen conversions rise by 20 per cent while falsely declined transactions have shrunk dramatically.

It’s quite exciting to look across the globe and know we now have the potential to accept payments in almost any country.

What advice would you give to an SME looking to export?

Coming from a fairly international background myself, I knew that my market should not just be the United Kingdom but the whole of the European Union and later the whole world. Being a retailer initially, the challenges with exporting were non-existent due to the EU single market meaning there was no customs involved; in reality the only difference was a different address on the box.

With later growth involving increasing amounts of business to business sales, then it necessitated understanding regulatory requirements and working with both customers and suppliers to ensure that products were configured so that customers could sell them without issues – one such example being to work with a California based brand to ensure labelling was EU compliant by adding support for additional languages.

With Brexit on the horizon, and the uncertainty it could cause, my advice for anyone, in any type of business is to focus first and foremost on delivering unique products, ideally the kind where you cannot simply buy them from Amazon.

By focusing on unique products, and allying them to an educational piece to showcase to potential customers why they should consider them, it will provide early stage businesses the necessary marketing position so that when it comes to exporting, you have something distinctive which will encourage potential importers in other countries to work with you on handling logistics and regulatory barriers that may arise.

Ben Lobel

Ben Lobel

Ben Lobel was the editor of SmallBusiness.co.uk and GrowthBusiness.co.uk from 2010 to 2018. He specialises in writing for start-up and scale-up companies in the areas of finance, marketing and HR.