Getting off-shore can help you maintain a competitive edge and gets your product in front of new, larger audiences. Find out how to succeed and how to avoid the pitfalls
Exporting goods and services overseas can certainly be a lucrative venture. For example, in 2007, in the United States alone, exports of goods and services earned the country a total of $1, 649 billion.
Despite the great returns that can be achieved by exporting, breaking into foreign markets can be a daunting prospect for novice exporters, who may be confused and unsure of where to start. Many business owners also make a whole host of avoidable mistakes through lack of research and preparation. Previous mistakes made by new exporters have included being taken advantage of by unscrupulous buyers and agents and having budgets smashed because they were not fully aware of all the different costs involved with exporting. Some exporters have even seriously insulted the residents of the country they chose to export to due to inappropriate packaging and marketing!
Thankfully, if you bear a few simple points in mind when starting out in export, many of these slip-ups can be avoided.
Do Your Homework:
It is imperative that you do as much homework as possible and make use of all the assistance available. The US Government Export Portal in the United States and the Institute of Export in the United Kingdom are great places to go for help and advice. Most other countries will also have an organisation that exists purely to promote export and to point would-be exporters in the right direction.
In addition to contacting the professional bodies, it can also be useful to get in touch with other exporters. Most people in export are happy to share market information, providing they are not competing with you in that area. It can also be a huge help to have a consulting mentor looking over your plans.
Picking the Right Agent for You:
Many business owners don’t take the time to understand the distribution channels that they have to go through. Assessing, understanding and selecting the right agent and distribution channel are critical to the success of any export plan.
Make sure, when selecting an agent, that you have a very, very clear understanding of the pricing structure and all the margins. Don’t be fobbed off. Find out who is taking the exchange risks and how good the margins are compared to other ranges of products the agent is distributing.
Understand Your Market:
It is vitally important that you visit the country that you intend to export to and don’t assume that one market technique and product will automatically be successful in all countries. What works in one country may fall flat on its face somewhere else. Each market must be treated individually if you want to make a success out of exporting.
Be prepared to alter a product or service if they don't meet your export country's regulations or fit in with the culture. Even your brand name may have to be altered for export if it is difficult for the population to pronounce or if it means something entirely different in their language!
Another thing to bear in mind is that it will be necessary for you to print your product instructions, warranty details and other sales information in the language of the country that you will be exporting to. This may seem obvious but it is a point that many novice exporters overlook when calculating export costs.
Main Export Pitfalls:
The biggest mistake that fledgling exporters make is that they don’t take enough time to understand the market. This comes down to not having accumulated enough time, resources and finances.
Other mistakes include rushing overseas visits and not taking the time to fully understand the nuances and details of the new market. Some novice exporters may have to learn the hard way. For example, they may jump into agreements with agencies and then realise two years down the track that they are not where they wanted to be. They then have to scramble and often have to start all over again, from scratch.
It Will Be Worth it in the End!
Exporting for the first time can mean a sharp learning curve for many business owners. Lots of business people avoid breaking into the export market altogether, regarding it as 'too risky'. Others are content to build their company up to a certain level and leaving it at that. You do have to be truly passionate to take your business to that next level but the rewards are certainly out there for the taking. Profits and opportunities for growth are available in overseas markets as long as you do your research and arm yourself with as much knowledge as possible.
