How to Start Exporting Commercial Goods in New International Market?
13 July 2018
Want to export commercial goods into new international markets? Where to begin? To start exporting goods from one country to another, you will be required to know key trade documents, do market research for studying market components and prepare strategies for making things into your business control. Apart from import/export number, you might also be required to obtain permits or licenses for following government regulations to export products. Here is a guide on exporting commercial goods into new international markets and few tips on procedure to start export business.
Are You Ready to Export?
How to do export business? First and foremost question is to ask yourself that “are you ready to export?” It’s not simple enough as you have to select a right product and right country to selling into the international market. You have to be prepared for this new business venture. Apart from product and country selection, there are also certain things that need to be put in place such as financial capacity, production capacity and committed management team.
What About Your Export Planning?
Exporting in international business? Just like a domestic business, your export business will require proper and comprehensive strategies that will help you to identify steps to export a product into the international market. For great results, develop an effective import export business plan. Here are important points on which you must be well planned:
· Understand all key legal aspects of international trade
· Develop an appropriate financial plan
· Determine the methods of delivering your commodity or service to your target market
· Develop an export marketing plan
· Research and choose your target market
· Build an export plan
· Assess your business’s export readiness
Screening Potential Markets
How to start international trading business? Choosing the right market is important for getting higher business profits. From hundreds and hundreds of products, how to select the right one? Let’s go through the following points:
i. Obtain Import-Export Global Trade Statistics: By getting import-export statistics of various markets from a reliable market research agency like Export Genius, is the best way to know which industry and product has a potential business growth.
ii. Identify Potential Markets: From the global trade data, you will be able to which country holds the most potential. Remember to not just look at the largest markets; look also for the smaller & secondary markets that might have fewer competitors.
iii. Target the Most Promising Ones: Once you have studies the world’s market, choose few of them say, two to four that you feel hold the most promise and begin your further research.
5 Main Points to Look for while Assessing the Target Markets
How to sell your product in international market? This question is answered when you have assessed the target markets.
1. Examine Trends of a Product: Market research reports on products on free and paid basis are available with Export Genius that can help you in examining the trends of your product.
2. Study Competition Level: You need to know who your competitors are and what their market strategies are. This includes both domestic and foreign competitors. You can buy the trade data of companies and establish your competitors.
3. Market Analysis: Research any factors that may affect the use and marketing of your product. For example, does your product name have a different meaning in the local language of a country to which you want to export your product?
4. Identify Export Barriers: You also need to know that if there are any significant export or import barriers. The most common export barriers are export controls for certain products. For this, you can check the government websites of import and export and get necessary information about trading rules and regulations of customs.
5. Select a Market: Once you have conducted market research thoroughly, you should determine which market is most suitable.
How to Find Active Buyers for Your Product?
How to sell your product internationally? Finding active importers for your product is one of the major answers to this question. This is one of the most hectic and important aspect of exporting goods into the international market. There are some ways to find genuine buyers of your product.
i. Search Online: Go for reliable market research companies like Export Genius that have their “Search Live Data” page. And you can find genuine international import export companies and explore import export business opportunities.
ii. Attend Trade Shows: You can attend trade shows that often take place throughout the world. Many companies take part in these events.
iii. Contact Industry Associations: Almost every country has their export promotional councils or trade promotion councils of various products. For example, in India, there is Gem and Jewelry Export Promotion Council for gem & jewelry industry.
Taking Care of Logistics
Once your product is ready for export, you have to choose a reliable logistics company that can help you in moving your product out of the country and reaching your product to the target customer. Freight forwarders can arrange the shipment of goods from one country to another.
Export Documentation: Know All the Details
While moving your product or shipment from one country to another, you are requirement all necessary documents like Letter of Credit, Commercial Invoice, Export Packing List, Pro Forma Invoice, Airway Bill, Shipper’s Letter of Instruction, etc. If you find difficult in arranging all documents while taking your products from the customs, you can hire an agent that will do all your export documentation process on your behalf.
Determine Pricing of Your Product
There are various methods for you to determine the pricing of your product. The most common ones include:
i. Cost Based: In this method, cost is calculated with manufacturing cost and exportation cost. Some import cost in this method are – wholesaler mark-up, import duties, freight & insurance, export documentation, production cost, fees for market research, commissions or other costs, production adaptation cost, translation cost, travel expenses, retail mark-up and importer/distributor mark-up.
ii. Demand of Market: In this method, you have to do some research about the market to find out what consumers are willing or able to pay for your product. If you come up the fact that current selling price is too high for the new export market, there might be ways for you to modify your product to bring its cost down.
iii. Competitor Pricing: If there are a lot of competitors to the new market, you might be forced to match your competitor’s pricing to compete effectively.
Payment Terms and Methods of Payments
It is important for you to clarify with your buyer about the terms of sale that outline the costs, risks and obligations of the buyer and seller. This is one of the important export procedure in international business.
You must ensure that you get the payment in full and on time. How you manage this will depend on how trustworthy your buyer is. Here are some basic payment methods that are listed in order of least risky to most risky for the exporter:
i. Cash in Advance: Your Company receives payment for the products, usually by wire transfer or sometimes by cheque or even credit card, in advance of the shipment. This is called cash in advance. Once you receive the money, you arrange to ship the goods to the importer.
ii. Documentary Letters of Credit (LCs): A Letter of Credit is another payment method in international import-export business, which is usually a good compromise for both the importer (buyer) and exporter (seller). LCs work is taken up with the banks to receive and check shipping documents and guarantee payment.
iii. Open Account: If the buyer of your product is well established and trustworthy and has been thoroughly checked for credit worthiness, you might consider simply billing the importer who will pay you a later date.
So, for exporting goods into new international market, good trading knowledge, proper market research, purchase of import-export data and full & correct information on customs-clearance & payment methods is required. And starting an import-export business in any country is largely depending on good market research.
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