5 Challenges to Expanding into Latin America with Demo Perez
Demo Perez and Joe Lynch discuss 5 Challenges to Expanding into Latin America (LATAM). The LATAM region is huge and growing fast so many North American, European, and Asian companies are anxious to enter the market. LATAM is a golden opportunity, however, there many problems unique to the region. Demo has been helping global companies expand into Latin America for over two decades and he shares some of his valuable insights.
About Demo Perez
Demo Perez is the Co-Founder and Chief Commercial Officer of the IPL Group, based in Panama. Demo and the IPL team specialize in Latin American warehousing and distribution. Demo has proven expertise in warehousing, distribution, logistics, value-added services, logistics technology, government affairs, and international trade. Prior to founding IPL Group, Demo held leadership positions at Logistics Services Panama. Demo is the President of CSCMP, Panama Roundtable, and the Vice-Chair of the Customs and Trade Facilitation Committee (Chamber of Commerce). Demo has worked with a number of Panamian government and trade groups and advised Georgia Tech on logistics innovation. Demo earned a Bachelor of Business Administration from the University of Panama.
About IPL Group
IPL Group helps global firms expand their business into the Latin American market. IPL Group is based in Panama, which is the go-to country for companies that want to expand into the huge, fast-growing Latin American market. IPL Group specializes in Latin American warehousing and distribution. IPL offers a wide array of value-added services that help customers comply with the rules and regulations of the different countries in the LATAM region as well as special needs from distributors, retailers, and individual customers. IPL Group is also a full-service freight brokerage and freight forwarder.
Key Takeaways – 5 Challenges to Expanding into Latin America
- LATAM region is comprised of over 30 countries and each has its own unique culture, customs, dialects, federal regulations, currency, tariffs, and consumer tastes. When expanding into the region, companies must recognize the difficulty and complexity of entering into each individual country.
- Many business people used to large homogeneous markets like the USA will need to change their attitudes to be successful in LATAM.
- Managing inventory is a major concern for companies expanding into LATAM. Developing accurate sales forecasts is often a problem for companies new to the region. If a product doesn’t sell, moving excess inventory is challenging. Companies are better off, keeping their inventory at a regional distribution center rather than committing to local inventory. The regional DC should be in Panama because of the strategic location. Panama also has the logistics expertise, infrastructure, and experience required to manage a LATAM regional distribution center.
- To minimize investment when entering LATAM, companies often find distributors who work in the region. Distributors can offer some advantages, however, they are separate entities that can’t be easily controlled. Distributors may work with your competition and they may not fully commit to selling your product. The costs added by distributors may make your product unattractive to the LATAM markets. In many cases, companies new to the market will be better served by a regional 3rd party logistics provider (3PL).
- To successfully expand into the LATAM region, companies must partner with the right 3PL. Hiring a 3PL that can manage warehousing, value-added services, logistics, and distribution will enable your team to focus on growing the revenues in the region.
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